Nearly one-third of eligible employees are signing up for voluntary benefits during enrollment periods, which is a slight uptick from previous years.
According to a study conducted by Eastbridge Consulting Group, the overall average participation rate increased from 21% in 2014 to 28% in 2017. Those rates have been increasing over the last two to three years, according to data from survey participants found in the 2017 “Voluntary Participation Rates Spotlight Report.”
“We were expecting the participation rates to increase over what we saw in 2014 but the increase is probably higher than we might have predicted,” says Ginger Bates, director of research for Eastbridge Consulting Group. “Over half of the carriers reported increased participation rates in the past two to three years.”
The trend of employers shifting more benefit costs to their employees is one reason for the rising demand of voluntary benefits.
“Participating carriers cite this increased demand for voluntary products as well as an increase in employee awareness, better use of data and enhanced online enrollment methods as reasons why participation rates for voluntary will continue to increase over the next one to three years,” Bates says.
Although carriers and advisers predict participation rates will continue to grow, some barriers remain. These include tracking enrollment variables like product, methodology and case size, which limits advisers’ ability to measure success and recommend steps to fine-tune enrollment procedures. Another barrier is a lack of employer engagement and employee access, which tend to stall participation rates, according to Eastbridge.
These barriers usually come down to cost. From an employee’s perspective, there is only so much room in their budget for benefits, so expense is a recurring factor as well as a perceived lack of need for the benefit.
“From a carrier or broker’s perspective, the most limiting factor is the lack of employer engagement which typically leads to a lack of access to the employees. Other obstacles are having enough time with the employees or enrollment capabilities (i.e. not just a self-service method) for the employees to adequately explain the benefits and costs,” Bates says.
Brokers share their go-to supplemental sales partners, including Aflac and Unum, in EBA’s annual VB survey.
The study also found that participants felt that improving participation rates was important and the majority is planning to make changes to improve voluntary participation rates as well as participation measurement capabilities. Key areas of improvement include changes to enrollment design, improving enrollment materials and communications and enhancing enrollment capabilities and partnerships, Bates explains.
“Since the voluntary market continues to grow and expand and since all of the participating carriers agree that improving participation is important — with 70% rating it extremely or very important — the trend to improve participation rates and processes will continue,” she says.
Benefit advisers have a key role in improving employee participation. Voluntary brokers know that good results require a well-planned campaign including pre-enrollment communications and a carefully constructed enrollment, according to Bates.
“Today, most brokers use technology to help with enrollments, but the best ensure that the technology is easy to navigate and helps employees make decisions for their own unique situation,” she says. “The best also make sure employees have access to a benefits adviser to answer any questions.”
