As employers increasingly cost-shift benefits, an inevitable consequence is employees wanting a larger say in how their benefit dollars are spent - making tailored and personalized benefit packages another step in the evolution of the consumer-driven paradigm.
"Once you get into the situation where employees now are all of a sudden consumers and [they]'re bearing a fair amount of the cost, with that comes a desire to be able to make a decision," says Mike Fish, vice president of voluntary benefits with The Hartford.
In a December 2012 survey of nearly 1,500 U.S. workers by TNS Omnibus, 86% say it is important to be able to customize all of their benefits to fit their individual lifestyle. Seventy-six percent of those surveyed by TNS Omnibus say it's important for them to design their own disability insurance instead of one-size-fits-all coverage chosen by an employer, and 82% would likely sign up for a disability plan that allows them the chance to choose the size of their payments.
Women and younger workers were particularly likely to favor customizable benefits. Only half of men, but 56% of women, agree that it is extremely or very important to be able to customize benefit choices to fit their lifestyle. Americans in their 40s are more likely to value the option than older workers, and millenials are more likely than any older group to say personalization is important.
"Consumers today can customize everything - from music and TV to clothing and cars, and our recent survey shows they want to customize their benefits, too," Fish says.
To that end, the carrier's new DisabilityFlex product aims to allow employees to create their own income protection with choices on:
* Benefit amount - how much they receive weekly, from $200 to $1,000.
* Start date - how quickly payments begin, from eight to 30 days after the non-work-related injury or illness that is covered by the plan.
* Duration - how long payments run, up to 104 weeks.
DisabilityFlex is fully employee-paid and currently is available to companies with 50 to 999 people. The Hartford says it will offer the coverage to companies with 1,000 or more employees starting in May.
Combining control with communication
However, with greater power comes greater responsibility, and Fish cautions that increased benefits customization can be dangerous for an uninformed workforce.
"I think one of the big movements in voluntary is the lack of understanding on the side of employees and consumers, and it works in both directions for the young and old," he says. "For older employees - who may not have had to make [such detailed descisions] in the past - that's something where we have to make sure that they're well-informed. And for younger people coming into the workforce, they get a new job ... but then a very important decision has to be made right up front with that 30-day enrollment period to elect their benefits. Most consumers understand, I think, the notion of health insurance. But disability insurance, life insurance - they are further removed from being able to make an informed decision [about those things]."
Thus, employers need to step up education efforts with every new offering, Fish says, allowing participants to customize their benefits while helping them understand how the overall benefits strategy aligns with company goals. If a plan is meant to increase awareness or to reduce absenteeism, he notes, tell workers that and let them modify their coverage to what they think will help them meet that need.
Still, offering too many choices can be risky as well. "One of the things that keeps me up at night ... is not overwhelming employees with too many choices," Fish says.
