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VOLUNTARY BENEFITS ROLE IN BENEFITS STRATEGY

Voluntary benefits offerings – those for which employees pay 100 percent of the cost – allow employers to balance cost management with the unique needs of their diverse employee populations. Common voluntary benefits offerings include dental, vision, life, disability, supplemental health, critical illness and cancer insurance, and are usually promoted by an insurer directly to employees with minimal employer involvement (other than to collect and remit premiums through post-tax salary reductions).

Employers view voluntary benefits as a flexible and customized way to expand benefits offerings at minimal cost, not as an alternative or compensation for a reduction in core benefits or to replace benefits that were previously offered as employer-paid.28

EMPLOYER'S VIEW ON VOLUNTARY BENEFITS ROLE IN BENEFITS STRATEGY

Employers who agree that voluntary benefits are a significant part of their company’s benefits strategy

  All companies Under 50 employees Under 500 employees 500+ employees 5,000+ employees 10,000+ employees
2010 32% 23% 26% 43% 47% 52%
2011 41% 27% 31% 57% 57% 58%

Employers are beginning to recognize employee interest in voluntary benefits offerings, and voluntary benefits are growing in strategic importance across all sizes of companies.29 Employers cite many reasons for making voluntary benefits available to their employees, including:

  • Expanding the types of benefits offered without increasing benefits costs
  • Giving more choices to meet the diverse needs of the employee population
  • Helping fill gaps in coverage under other benefits offerings
  • Helping employees achieve greater financial security through protection against illness, disability or death30

As with other benefits offerings, the success of an employer’s voluntary benefits offerings rests on effective communication. Many companies are falling short with their voluntary benefits communications. One study shows that while 68 percent of employers indicated that they had an effective benefits communication strategy in place, only half of those measured employee satisfaction with that benefits communication.31 Clearly, employers need to focus on improving the quality and timeliness of employee benefits communications and education, particularly with respect to voluntary benefits.




28 “Who Will Build Your Future? The New Employee Relationship,” Harvard Business Review, Page 9, Figure 5 (2012).

29 “10th Annual Study of Employee Benefits Trends: Seeing Opportunity in Shifting Tides,” MetLife, Page 29, Figure 2.10 (2012).

30 Ibid, Page 29, Figure 2.11.

31 “Who Will Build Your Future? The New Employee Relationship,” Harvard Business Review, Page 10 (2012).

This material was created by National Financial Partners Corp., (NFP), its subsidiaries, or affiliates for distribution by their registered representatives, investment advisor representatives and/or agents. This material was created to provide accurate and reliable information on the subjects covered. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation. Neither NFP nor its affiliates offer legal or tax services.