Unum’s Jeff Smith on why voluntary benefits are surging

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The voluntary market continues its rapid growth trajectory, as employers increasingly turn to these employee-paid for benefits to fill gaps in the coverage that they offer.

To learn more about the latest voluntary trends, Employee Benefit News sat down with Jeff Smith, assistant vice president in Unum’s National Client Group, which recently expanded its own lineup of voluntary offerings.

EBN: What’s new in the voluntary benefits market?

JEFF SMITH: The benefits industry in general, and especially voluntary benefits, has seen a surge of new technology that informs and educates consumers more effectively about their benefit options.

Employers aren’t necessarily subsidizing VB more, but rather using these benefits to present a more complete package to employees—particularly if an employer is moving to a high-deductible health care option.

A study from the National Business Group on Health found that 41% of employers surveyed in 2014 had increased employee cost-sharing. Voluntary products like critical illness, hospital indemnity and accident coverage have risen in popularity as a cost-effective way to offset out-of-pocket medical expenses.

EBN: And what do these trends mean for employees?

SMITH: By providing broader choices that are delivered through technology, employers can educate and inform consumers about benefits that can protect their livelihoods. And the better employees understand their benefits, the more they value them and their employer. A 2013 Harris Interactive poll for Unum found that 55% of employees are satisfied with their employer when they offer voluntary benefits, compared to 32% when those benefits are not offered.

EBN: As medical costs continue to rise, do employees have the wallet-share for voluntary benefits?

SMITH: Consumers struggle to cover out-of-pocket expenses. A study from the Federal Reserve recently found that about 46% of us don’t have enough money to cover a $400 emergency expense.

Voluntary benefits can help with unforeseen cost of injury, illness and loss of life while at the same time coordinating effectively with employer-paid benefits to help fill gaps in medical benefits. The premium for voluntary benefits is generally very affordable, and by purchasing these benefits through the workplace, employees have access to valuable financial protection at much better rates than on the open market.

EBN: What are core VBs you recommend for employees at different stages of their careers?

SMITH: Consumers are looking for choice based on their current life stage, income level, debt situation, and other personal circumstances. Voluntary benefits like disability, critical illness and accident coverage, together with medical coverage, can provide a tailored benefits package that meets their changing needs as a consumer’s career, family, and life stages evolve.

Accident insurance is a popular offering for employees with school-aged children, and critical illness is more popular for middle-aged adults. While we advise employees to purchase whole life insurance earlier in life because of the affordability, part of its appeal is that it pays a benefit after retirement, unlike most term life insurance policies.

EBN: What new services is Unum offering to help make VBs more available?

SMITH: Unum’s technology solutions support all the major enrollment strategies. If an employer doesn’t have a system, we can provide one. Or, if an employer wants to integrate their system with ours, this can easily be done through our new web services integration app. Additionally, our new evidence of insurability app can integrate with employers’ systems and eliminate the need for paper and provide real-time decisions.

All of these technologies are designed to reduce work for plan administrators and allow employees to complete enrollment with confidence.

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Voluntary benefits Disability insurance Critical illness insurance Insurance plan premiums Life insurance