Voluntary benefits, which allow your employees to choose certain types of coverage and then pay for some or all of the related costs, will continue to grow in 2024. With as many as five generations in the workforce and an increasing preference for personalization, the benefits agency industry have seen the demand for customizable benefits grow exponentially. However, the good news is that voluntary benefits are largely considered a win-win for employers and employees.
As the employer, you stand to gain by:
- Offering a wider range of benefit options at little or no extra cost to you
- Increasing the perceived value of your benefits by responding to employees’ needs
- Saving on payroll taxes when employees pay for coverage with pretax dollars
Employees also receive several advantages, including:
- Customizing coverage based on their individual needs, including financial, physical and mental health challenges
- Saving money through group rates instead of individual coverage
- Choosing from vetted companies rather than researching options on their own
- Gaining convenience and tax savings through pretax payroll deductions
- Potentially having the option to convert coverage to an individual policy once their employment has ended
Let’s look at 11 voluntary benefits — five mainstays and six newer options — expected to grow in 2024 and beyond for any benefits agency.
Mainstays
The following five options are by no means new offerings, but they continue to increase in benefits agency popularity. They offer protection to employees and loved ones facing illness, injury or death:
1. Life insurance — Voluntary life insurance is a top choice because it guards against one of life’s biggest risks. This option allows employees to select supplemental coverage based on their individual and family needs under more affordable group rates. In addition, coverage under a certain dollar amount often comes without a medical exam. This allows employees with higher risk factors or preexisting conditions to obtain coverage that would otherwise be excluded.
2. Accident insurance — Employees can use accident insurance to help pay for certain costs that aren’t covered by their medical plan. These include ambulance transportation, medical tests, intensive care treatment, and rehabilitation.
3. Critical illness insurance — This type of policy covers specified major health events like cancer, heart attack and stroke. It pays a lump sum that employees can use to cover medical expenses, replace lost wages, and pay for child care and other expenses.
4. Hospital indemnity insurance — Three days in the hospital typically costs about $30,000, according to healthcare.gov. Hospital indemnity insurance provides an extra layer of protection. It pays employees a lump sum to cover expenses related to hospital admissions and stays for specified injuries and illnesses. As with critical illness insurance, employees can use the funds at their discretion.
5. Disability coverage — Short-term disability (STD) and long-term disability (LTD) are perennially popular voluntary benefits because they allow employees to replace some of their income if they can’t work due to sickness or injury. STD coverage usually provides benefits up to six months, while LTD provides benefits for years or even decades.
Newer options
The following options are increasingly in demand as employees take a holistic approach to wellness and risk protection:
1. Mental health support — Mental health awareness had grown before the COVID-19 pandemic, but the spotlight is even brighter now. Mental health is expected to be a top trend in employee benefits. Voluntary benefits include therapy sessions, telehealth counseling, and subscriptions to mental health apps.
2. Financial planning services — Financial concerns are consistently reported as a top stressor. With continuing fears over inflation, financial wellness is becoming an expected part of the employee experience. Voluntary financial benefits include meetings with financial advisers, budgeting workshops, student loan repayment programs, credit card debt counseling, estate planning, and other money management services.
3. Child care and elder care assistance — Support for employees caring for children and older relatives is a fast-growing voluntary benefit. It has grown more than 175% over the past three years, according to the benefits administration platform PTO Exchange. Voluntary benefits include vetted caregiving providers, backup child and elder care, and support coaches. The recent growth in caregiving assistance is likely to continue. An estimated 20 million people start caring for an elder family member each year.
4. Identity theft insurance — Our lives are moving online — and scammers are taking advantage. Identity theft insurance can support employees who have suffered monetary or reputational damage due to identity theft. Voluntary benefits include monitoring of sensitive data, extra layers of account verification, breach alerts, and compensation for financial losses.
5. Legal services — This benefit can connect employees to lawyers with the expertise to prepare wills, trusts, and other legal documents. Employees may also receive legal services for tax, traffic, and civil violations. With attorney fees ranging from $100 to $300 an hour (or more), these benefits can add up quickly.
6. Pet insurance — Pet adoptions have jumped dramatically, and pet care shows no signs of slowing. Pet insurance has grown 120% over the past three years, reports PTO Exchange. It can help cover many expenses, including injuries, illnesses, and prescription diets.
Finding the right benefits
In short, talking to a benefits agency like Conrade Insurance Group’s team about voluntary benefits is a great place to start. They can help you identify the best offerings for your employee population and answer your questions on carriers, costs, and plan administration.