Last time we discussed how to use a voluntary benefit carrier to help provide consolidated billing (click here to read VB Buzz issue 5)

Let’s move to that pile of paperwork from this year’s open enrollment.  Now that everyone has turned in their enrollment packets (everyone HAS turned them in, right?), you or your staff can dive through them, make sure they are all filled out completely and legibly, make sure there aren’t any selections that have been missed, consolidate those forms on to the carrier’s spreadsheet, and send them off to the various companies. 

What is the value of offering voluntary benefits to your employees? Never mind that most of your employees need the products, need the benefits.  Never mind that nearly two-thirds of Americans can’t put together $1,000 in an emergency without borrowing it.  Never mind that deductibles, coinsurance, and copays have been increasing year over year.  What’s truly the value to you, the business owner, for the “hassle” of offering extra benefits to your employees? 

Let me ask you, why do you offer benefits in the first place?  Isn’t your benefit package already one of the biggest line items in your budget?  What do you hope to get out of that expense?  Isn’t it to attract and retain the best work force possible?  It’s been a long time fact that your benefit package is a big reason employees consider joining your company or stay with your company, second only to salary, and sometimes the benefit package even trumps the salary when it comes to why employees pick where they work.

In my last blog we talked about making the leap to paperless enrollments (click here to read VB Buzz issue 6).  To help make that transition easier brings us to our third “extra” value that the right agency and voluntary benefit carrier can bring to you

You and your human resource department do a terrific job each year coming up with the best program you can offer to your employees.  Sometimes that means making some significant changes in your carriers, plan design, and cost share.  How much fun is it to then be expected to be the expert in all facets of your benefit package, and have to answer questions that your employees have?

The next most common objection from an employer to offering voluntary benefits(click here to read “They don’t want it”) is “My employees can't afford it.”

Of course they can't. I can be a smart aleck and say, “if you paid them more, then they could.” But you and I both know that isn't the answer.

We have a habit of living up to our means, don't we? No matter how much we make, we expand our standard of living: buy better clothes, fancier cars, add HBO to our cable line up. Everyone already spends everything they earn.

Yet how is it then that people will stop by Starbucks on the way to work, or run out to a restaurant for lunch every day, while at the same time telling you and everyone else that can't afford it? It's all about choices, and priorities, isn't it.

We want to have money, we want to save for a rainy day, or for retirement, or for whatever, but then all of a sudden, "Squirrel!" That lunch at the restaurant just seems better. That soy skinny latte seems tastier. We become willing to part with our money for that thing which we decide is a priority right now.

One of the most often heard objections from an employer to offering voluntary benefits is, “My employees don’t want it.”

How do you know??

Because you asked them???

In my last blog, we talked about “what are voluntary benefits.” READ LAST BLOG

Now we are going to start discussing the first on the list of voluntary benefits: supplemental plans.  These plans are designed to pay cash directly to the policyholder in the event of some specific illnesses or injuries.  The various plans are designed with a list of benefits that will pay the policyholder either a large “lump-sum” benefit upon diagnosis, or a series of benefits based on what treatments the covered person goes through.  The employee can use the money wherever he or she sees fit, whether their deductibles and copayments or their regular bills at home.

As I stated, the employee can use the benefits to help fill in whatever gaps they may have, like deductibles, copayments and coinsurance, or to simply help them pay their bills at home like mortgage or rent, car payments, and utility bills. These latter expenses are in many times the greater concern, because when they, their spouse or kids are getting medical treatments their income is likely being reduced due to missing work. 

Quoted in many studies, 3 out of 5 bankruptcies are the result of medical expenses, while nearly 4 out of 5 of those households who filed for bankruptcy had health insurance.  It isn’t the medical bills that cause them to go bankrupt, it’s the fact that 65% of America doesn’t have access to $1,000 in an emergency without borrowing it, according to a survey from Aflac*.  Not surprisingly, this is even worse with the younger Millennials, and Generation Z.  In Millennials, 62% surveyed have access to less than $1,000 in an emergency without borrowing it, and 28% have access to less than $500.  For Generation Z, fully 84% have access to less than $1,000, and 49% have access to less than $500.

*Aflac 2016 Workforces Report - https://www.aflac.com/business/resources/aflac-workforces-report/default.aspx

VB Buzz, Vol 1, Issue 1

Employers are being squeezed from many different directions, from competition in the marketplace to keeping their bottom line down to competition for employees in the marketplace.  While we at Kapnick cannot do anything about the competition, we can help employers with their bottom line and their attraction and retention of employees.  Voluntary benefits are a great way for an employer to increase their benefit package while keeping their costs down.

The term “voluntary benefits” encompasses a variety of plans.   Most of these products and services are benefits that the employer can make available to the employees with no direct cost to their bottom line, because they are fully funded by the employees through payroll deduction, or in some method that feels like a payroll deduction.  Many times these plans and memberships are not available for individuals to participate in, or at the very least are offered at a discount due to the employer’s sponsorship.

As an employer, the more you do for your employees, the more your employees will do for you, and having a robust benefits plan frequently ranks as the first or second most sought-after priorities for someone looking to make a job change.  By the employer providing voluntary benefits, the employee is empowered with a greater amount of choice, and they can customize exactly what they want, thus the employee ends up with a greater level of satisfaction in the overall benefits package.

Here is a quick overview of many types of voluntary benefits employers are adding:

• Supplemental “indemnity” plans, like accident, critical illness, and hospital indemnity, pay cash benefits directly to an employee.
• Voluntary short and long term disability, that can be the only disability plans the employer offers, or that employees can use to supplement the employer-paid disability options.
• Life insurance – term, universal life, or whole life options
• Identity theft monitoring and restoration services
• Access to legal assistance, most services at no charge to members
• Home and auto insurance, sometimes at discounted rates through payroll deduction
• Financial wellness plans, from financial education to access to low-cost loan options in the event of an unexpected expense

Volume 1, Issue 1, Winter 2016

Developed in collaboration with our Partners at Assurex Global, we at Kapnick, are excited to announce the release of our first quarterly newsletter. The newsletter is intended to highlight issues that our high net worth clients routinely encounter. This edition focuses on the unique challenges posed by of the Internet of Things within a “smart home,” and more.