Skip to main content

Is It Time to Refresh Your Voluntary Benefits?

by Wesley Price

Voluntary benefits have been around for several decades. These are coverages and products made available to employees for elective purchase at the employee’s expense. Over the years, as the cost of health insurance has continued to increase, employers have shifted the portfolio of offerings from employer-paid to voluntary. As a result voluntary benefits has evolved from being limited to main core benefits like dental, vision, and life insurance to including accident insurance, disability and critical illness. Additionally, new benefits are emerging based on growing demand, such as pet insurance, fraud protection and legal services.

The administration of employee benefits has also evolved. Previously, new enrollment into plans would require personnel onsite to enroll, educate and deliver the policies causing a potentially cumbersome disruption to an organization’s daily operations. The expansion of online enrollment has taken the burden out of the enrollment process, making it easier for the employee to sign up for benefits at their own convenience. Although employers and participants alike have access to online education, customer service and account information, having benefits experts on-site during the critical open-enrollment season remains a mainstay of the most successful programs.

Voluntary benefits have risen in popularity for several key reasons including cost efficiency, employee convenience, and enhancement to the overall employee benefits package. As a result, employers have been able to leverage these benefits for recruiting and retaining employees. In order to ensure that voluntary benefits programs continue to be valuable to the employer and employee, employers should follow a careful assessment process.

Review Program Offerings

Most employers will automatically include some of the main core voluntary benefits – dental, vision, life insurance. Considering the expanding list of available benefits, employers have the opportunity to select voluntary benefits that will set them apart. The most important factor in the selection process is to gain an understanding your employee population and group demographics. Employers can analyze the employee population by conducting an employee census, or other type of workforce evaluation to help determine the group make up. Retirement preparation may be important for the “baby boomers”, technological enhancements and remote access may be more of a priority for Millennials, and supplemental medical benefits more critical for Generation Xers — all needs which can be incorporated into a voluntary benefits offering.

Another good way to help determine which voluntary benefits are appropriate is to simply ask your employees. Employers who conduct surveys can get a firsthand indication of what is of interest to employees. However, that does not always guarantee high enrollment rates. It is imperative that you study and understand your population to determine the voluntary and employer-sponsored benefit package that makes the most sense for your entire group demographics. The right selection of benefits should also encourage enrollment and remain cost effective.

Enrollment Evaluation

A key factor to help gauge the success of a voluntary benefits program is the enrollment statistic. It is important to understand whether 5% of the population is enrolled in a given program, or if enrollment is 35%. If it’s 35%, there is a strong indication that the program is working. If there is only 5% enrollment, then that program may be a good candidate for a replacement, or evaluation at the very least.

Contract Review

Particularly with more established programs, it is important to re-evaluate contracts against what other carriers can offer today in terms of technology, customer service enhancements, and program options. Twenty years ago, employers may have included two or three options for voluntary benefits. As the industry increased the variety of offerings, and choice expanded for employers, the solutions often came from various insurance carriers – giving the employer and employees multiple points of contact. Carriers have been expanding their offerings giving employers a lot more options to choose between and allowing employers to bundle some of their services. However, employers must be mindful that too many voluntary benefits options can create employee confusion.

Now, voluntary benefits are taking on a new role. No longer seen as an after-thought or mere add-ons, voluntary benefits are part of the overall employee benefit portfolio; they fill coverage gaps, enhance limited benefits, and enrich the overall benefits package. When appropriately designed and fully integrated into the overall employee benefit portfolio, voluntary benefits help to attract employees with a robust benefit offering without high employer costs. It no longer makes sense for employers to have an outdated employee benefits package or a plan that does not include voluntary benefits at all. More employers are seeing them as the way to offset their employee benefits and retirement offerings. There is no magic number for how many different voluntary benefits an organization should have, and an older plan does not necessarily mean an inefficient plan. Whether it is an appropriate minimum participation level, variety of offerings, or cost parameters, employers will want to work with their advisers to determine success criteria for the voluntary programs they are running in their organizations.

If you have any questions, or would like to begin talking to an advisor, please get in touch by calling (800) 388-1963 or e-mail us at

Popular posts from this blog

COVID-19: Retirement and Benefit Plan Resources

As the COVID-19 crisis continues to unfold, we are closely monitoring news and updates from top sources. We’ll be updating this section as new developments unfold. Here are several key articles and links to help plan sponsors and administrators navigate the COVID-19 impact to retirement and benefit plans: Retirement Plans 4 Key CARES Act Provisions for Retirement Plan Sponsors Markets React to Coronavirus   Important Considerations for Retirement Plan Sponsors during the Coronavirus Pandemic In Fed We Trust Participant Education Services: Timely Help from a Safe Distance CRDs 100% Taxable for New York State and Local Income Tax Purposes in 2020 IRS Permits Remote Notarization of Participant Elections   Employee Benefits CARES Act Expands Health Coverage Rules Understanding the Historic $2 Trillion Stimulus Package Employee Compensation and Benefits During Closures and Furloughs DOL Clarifies Exemptions to Coronavirus Paid Leave Laws Small Business Exemption to

Coronavirus-related distributions 100% taxable for New York state and local income tax purposes in 2020

The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27. Under the Act, participants affected by the coronavirus may be able to take distributions in 2020 of up to $100,000 from an employer-sponsored retirement plan or an IRA. Although allowing these distributions from a qualified retirement plan is optional, we have seen that a number of employers have chosen to amend their plans to permit such distributions. The Act provides that coronavirus-related distributions will not be subject to the mandatory 20% withholding nor the 10% early withdrawal penalty (for those younger than 59½) that would otherwise apply.

ESG retirement investment gets boost from DOL: What plan sponsors should consider

Plan sponsors considering environmental, social and governance (ESG) factors in their investments received promising news with the U.S. Department of Labor’s (DOL) latest update in November. Although ESG investing has received increased attention over the past few years, DOL has not been transparent in defining how qualified retirement programs should incorporate ESG-specific metrics into their selection process. Until recently, the prevailing tone of DOL’s messaging has been that ESG should be secondary to financial factors. The Biden administration had hinted at loosening restrictions on ESG investing that were implemented during the final days of the Trump administration and forgone enforcement of those restrictions in the interim. This latest development is a realization of those earlier signals. With the announcement of DOL’s new rule, plan sponsors can, but are not required to, include ESG factors in their investment searches. Notably, plan sponsors can include ESG factors in th