Employers know that finding the right benefit offerings is critical to employee satisfaction and retention. Supplemental health plans, also known as voluntary benefits, can make a huge difference in the lives of employees amid the COVID-19 pandemic and beyond. However, employee needs are constantly changing, requiring employers to reevaluate their voluntary benefits offerings to ensure employee needs are met.
However, the subject of benefits raises the issue of balancing cost with value – both in terms of return on benefits investment and in value to employees. The good news is that the following three strategies can help ensure a company’s voluntary benefits plan meets employee needs as they evolve.
40% of Americans have less than $300 in savings, making it difficult to pay for expenses not covered by core insurance.1
1. Conduct a Voluntary Benefits Plan Audit
Employers often perform an audit of their core health plan, but auditing the voluntary benefits plan is just as important.
A voluntary benefits plan assessment can help employers achieve better value and offer more comprehensive coverage that accurately reflects which benefits people use. Hospital indemnity, for instance, is quickly becoming one of the fastest-growing supplemental benefits products with an increased focus on hospitalization benefits because of the pandemic.
To find the right voluntary benefits plan design, employers should consider the following:
- Evaluate current coverage. A plan audit does not need to result in a carrier change. Rather, the audit can identify opportunities to enhance coverage and add or consolidate carriers.
- Review current benefits utilization and plan satisfaction. Employers should review employee participation in voluntary plans and gauge satisfaction with current plan participants.
- Analyze population health data. Use core health plan audit results to assess the impact of specific voluntary benefits. Gaining a full picture of employee demographics can further influence plan design. For instance, if a company has a large population of female employees, it might make sense to explore hospital indemnity coverage because of childbirth and related labor and delivery costs.
In addition, an audit allows an organization to see how it compares with competitors with regard to benefits and coverage, which can also help direct plan offering and design. Aon consultants can provide specific industry benchmarks so companies can see how they stack up.
According to Aon Health Survey, 2021 and Beyond, approximately 50% of employers in a 2021 survey offer a hospital indemnity plan.
Employers are becoming more rigorous in proving the value of plan designs, resulting in increased coverage requests for spouses and dependents. This adjustment makes sense, as dependent exposure is the same as the primary insured and providing coverage of up to 100 percent for spouses is valuable for employees who might otherwise have to cover the remaining expenses out-of-pocket.
In the case of critical illness protection, carriers and partners have been quick to respond to employer interest in this area, offering new ideas around plan designs. Improvements could include coverage for diabetes, Crohn’s disease, transient ischemic attacks (mini-strokes), post-traumatic stress disorder, and expanding infectious disease coverage to include COVID-19.
According to a 2021 survey, half of Americans said they carried debt as a result of medical bills, and 46 percent had medical bills go to collection.2
2. Integrate Voluntary Benefits With Core Enrollment
Even before the pandemic, many employees lacked a full view of what medical plans could cost, what they did and didn’t cover, and where their financial responsibilities lay.
Integrating voluntary benefits enrollment with core enrollment can help employees make more informed choices across the full spectrum of benefits.
Companies such as Aon can integrate decision-support tools like benefits calculators into the enrollment process. These can help employees navigate benefits enrollment, making it easier to compare plans, see where coverage gaps exist and opt for supplemental coverage to fill those gaps.
For example, when comparing health plan options, employees could identify varying out-of-pocket exposures to medical benefits, which may influence the health plans they choose and what supplemental health plans (critical illness, hospital indemnity, or accident) are added to fill the gaps.
3. Explore Bundling and Third-Party Premier Partnerships
Multi-line insurance carriers can help employers maximize their human resources budgets by offering bundled pricing options for voluntary benefits with group and medical lines such as life and disability or medical and dental. Bundling can also help organizations offer more of the voluntary benefits employees want at a discounted price while also avoiding juggling several carrier contracts at once. This alleviates some of the administrative burden of plan implementation.
In addition, many third-party organizations (such as benefits administration platforms) are forming exclusive or premier partnerships with carriers to help streamline and offset the costs of implementing voluntary benefits plans. Employers should ask their third-party providers if they have preferred carrier partners and how that could help reduce administrative fees.
While the pandemic accelerated the need to review and update voluntary benefits plans, employers that adopt these strategies can succeed in providing valuable, cost-effective benefits long term.