Choosing better benefits

As employees take on more responsibility for paying for health care, voluntary benefits can provide much-needed additional coverage. EBN spoke to a number of voluntary benefits providers to get their thoughts on the major trends they see coming in 2012. Not surprisingly, all the trends and influences in the HR world at large - health care reform, employer cost-shifting, technology and communications - affect the voluntary benefits industry as well. Here, we provide a summary of key trends, along with charts and data to help employers plan their voluntary benefits strategy going forward.

Cost-shifting

The move toward employers shifting more health care costs on to employees is helping drive voluntary benefits sales, says Glenn Petersen, vice president, voluntary benefits, MetLife. He's also seeing a trend toward an increased use of third-party benefit platforms for enrollment and administration.

Health care reform

Health care reform, coupled with rising costs, has employers of all sizes concerned. According to a Colonial Life survey, employers are taking three concrete actions to deal with this double whammy:

* 51% are increasing their health insurance premiums.

* 48% are increasing employees' health insurance deductibles or co-pays.

* 49% are adding voluntary benefits.

With regard to voluntary benefits, "that was bigger than anything I'd seen in the past," notes Stephen Bygott, assistant vice president, marketing analysis and programs with Colonial Life. "That was confirmation that voluntary benefits are continuing to be an increasingly important component of employee benefit programs."

Communication, education and technology

One of the primary changes to the voluntary benefits landscape is the move toward more electronic communication.

"That's important to voluntary benefits because how well those benefits are communicated will determine how employees will participate in the plan," says Mark Lower, head of voluntary sales and strategy with ING.

In addition, the importance of multicultural and multilingual communications will rise. "If we're going to be communicating these voluntary benefits electronically through technology we have to make sure employees of all cultures and languages have the opportunity to make choices about their benefits," Lower says.

Communicating to different demographics within the organization is also an emerging trend. "Circumstances are shifting so it's important for providers and brokers to keep their employer-clients up-to-date on the needs of an evolving workforce," says Petersen. "With a diverse workforce comes diverse needs with regards to protection and planning products."

Products

Products that have not traditionally been headliners - critical illness and accident insurance, for example - are becoming more important, says Erich Sternberg, CEO of AlwaysCare Benefits.

Lower agrees. "Products like critical illness, hospital indemnity insurance, accident insurace - you're seeing some evolution in that area and some bundling of those products to supplement the changes now taking place in the health care arena," he says.

Bygott adds that while disability and supplemental life insurance remain the foundation of voluntary plans "employers and employees are seeing an increased need for these specialty products like critical illness and we're seeing some good growth there."