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August 29, 2022

Getting the most out of voluntary benefits

Moving from transactional to consultative to deliver more value

John R Locy

As employers dive into benefit open enrollment season, they face an ever-expanding series of challenges, not the least of which is hiring and retaining new talent in the wake of a devastating pandemic. However, one challenge worth tackling this fall is your voluntary benefits program.

Voluntary benefits are often viewed as an afterthought in the core renewal process. They have assumed the role of “fringe” benefits implemented mainly to gain enrollment credits to subsidize technology or offset other benefit-related costs. 

At Marsh McLennan Agency (MMA), we see this unique benefit area differently. We see an opportunity: the ability to make a difference in attracting and retaining employees. We view voluntary benefits not as “fringe” but as essential.

What exactly are “voluntary benefits,” though? Put simply, they supplement and enhance an organization’s core benefits. They provide a financial safety net to help employees offset potential medical expenses and offer employees choice by customizing their benefits.

Your organization is now being tasked with meeting the needs of multiple generational segments—baby boomers, Gen Xers, millennials, and now Generation Z. Each group has unique, compelling needs that require a holistic voluntary benefits program. Gone are the days of simply offering accident and cancer insurance. Creativity and radically different thinking is necessary in this race for talent.

For instance, millennials and Gen Z typically look for choice and flexibility in their benefits package. Gen Xers may find value in assistance when it comes to saving for college expenses and other benefits, such as a bundled streaming package or concierge services. Baby boomers tend to look toward retirement and may need financial assistance or long-term care. These are generalizations, of course, and your priority should always be to meet the needs of your workforce.

With that in mind, understand that voluntary benefits generally fall into two distinct categories: 

Supplemental health services, which includes:

  • Accident coverage

  • Critical illness coverage

  • Hospital Indemnity

  • Etc.

Lifestyle benefits, which includes:

  • Identify theft protection

  • Pet insurance

  • Legal services

  • Etc. 

With the increase in employers offering high deductible health plans, employees face increased medical plan financial risk. Supplemental health benefits minimize this risk by providing employees income should they experience an accident, critical medical condition, or admission to a hospital. Lifestyle benefits offer employees choice and the ability to select benefits that are important to them—and choice is vital in providing value to a diverse workforce.

While the majority of employers see value in voluntary benefits, many do not put this belief into practice. The going concern is employees will purchase these benefits and not use them. In fairness, this fear has validity. This is in line with other concerns related to voluntary benefits, from perceived difficulty in their implementation and ongoing administrative needs to general confusion surrounding what the benefits are and how they’re used. With all of this in mind, it’s not surprising that many organizations see these simply as “products” rather than benefits.

At MMA, we believe in fundamentally changing the voluntary benefits space to better suit your needs. We approach your benefits package as a whole, with voluntary benefits as an integral part of it. We also strive to make the claims reporting process and other administrative aspects of managing a benefit plan as headache-free as possible.

Ultimately, voluntary benefits should not be acquired, offered, and administered through a transactional process where you are forgotten about once you’ve made your benefit selections. You need a consultative partner who can help you choose the right benefits, work with you to integrate them into your overall offerings, and guide you on adjusting your plan as needed.

For better or worse, the time to start thinking about and addressing this aspect of your offerings is, in fact, right now. The need for voluntary benefits was already growing before the pandemic but has intensified since it hit. Anywhere from 40%–53% of all employee segments currently have no personal savings at all. Developing a strategic and stewardship-driven voluntary benefits program can help mitigate some stressors related to this issue.

Ultimately, it’s time to hit the reset button and do more than simply check the voluntary benefits box. 

To learn more about how to get full value from offering voluntary benefits, please reach out to your local MMA team to request a voluntary benefit program review.