Did you know that 74 percent of middle-income employees derive the majority of their financial security from the benefits they receive at the workplace? That’s one of the findings of my company’s 2014 Workplace Benefits Study. It’s also the reason most Americans turn to their workplace for financial security.
But the benefits landscape is shifting, due to the rising costs of providing employee benefits, changes in the health care plans due to the Patient Protection and Affordable Care Act (PPACA), and increases in employee deductibles and out-of-pocket responsibilities.
Employees will need more help understanding their benefit options, so that their choices reflect the right level of financial health and security for them and their loved ones. It starts with the rethinking of responsibilities. And not just for employees, but for employers and brokers as well.
Employers need to deliver an effective communications strategy that speaks to the value of the benefits being offered, especially since employees may have to contribute more of their own funds to achieve the right level of protection. Introducing supplemental health coverages, such as accident, cancer, and critical illness, will enhance existing benefits package at little or no cost to the employer, but will require a thorough understanding of how these products work to help meet coverage gaps.
Brokers also need to rethink their responsibilities when it comes to helping clients implement a successful benefits communication and education plan, especially in the world of health care reform. In addition, by adding voluntary benefits to their portfolios, brokers can help clients remain competitive for attracting talent, and increase their own revenue stream. And by providing benefits communication services to clients, brokers will help employees better understand and value their benefits — and their employer’s investment in them.
What follows are three major factors driving the need for voluntary benefits, which can improve the approach to voluntary benefits sales opportunities in the coming year.
1. The impact of health care reform
Fifty-two percent of human resources and benefits decision-makers at midsized and large companies see the U.S. health care landscape profoundly changing due to health care reform, according to an ADP Research Institute report. They are anticipating costs to escalate and are examining options to offset the potential impact of complying with the new laws, such as:
Reducing work hours to cut the number of employees eligible for workplace benefits.
Paying higher premiums to maintain existing coverage.
Moving employees to a high-deductible plan to maintain affordable premiums.
Eliminating retiree coverage.
Narrowing the health care provider network.
If any of these options are put into effect, offering more robust voluntary benefits may be a way for the employer to help fill gaps in coverage.