Voluntary Products

Voluntary Benefits Help Close Coverage Gaps

To control the rising costs of health care, more and more employers are choosing less expensive primary care plans with higher deductibles and copayments, then offering more voluntary health benefits to employees to offset these coverage gaps. In fact, sales of voluntary benefits – which are chosen by employees and paid for through payroll deduction – are 60% higher than they were a decade ago.1

But it's not just about cost. Offering a broad menu of voluntary benefits can be a wise strategy to retain and recruit employees. A 2014 LIMRA report found that 71% of employers feel that voluntary benefits boost workplace morale and satisfaction.2

Patient Protection and Affordable Care Act (PPACA)

The 2014 LIMRA study also found that 60% of employers felt that the Patient Protection and Affordable Care Act had little or no impact on how they think about voluntary benefits. PPACA didn’t push employers to purchase insurance through exchanges, either. The LIMRA study found that only 10% of employers offer insurance benefits through an exchange, and aren't likely to do so in 2015.2

Starting in 2018, however, companies that offer generous health insurance coverage will be charged a "Cadillac tax." The 40% excise tax is supposed to discourage high-cost plans, which are believed to increase overall health care costs because they might encourage people to get expensive and/or unnecessary tests and procedures. To avoid the tax, it is expected that even more employers will offer voluntary benefits once this part of the law goes into effect.1

Most popular voluntary benefits

According to BenefitsPro, the top-selling voluntary benefits in 2013 were:

  • Hospital indemnity/supplemental medical (8% of sales)
  • Cancer (5% of sales)
  • Critical illness (5% of sales)
  • Vision (5% of sales)3

Other benefits gaining popularity include legal plans and pet insurance.

Additional company perks

There also are a number of perks that organizations are offering employees. A Benefits USA 2012/2013 survey conducted by Compdata Surveys found that some organizations are offering:

  • Cafeteria discounts
  • Car rental and hotel discounts
  • Dry cleaning
  • Free lunches
  • Emergency day care

  • Employee assistance programs
  • Laundry
  • Movie ticket discounts
  • Parking perks
  • Uniforms4

Watch for these perks and voluntary employee benefits products to increase in availability and popularity.

Share Article