Voluntary benefits thrive in times of uncertainty
Here's a look at 4 trends to expect as employees turn their focus to voluntary benefits in 2021.
Human resources and benefits professionals spent much of 2020 creating ways to keep their employees employed and engaged during this unprecedented time. 2020 brought a global pandemic, of course, but we also saw natural disasters, an unexpected housing boom and dramatic social change. While these matters created new obstacles in the workplace, employers were given the unique opportunity to meet employees’ needs through a customizable mix of employer-sponsored and voluntary benefits.
For many years, healthcare and other core benefits such as life, disability and dental insurance have been the top focus of the human resource community. While many employers have tested the waters of voluntary benefits in recent years, 2020 brought clear evidence that employees not only need access to diverse benefit options, but they also desire a variety of options that allow for a truly customized benefits package.
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Shortly after the onset of the pandemic, we saw an increase in employers breaking the traditional model of only offering benefits during open enrollment. Some of our clients saw their employees facing uncertainty and wanted to provide them with opportunities to enroll in voluntary legal and identity theft protection during a defined off-cycle enrollment period. The result was employees gaining access to critical coverages such as wills and health care directive preparation, and a renewed sense of confidence in their employer for offering these benefits during an uncertain time.
Employees using these benefits saw their value almost immediately. From March to April, during the start of the pandemic, we saw a 44% increase in estate planning requests, mostly Will preparation, from LegalShield plan participants. Aggressively low home mortgage rates and the desire to escape metropolitan areas for the more socially distanced safety of the suburbs has propelled an unexpected increase in real estate transactions and housing construction. The LegalShield Economic Stress Index, a suite of leading indicators of the economic and financial status of U.S. households and small businesses, shows plan member usage of services related to these economic indicators, at an all-time high.
As our world continues evolving into a more contactless society, the mobile app experience provided high levels of satisfaction as plan participants were able to connect with a legal or identity theft professional at the touch of a button. Participants in our LegalShield plan even had the ability to start preparing their Will on our mobile app. We also made available to all of our client’s employees COVID-19 digital resources, microsites, and videos to help educate employees on the importance of these benefits during this time.
Even for those employers who did not take advantage of making these benefits available off-cycle, we are seeing a significant increase in employers rolling them out to employees in the 4th quarter, for early 2021 effective dates. The value of these benefits is appreciated now more than ever, employees have a pronounced need for them and they are easy for HR teams to implement. We expect to see voluntary benefits, as a whole, continue to gain importance in 2021 and beyond.
4 voluntary benefit trends for 2021
1. Growth in popularity of voluntary benefits; specifically legal and IDT plans
Prior to the pandemic, nearly 50% of employees wanted their employers to provide them with these benefits and 61% of employers said their company would consider offering legal or identity theft protection as part of their benefits package. After the events of 2020, which heightened employee’s awareness of personal legal needs, we anticipate the demand for these benefits to continue to increase in 2021.
2. Higher interest in off-cycle enrollments
It is important to note that even before the pandemic, we saw a growing interest in off-cycle enrollments. Given their proven value, most acutely during uncertain times, interest has accelerated at a higher volume. We anticipate a healthy approach to off-cycle enrollments next year as employers want to highlight the value of these benefits away from their core benefit offerings. This allows employers to focus communication efforts on a select number of benefits, which decreases the chances of employees overlooking the value being provided to them.
3. Increase employer engagement of voluntary benefit communications
While employee interest in voluntary benefits continues to increase, so does employer interest in more effective communications. This year, we have seen a heightened awareness of the importance of educating employees on the value and practicality of legal and identity theft coverage. Employers are keen on talking to employees and ensuring that benefits communications are tailored to their specific life stage, a trend we anticipate will continue into the New Year.
4. Greater demand/need for contactless services
Service delivery for voluntary benefits has always been critical and a true differentiator between benefit providers. Before the pandemic, over 70% of employers felt strongly that a mobile app that provided direct access and convenient features such as a monthly credit score tracker was an important plan feature. As an already digital society, the pandemic further highlighted our demand and need for contactless services. We project a continued focus on virtual interaction between participants and their benefit service providers.
Indeed, 2020 was a year unlike any other in our lifetime. However, with heightened employer dedication, employee perseverance and an evolving digital world, it is likely that employee benefits in 2021 will emerge as more nimble and forward-thinking, and result in higher employee satisfaction than ever before.
Emily Rose is senior vice president, broker and partnership sales, at LegalShield.
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