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.

HealthCare.gov

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.

See also: An open enrollment checklist for employers

Selecting job hunters from a menu

2. Voluntary benefits will continue to play a role in attracting and retaining talent

Now that PPACA has put medical benefits within reach of all Americans, employers will need to differentiate their offerings to retain and attract talent. Offering voluntary benefits can improve prospective employees’ perception of their overall benefits package.

Since more employees are turning to their workplace as the source of their financial security, they will be looking for solutions that touch upon all aspects of their lives.According to Towers Watson & Co.’s “2013 Voluntary Benefits and Services Survey,” the percentage of employers that expect voluntary benefits to be very important to their rewards strategy will more than double over the next five years, jumping from 21 percent in 2013 to 48 percent in 2018.

See also: Over 8 in 10 small biz employees want voluntary benefits

Money river

3. Additional revenue for producers

Since the introduction PPACA, brokers have had growing concerns about possible commission reductions and eliminations due to the new laws, including the potential for lost revenue due to the exchanges as an alternative channel for coverage.

Producers and other industry players now believe that voluntary benefits sales will help fill the revenue gap, since these options allow employers to offer a cost-effective, expanded benefits package at little to no direct cost. Nearly 90 percent of producers expect sales of voluntary benefit plans to increase, and a full 70 percent of producers say their expectations have been shaped by PPACA, according to a 2013 Eastbridge Consulting Group survey.

Most importantly, satisfied and engaged employees are likely to be more productive and have stronger ties to their employer and workplace. A well-executed voluntary benefits offering can help achieve this, which can ultimately increase profitability and the overall bottom line for both brokers and employers.

See also: Voluntary benefits increasingly popular