Pet insurance is passé. Offer financial planning as a voluntary benefit or employees might walk.
It’s one of the lessons learned from a Willis Towers Watson survey on the voluntary space.
401k advisors are frustrated with “distractions” that make saving more difficult, often complaining of the shrinking amount of each benefits dollar that participants are able (or willing) to allocate to retirement plans.
With health care costs rising, keeping clients focused was tough enough; add more voluntary benefit offerings, and it becomes exponentially more so.
Willis Towers Watson now finds a growing number of U.S. employers consider voluntary benefits an integral component of their core employee benefits strategy, according to its 2018 Emerging Trends: Voluntary Benefits and Services Survey.
“Historically, employers offered voluntary benefits to supplement their core health and retirement benefit coverage,” Lydia Jilek, director, Voluntary Benefits with Willis Towers Watson, said in a statement. “Now, with an increasingly diverse workforce, employers no longer consider voluntary benefits as simply add-ons, but rather as a way to address a host of employee needs, offer choice and allow employees to personalize their rewards.”
According to the survey, only a handful of respondents (5 percent) say voluntary benefits will have little importance to their employee value proposition and total rewards strategy. Five years ago, 41 percent of employers said voluntary benefits would have little importance.
Meanwhile, more than two-thirds of employers (69 percent) believe voluntary benefits will be a very or more important component of their employee value proposition in three to five years, nearly double the percentage (36 percent) who currently feel this way.
The survey identified education benefits that address rising student loan debts and parents saving for children’s future college cost as important financial well-being benefits that are gaining traction.
According to the survey, 8 percent of employers currently offer student loan consolidation programs, which could increase to 34 percent by 2021.
Similarly, 10 percent of employers offer student loan refinancing arrangements, which could increase to 35 percent by 2021. On average, more than half of all respondents offer some form of financial planning and counseling service, which could increase another 10 percent by 2021.
Other voluntary benefits expected to attract more employer attention over the next few years include:
Identify theft protection: 36 percent currently offer—could increase to 63 percent by 2021
Pet insurance: 34 percent currently offer—could increase to 57 percent by 2021
Long-term care insurance: 16 percent currently offer—could double to 33 percent by 2021
Critical-illness insurance: 43 percent currently offer—could increase to 71 percent by 2021
Hospital indemnity: 24 percent currently offer—could more than double to 50 percent by 2021