The role of voluntary insurance in an evolving health care landscape

By Tye Elliott


With the ongoing conversation about the shift in the health care landscape, insurance benefits are top-of-mind for employees and expectations are changing. For today’s workforce, a well-rounded, comprehensive benefits plan is no longer an “extra” — it’s an expectation. This may not bode well for employers looking to eliminate benefits or offer low-premium, high-deductible plans. In fact, recent data shows that 6 in 10 of today’s employees would be willing to take a job with lower pay, but better benefits.1 Now more than ever, the role of the broker is critical. Brokers need to educate employers on the importance of ensuring benefits offerings meet the needs of a workforce, while businesses need to understand how better benefits can result in more satisfied, productive employees, and ultimately affect the bottom line.

How does voluntary insurance play in this evolving landscape?

As brokers know, a robust benefits offering doesn’t stop at major medical, life and dental insurance. As health care costs continue to rise, the employee is put in a position to examine his or her benefits package to ensure there are safety nets in place to protect income and assets. For instance, employees saw their average spending for deductibles, copayments and coinsurance jump from $1,984 to $2,239; this 12.8 percent increase is more than double last year's 6.2 percent hike.2 Plus, 42 percent of workers are not very or not at all prepared to pay for out-of-pocket expenses associated with a medical illness or accident.3

This is where voluntary insurance comes in. When advising clients, brokers should emphasize what makes voluntary insurance policies stand out. Not only are most policies available at no additional cost to employers, they can help provide the employee with the range of coverage they need and want. Brokers can suggest critical illness, short-term disability, accident, dental or life policies to help prepare workers for the unexpected. Another added benefit of voluntary insurance is it pays policyholders directly for unexpected costs associated with a covered serious illness, injury or loss.

Ensuring that clients understand the advantage of offering voluntary policies by talking to them about the bigger picture is a start. More specifically, brokers can use real-world examples to emphasize the importance of critical illness, accident and cancer insurance plans for employees with families. For example, accident insurance is a must for families with children who play sports, or for those who are accident-prone.

More is more

To make sure employees are using the benefits they need, employers should choose voluntary offerings based on what best suits current and potential employees. Since voluntary insurance isn’t one-size-fits-all, they can tailor employee benefits to their unique situation, meaning workers have the chance to decide on the best choice. For example, workers in their 20s may not consider critical illness policies at this point in life. However, it might make sense for their 40-year-old colleagues. Similarly, single, recent college graduates without children may not consider life insurance plans because their parents may have one on their behalf already, but accident insurance may make sense for the young and active generation. Of course, when the time comes, brokers must manage expectations by advising clients that they may see higher participation in some plans versus others based on their workforce demographics.

Not only do employers need to offer a robust benefits plan, but they need to communicate, too. Communicating to employees that they have a range of benefits options available to them can be important for recruitment and retention. According to the 2014 Aflac Workforces Report (AWR), 85 percent of workers say their benefits package is at least somewhat influential on their overall job satisfaction.3 Providing a wide range of options to choose from can lead to more satisfied workers and it doesn’t cost employers a dime.
Everyone wins

Shifting health care costs doesn’t mean that employers have to be at a disadvantage for the sake of employees, or the other way around. In other words, voluntary policies can benefit both employers and employees.

Employees who are enrolled in voluntary insurance plans may feel more empowered at work, report increased job satisfaction and believe they’re more financially prepared to cope with unexpected medical expenses. Consider that 63 percent of employees say a benefits package is important to their work productivity. Plus, workers with voluntary benefits are more likely to be extremely or very satisfied with their benefits than workers without them.3 Smart companies understand that employee job satisfaction and engagement are important to their business sustainability.

Most importantly, cash is king. Brokers should explain the cash benefits of voluntary insurance for workers, who can use the money to pay for unexpected out-of-pocket costs resulting from sudden accidents or illnesses. Payouts from voluntary insurance can be used for rent, gas, groceries, child care or other out-of-pocket expenses a worker may have. According to the AWR, 68 percent of workers at least somewhat agree that they regularly underestimate the total cost of an injury or illness, including medical, household and out-of-pocket expenses.3 Employers offering voluntary benefits can help ease the stress of workers facing financial burdens from accidents, injuries or loss.

The bottom line: Help them understand the importance of more options

As health care changes continue to take effect, it’s more important than ever for employers to understand why it makes sense to add voluntary policies to their benefits roster. Voluntary insurance should round out major medical and be tailored to individual workforces so that employees can choose plans that are necessary and effective.

1 Aflac, “2014 Aflac WorkForces Report,” conducted by Research Now, January 2014
2 Bankrate.com, “Workers pay higher health costs,” March 28, 2014
3 Aflac, “2014 Aflac WorkForces Report,” conducted by Research Now, January 2014