Voluntary Benefits Plans: Win-Win Solution for Employers, Employees

Submitted by: Richard Davis, Market Director, Combined Insurance

Employee benefits continue to be one of the fastest rising expenses among U.S. employers. And employee needs and expectations for comprehensive, affordable health and welfare benefits are certainly not decreasing. This puts tremendous pressure on businesses of all sizes to find better ways to hold the line on expenses while continuing to offer a competitive benefits package to employees. Voluntary benefits can be an effective solution to help balance the need to manage costs while providing a competitive benefits offering.

Voluntary benefits — a brief explanation

Voluntary benefits programs give employees the opportunity to select the appropriate insurance coverage for them and their families based on their needs. Common voluntary benefit insurance plans available include disability, life insurance, specified disease and supplemental accident and sickness. These plans can offer specific cash payments because the benefit is defined by the policy and will be paid regardless of actual expenses.

Another benefit of these plans is the option to use the money any way the insured chooses. These benefits are paid directly to the individual and can be used toward groceries, to help with medical expenses or follow-up care, or even for pet care expenses incurred while the insured was hospitalized. The benefits are paid regardless of other insurance coverage and can be used as the insured sees fit.

How voluntary benefits plans can help employers

Voluntary benefits plans allow employers to offer an enhanced benefits package for employees at little or no cost to the company. Voluntary benefits plans:

• Provide additional coverage but are not typically subsidized by the company — all premiums are paid by the employee.
• Put spending decisions in the employee's hands — because this coverage is individual and completely optional, an employee chooses what he or she wants and is willing to pay for based on his or her individual needs.
• Generally require little or no administration — benefits administration, from providing informational materials and enrollment forms to responding to plan questions and assisting with claims, is handled by the insurance provider.

Employees see voluntary benefits plans as a convenient, cost-effective way to help fill gaps in primary health insurance plans and enhance existing coverage.

Voluntary benefits plans are typically available year round. You can usually add voluntary plans to your benefits offering at any time since there is no defined enrollment period.

Many insurance providers can work with employers to compile a total compensation statement, which shows employees their total compensation including salary as well as the dollar amounts their employer spends on employee benefits including vacation pay, unemployment insurance and social security. This can help employers educate their employees about benefits and how they contribute to the total value an employee receives from the company. In a competitive job market, this kind of information can help with employee retention and recruiting.

Richard Davis is a Market Director with Combined Insurance (www.combinedinsurance.com), a leading provider of supplemental accident, health and life insurance products marketed through a unique face-to-face, needs-based approach. Richard manages the Philadelphia market for Combined Insurance and can be reached at 717-763-8023 or Richard.Davis@Combined.com. Combined Insurance is a member of the ACE Group of Companies, a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE: ACE), the ACE Group of Companies conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at www.acelimited.com.

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