If anyone still wonders whether voluntary benefits will continue to gain traction in the marketplace, no need for concern. Simply ask a few of the three quarters of a million U.S. employers who offer a voluntary option to some 90 million employees* about the broadening embrace of voluntary benefits. More than half of workers surveyed in MetLife's 10th Annual Study of Employee Benefits Trends reported they were interested in having a wider array of voluntary benefits which they could purchase and pay for.
Despite the clear popularity of benefits which employees pay for wholly or in part, though, there is plenty of room for a stronger presence of these products on the benefits menu. Only 19% of employers surveyed in the Employee Benefits Trends Study planned to increase the number of voluntary benefits offered in the next 18 months, and participation rates often are not where employers want them to be.
At the same time as employees express strong interest in voluntary benefits, they also indicate that they want benefits that fit their specific needs. Almost three-fourths (73%) of employees surveyed wanted more personalized benefits geared to their age group. The same percentage wanted a greater variety of benefits to choose from, and 74% were looking for more personalized benefits geared to their individual circumstances.
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So the question of "Where do we go from here?" is timely. With so much ground work done on behalf of voluntary benefits already, now is an opportune moment for HR and benefits managers to create a decision-making framework that can lead to a flexible product suite with broad appeal to a diverse workforce. The specific challenge for meeting cross-generational needs and preferences is organizing workforce information and using that information to develop optimal benefits choices for different groups of employees.
The Voluntary Value Formula (VVF) developed by MetLife is a common-sense approach to unlocking the full value of voluntary benefits for employer and employee. The VVF is based on traits and behaviors that many HR and benefits professionals encounter in their everyday work. Research shows that there are three key factors that are important to employees when they evaluate their voluntary benefits choices. Real-life need (n) for the solution provided by the coverage is the first consideration. Then the product has to have appropriate features (f) that clearly fit the need (n). Finally, it must appear to be worth the price (p). If n+f+p are aligned, we have V, recognized value.
Click on this link to read a white paper explaining more about the Voluntary Value Formula.
Knowing the characteristics of a workforce lets an employer have insight into what can appeal to various are groups. Well-designed products have a number of features, and certain of those likely will appeal more than others to different generational groups. For example, Baby Boomers are likely to look for a different list of covered conditions in a critical illness or cancer insurance plan than younger workers. The latter could value a vision plan that offers discounts on fashionable designer frames compared to a Gen X parent who wants coverage for polycarbonate lenses for a child's sport's activities.
Other examples of generationally appropriate plan features could be a product with guaranteed issue and no eligibility restrictions for pre-existing conditions, which could appeal to older members of a workforce. An attractive feature for younger employees could be portability of the benefit.
"When a product offers a solution that speaks to a personal need with plan features that I can see fit my situation, at a price I think is reasonable, I can clearly recognize the value and am more likely to open my wallet. The formula helps employers to select and present voluntary benefits options more effectively, which, in turn, increases employee participation. In a sense, it's a tool that can help employers predict the success of adding a voluntary benefit," observes Michael Fradkin, senior vice president, Voluntary and Worksite Benefits, at MetLife.
"It is worthwhile to realize that benefits are not commodity products. Plan features can differ on important points. In addition, participation can be influenced by other factors such as ease of enrollment, customer service and intuitive tools that speed and simplify decision making. To realize the full value of their voluntary offerings through employee engagement and loyalty, employers need to effectively market voluntary products to their workforce," Fradkin adds.
A MetLife White Paper, "Unlocking Voluntary Value – A Foolproof Formula to Pinpoint the Right Voluntary Benefits for your Business" — provides a helpful chart that illustrates how various features of voluntary products can fit different generational needs. Emphasizing selected features for the right groups can supply a sense of benefits customization. To see the paper, click on this link: metlife.com/voluntary
*LIMRA, "Voluntary Worksite Benefits: Penetration and Market Potential," 2011
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