Commentary: If there’s one word to sum up what will happen with voluntary benefits in 2016, it’s customization. Voluntary benefits have transitioned in recent years from being “something extra” to becoming a mainstay in the employee benefits package. And in 2016, I predict that we are going to see widespread customization of voluntary benefits.

Of course, predicting the future of employee benefits is less about having supernatural powers than it is just paying attention. It isn’t a scientific process and it doesn’t need to be based on known linear data. It’s about knowing the audience, studying existing patterns and factoring in some unknowns that come together to depict the future vision. Forecasting voluntary benefits trends relies heavily on considering the varying wants and needs of employees, along with goals of the employer.  

Benefit managers, benefit brokers, carriers and providers all realize that voluntary benefits have gone mainstream in the last few years. With benefit plans being a key tool in an employer’s recruitment and retention strategy, voluntary benefits have become popular because employees can choose products that complement their company-sponsored core benefits and round out a benefit portfolio that suits their individual needs. Voluntary benefits – both traditional and nontraditional ones – are standard inclusions in employee benefits packages today.

Also see:Easy enrollment, variety of products key ingredients in voluntary benefit programs.”

Even though employees are paying for voluntary benefits, they consider them valuable offerings because they are able to select what they want. Benefit managers are realizing that tailoring voluntary benefits to the diverse needs of their employees is paramount. And many employees have said they are more likely to stay with their current employer primarily due to the voluntary benefits package offered. More thought will be given to which benefits to offer as well as how many to offer.

Customize, customize, customize

Building a benefits package that offers plenty of choice for employees can be challenging. Today’s diverse workforce – spanning three generations from millennials to baby boomers – looks at work, life, money and finances in totally different ways. Matching voluntary benefits to the three generations in the workforce is one way to customize. Looking at nontraditional voluntary benefits by purpose helps employers prioritize. They can be classified as buying and banking options; lifestyle and convenience options; personal care and improvement options; and financial safety nets:

1. Buying and banking benefits give employees alternative ways to save, spend or borrow. They help employees who are underserved by traditional financing options or who want access to services that aren’t generally available to them otherwise. These options include paycards, short-term loans, employee purchase programs, employee discount programs, credit union and flexible spending accounts.

Also see:3 ways financial stress affects your company.”

2. Lifestyle and convenience benefits allow the employee to take advantage of cost savings that they wouldn’t get otherwise because they are getting these benefits from their employer. Plus, by paying for these through payroll deduction, they have the convenience of one less bill to worry about. Among the lifestyle and convenience benefits are childcare, eldercare, pet insurance, auto insurance, adoption assistance, auto insurance, cyber security insurance and legal assistance.

3. When employers offer personal care and improvement benefits, they show that they care about the whole employee while also encouraging them to be proactive about their physical, mental and financial health. Among the personal care and improvement benefits are financial counseling services, wellness programs, employee assistance programs and tuition assistance programs.

4. Financial safety nets offer protection from financial crises that can be potentially devastating for employees. Included in this category are home warranty insurance, homeowner’s insurance, identity theft protection and long-term care insurance.

Also see:6 considerations for employees when shopping for LTC insurance.”

While some of these benefits by purpose would appeal to all three generations, others can be more generation-specific. So based on their employee demographics, employers can decide on offerings.

However, in 2016, carriers, brokers and employers will begin to drill deeper into how employees buy voluntary benefits. Just as the consumer product market studies consumer buying patterns, the noninsurance voluntary benefits industry will look closer at how employees buy benefits. Going beyond the usual demographics of age, sex, income and education levels, now they will look at factors such as lifestyle, housing patterns, and more.

Helping the bottom line

Some customized voluntary benefit options becoming more popular in 2016 can directly help employers’ bottom lines by helping to cure employees’ financial flu and driving them to participate in wellness programs.

Many employees face difficult financial decisions every month. The financial stress they are under, and the time they spend at work worrying about and dealing with their financial situation, impacts their productivity on the job. Focusing on the financial flu with a more holistic approach to wellness by offering financial wellness benefits will improve employee financial stress and, ultimately, productivity. Among the financial wellness voluntary benefits are financial education, financial counseling, employee purchase programs and even loans.

Also see:Financial stress remains, despite improving economy.”

Traditional wellness programs can help the bottom line, but only when employees are engaged. More and more companies will integrate wearable devices into their wellness programs. Wearables are creating an employee engagement factor that is the shot in the arm that many corporate wellness programs needed. A growing number of companies are even helping employees with purchasing one by subsidizing the cost and allowing payroll deduction to cover the cost.

It’s an exciting time for the voluntary benefits industry. It’s been amazing to watch its growth over the last few years. But we likely are only seeing the beginning of what will become an even larger industry segment as employers continue to customize benefits.

Elizabeth Halkos is chief revenue officer at Purchasing Power, a voluntary benefit provider of an employee purchase program. She has over 15 years of experience in client relationship development, sales, marketing and product strategy.

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