Next year stands to be a pivotal year for employee benefits — particularly as the Patient Protection and Affordable Care Act continues to shake out, likely propelling the sale of voluntary benefits products even further, experts say.
Indeed, according to MetLife’s 2013 Study of Employee Benefits Trends, 58 percent of employers say providing voluntary benefits is a significant benefits strategy — up significantly in 2012 from 32 percent in 2010. Nearly half of employers who currently offer voluntary benefits say they are likely to increase the number of products they will offer in the next two years. We continue to see increased interest from employers of all sizes in adding voluntary benefits to their overall benefit programs,” says MetLife’s Michael Fradkin, senior vice president, voluntary and worksite benefits in Bridgewater, N.J. “That’s supported by feedback from employees about wanting additional choice and the opportunity to tailor their own personal benefit program to their needs.”
Fradkin and other experts detail which voluntary benefits products are likely to be hot commodities — and which products are emerging — in 2014:
1. Critical illness, accident and hospital indemnity plans – Gap products are going to explode because PPACA and employer insurance trends make gap an easy sell,” says Mathew Gahm, founder and managing director of Worksite 101 in Colorado Springs, Colo.The cost of health care for companies used to be manageable, but costs have continued to climb and will now explode because of PPACA’s provision of guaranteed issue coverage for everyone, no matter their health status,” Gahm says. “It is a good thing to give people with pre-existing conditions access to insurance, as sometimes their disease or condition is no fault of their own, but a heredity factor. I think that because of the guarantee issue component, nearly everyone’s premiums are going to rise.” Critical illness plans are particularly rising in popularity because more people are getting such illnesses as heart disease and cancer, partly due to unhealthy behaviors and partly to the aging of the baby boomer generation, the largest generation in U.S. history, he says
2. Life, disability, dental and vision – Tom Wagoner, president of Accelerated Benefits in Columbus, Ohio, says that more employers in the future are likely to structure their offerings as “benefit banks,” letting employees choose between medical, dental, vision and life products. Tom Wagoner, president of Accelerated Benefits in Columbus, Ohio, says that more employers in the future are likely to structure their offerings as “benefit banks,” letting employees choose between medical, dental, vision and life products.
3. Group auto and home – Group auto and homeowners policies have become the next up-and-coming voluntary product offerings, Fradkin says. “Employers, by providing these products through the workplace, can provide these products at a greater discount than generally available in the retail markets,” he says. “They also offer the convenience of payroll deduction.”
4. Legal – Group legal plans are part of a new boom in voluntary benefits across the board, and brokers are playing a bigger role than ever, says Marcia Bowers, sales and marketing director at Hyatt Legal Plans, a Cleveland unit of MetLife. More than 70 percent of Hyatt’s current book of business was sold by brokers, and almost all plans taking effect in January were sold by brokers. Legal plans also have more “curb appeal” for both employers and employees, she says. According to Hyatt’s research, 80 percent of employers who offer a legal plan do so because it delivers unlimited access to attorneys, and “their employees have legal and financial issues right now.”
“Workplace productivity is always a concern for employers, and the more sophisticated and complicated society becomes, the more that continues to be true,” Rowe says. “In the old days, we left the office at 5 and there was no email to check when we went home. But now there is less space between work and non-work — it’s more blended together. The continued pressures of a more sophisticated society means that more people need access to benefits like legal, ID theft, tax advice, financial education, etc.”