Filed Under:Health Insurance, Individual Health

Benefits in a Time of Uncertainty

Voluntary benefits can be like warm cocoa for a worker's finances.  (AP Photo/Larry Crowe)
Voluntary benefits can be like warm cocoa for a worker's finances. (AP Photo/Larry Crowe)

Many years ago, I studied human resources (then called industrial relations) at the University of Minnesota.

From that and years in the employee benefits profession, I have a strong understanding of the complex decision process for an employer when developing a benefits plan – especially a larger employer with a diverse employee population. While I do not spend an excessive amount of time appreciating the benefits offered by my own employers, I appreciate having options for medical, dental and other insurance coverages. One size does not fit all when it comes to employee benefits.

Since leaving the realm of pure health insurance and entering the world of voluntary benefits, as well as studying healthcare reform, I have seen a broad range of perceptions about the value of medical benefits, voluntary benefits, and the expected implications of healthcare reform on both. While my crystal ball is murky when it comes to figuring out what the Supreme Court is going to decide about the constitutionality of the individual mandate, I believe employees appreciate their employer-sponsored benefits more now than before.

In the voluntary benefits world, claims are not typically auto-adjudicated as they are in the medical world. With auto-adjudication, claims are submitted electronically and most pass though the system without being looked at by a live person. In contrast, voluntary life, disability, critical illness, and accident claims simply don’t lend themselves to an automated process. As a result, carriers have more personal contact with claimants and can more effectively survey them to determine their satisfaction with their benefits.

At ING U.S. Insurance, we recently conducted a survey to better understand how benefits impacted employees’ lives. The results were gratifying, showing how much employees value not only the benefits, but also their medical coverage. I have to admit I wasn’t sure what to expect, but the survey confirmed for me how valuable these benefits are. Claimants truly see the benefit. Among the claimants surveyed, 93% said they would buy voluntary insurance if making the purchase decision again and 92% would recommend this coverage to a friend or family member. These already-high percentages were even higher for critical illness claimants.

While I firmly believe voluntary benefits are secondary to a medical plan, I also believe a well-constructed portfolio of voluntary products can be a fantastic complement to most medical plans. Apparently, claimants agree. When participating in my company's study, claimants stated that:

  • “This benefit gives me a peace of mind knowing it's there if the need arises.”
  • “It is a comfort to have the extra coverage. Because you just never know....I am adopted and do not have any family history.”
  • “I took things for granted and had to realize no one is exempt from illness.”
  • “Being a single parent, this benefit is extremely comforting to know it's there – it makes me feel safe.”

As employers begin to contemplate 2013 plan designs, it’s a good time for financial professionals to approach their employer clients to discuss how voluntary benefits can help complement and strengthen their employee benefits offerings. Determining a benefits plan is undoubtedly complex for employers, yet the impact and value of voluntary benefits is a powerful selling point.

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