Guest Post – Allstate Benefits: How to Leverage the Power of Voluntary Insurance

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Guest Post Contributor: Allstate Benefits, a national insurance carrier and PlanSource Boost partner 

How to Leverage the Power of Voluntary Insurance 

by Scott DeGraw 

Does your company offer voluntary (or supplemental) benefits products? If so, do your employees know you do? Do they know what the products can do for them? How effectively are you communicating the value of those benefits? It’s not a benefit if your employees don’t know what it is, or how to use it. 

Voluntary benefits is the term most often used to describe products such as life, critical illness, accident and cancer insurance that are available in the workplace through payroll deduction. They are sponsored by the employer but paid for by the employee. They aren’t part of the core benefits offering but are “voluntary” or “optional.” As the concept of core benefits has changed over time, especially the move to consumer-driven health plans (CDHP) with high deductibles, these products have become a critical part of an employer’s benefits offering. The category has also expanded to include lifestyle products, like pet insurance, identity theft protection, employee purchase programs, roadside assistance and more. 

The psychology of employee benefits 

Think of benefits in terms of Maslow’s Hierarchy. The basic premise is that we are driven by our most basic needs first. We can’t worry about wants until we have needs met. Two of the more interesting take-aways of this premise are: 1) Needs that have already been met no longer provide motivation, and 2) As needs are filled, other higher-level needs emerge. As the need for and acceptance of supplemental benefits has increased, these products are shifting into the basic category of employee benefits and are being replaced by new and more innovative products.  

In a BenefitsPRO survey, 87% of employees with ER-sponsored voluntary benefits reported that the availability of these benefits made them feel valued by their employers. Would it surprise you to learn that in that same survey, 62% of employees under age 50 stated they would not work for an employer that didn’t offer these benefits? Young workers don’t see voluntary benefits as just a nice added perk -- they consider them a requirement.   

If you aren’t offering voluntary benefits to your employees, you are missing a huge opportunity. These are the products your employees want – and they support the migration to consumer-driven health plans your budget demands.  

Are your employees prepared? 

Employers want to provide the most comprehensive benefits plan possible at the lowest price. Consumer-driven health plans (also known as high-deductible health plans, or HDHP) combined with voluntary benefits can do just that. Without voluntary benefits, high deductible health plans can create a financial burden on employees. Consider a 2019 Federal Reserve report that stated nearly 30% of adults cannot cover a $400 expense without selling something or incurring debt. Half of those would not be able to cover the debt at all. The additional protection provided by accident, cancer or critical illness coverage can give employees peace of mind and help them cover their deductibles when needed. Lifestyle products like wellness programs and identity theft protection can also help you realize business goals while also helping employees in their personal lives. 

Here’s a real-life example. A large manufacturing company introduced a CDHP with the goal of moving 25% of its workforce to the new plan. In the first year, only 5% migrated. When asked, employees expressed concerns about the first-dollar deductible expense.  

The employer added accident and critical illness plans to their offering and implemented a strong communication and engagement campaign. That year, they achieved 31% migration. 

In almost all cases, voluntary benefits can drive results. Your broker or benefits consultant and insurance carrier representatives have a wealth of knowledge to help you choose the products that best fit your business goals and employee needs. Then, leverage the power of your technology partner to drive educate and engage your employees and drive adoption. It’s a powerful synergy that benefits everyone.  

 

Scott DeGraw is vice president of technology partnerships with Allstate Benefits, a leading provider of voluntary benefits products. He works with employers, brokers, benefits consultants and benefits administration platforms across the country to help them meet their employee benefit goals.

 

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