Voluntary benefits are the ‘choose your own adventure’ of the insurance world.
For readers who remember and enjoyed those novels, they felt empowered by their inclusion in how the story played out. The same principle applies when selecting personal benefits. Voluntary benefits allow an individual employee to secure additional coverage or preferred pricing outside of any perceived constraints of a traditional group benefits plan.
Where an organization has a number of employees who fall outside of the typical plan member (i.e., numerous health conditions, unique financial situation, part-time employees or ineligibility for any reason), offering supplemental benefits will level the field of options. Voluntary benefits are beneficial for employers as well — think back to the ‘choose your own adventure’ books, where the audience completed the stories and did a lot of the work, which was likely much less cumbersome than the role of a traditional novelist.
As well, little administration is required to offer voluntary benefits — it’s just a program launch that includes information on accessibility followed by annual reminders and, if resources allow, additional communication as desired.
Of course, communication will drive participation in the program — as with any benefits offering — but voluntary programs require no more (and sometimes significantly less) communication to members than a group plan or any other shared offering.
In addition, all transactions occur between the participant and the provider, which also contributes to the lack of employer administration; for the same reason, there’s no cost to offering these benefits. A voluntary benefits package can be managed by a human resources professional, administrator or the expertise of a consultant and can require as much or as little effort as appropriate for an organization.
When the economy is struggling or an employer is looking to tighten their finances, the expectation is to eliminate or reduce workplace perks, but there’s no shared cost to offering voluntary benefits, so there’s no burden in its implementation.
Voluntary benefits differ from traditional employee benefits in other ways as well. In the insurance industry, anti-selection is typically avoided as much as possible, but it’s exactly the desired outcome of implementing voluntary benefits — those that need the coverage, product or service get it.
One solution for anti-selection in a benefits program is mandatory participation, but when the premise is voluntary and it’s expected that participants will be using the benefits, anti-selection becomes less of a primary concern. Meanwhile, those that either don’t need or want any additional coverage or another unique offering can simply be aware of the options available to them and their family should the need arise.
From the plan member’s perspective, having access to supplementary benefits on a voluntary basis can be as simple as the difference between being able to afford taking an annual vacation or not; or having the additional coverage to create peace of mind and reduce financial stress that may be impacting their health and productivity. The entire suite of benefits within their offering may not become applicable right away — or at all — but it’s quite likely that, when the need for one of the benefits does arise, the employee will be grateful to have them.
Voluntary benefits can certainly help distinguish an employer from competitors in the same way as an attractive salary or vacation package. It’s important to round out a compensation package and these ‘choose your own adventure’ offerings accomplish just that.