Voluntary benefits have experienced significant growth in recent years, a trend that brokers and carriers are hoping continues in 2015. Most of the growth in 2014 was driven by health products a category that encompasses products not related to life insurance, such as disability, critical illness, dental, accident, and vision, says Ron Neyer, assistant research director, distribution research, with LIMRA, an insurance and financial services trade association.
Critical illness and accident insurance, in particular, have grown at double-digit rates for the past several years, he says, and so far this year, sales of accident insurance are up 9%.
And while brokers and carriers remain bullish on voluntary, employers, when surveyed, appear reluctant to offer new voluntary benefits, says Neyer. Employers are still clearly focused on complying with the Affordable Care Act, leaving them little time to think about implementing new benefits.
Most are saying health care reform is not making them more likely to offer voluntary benefits, says Neyer. Were a little uncertain if thats a short-term view because theyre in the midst of [ACA-related] changes so theyre putting those decisions on hold, or if thats a long-term view. I suspect its a bit of both, and I think employers will be a little more likely to offer new voluntary plans once the dust settles a bit more.
Indeed, the percentage of companies that agree that voluntary benefits are a significant part of their companys benefit strategy dipped to 50% in 2013, down from 60% in 2012, according to MetLifes 12th Annual U.S. Employee Benefit Trends Study. Plus, the likelihood of companies planning to add more voluntary products in the next two years also declined 12% from 2012.
But even as employees express increased satisfaction with benefits 50% of employees strongly agree they are satisfied with their employers benefits package, up from 38% in 2012, according to the MetLife data they still lack awareness of what various products provide, says Meredith Ryan-Reid, senior vice-president, with MetLifes group, voluntary and worksite business.
Employers, brokers, consultants, employees, over time, are going to want more segmented marketing, she says. You cant give someone 10 choices and be surprised that they disengage from the whole process.
For 2015, that means employers should be asking questions about whether they should be marketing a certain set of products to a particular demographic.
Life event marketing, life cycle marketing are concepts from the consumer world that will move over to the employee benefits world as well, says Ryan-Reid.
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