Recently, Selman & Company acquired Vision Financial Corporation, a firm that specializes in employee voluntary benefits administration. We wanted to take the opportunity to dive a little deeper into the term itself, and explore current trends inside this realm of the insurance industry.

A Benefit by Any Other Name

In the United States we know this type of job perk by several different names, such as "employee fringe benefits," "voluntary benefits," or "worksite benefits." At Selman & Company, we call this category of business "Employer Supplemental Benefits," which includes many types of programs. No matter how you call it, they share one thing in common: All of these benefits are designed to drive recruitment and retention goals by helping employees’ salaries stretch further. 

According to a 2016 survey conducted by MassMutual[1], the most commonly-offered employee supplemental benefits are listed below, shown with the percentage of responding businesses that offer that benefit:

• Healthcare (92 percent)
• Dental (73 percent)
• Life insurance (72 percent)
• Vision (60 percent)
• Short-term disability (52 percent)
• Long-term disability (51 percent)
• Accident (32 percent)
• Employee assistance program (21 percent)
• Wellness program (20 percent)
• Critical illness insurance (17 percent)
• Cancer insurance (16 percent)
• Long-term-care insurance (13 percent)

However, employers are beginning to expand their offerings with new, innovative types of benefits that respond to the changing needs of the American workforce. These include retail discount plans, health and wellbeing benefits, telemedicine, flexible spending accounts, identity theft, and telecommuting programs. Some even offer pet insurance!

Current Trends

Employee supplemental benefits requirements are becoming more complex. Look at non-traditional family situations, generational differences in the workforce, gender differences, and wage stagnation that puts financial pressures on working families. As American families change, employers are adapting by creating more flexibility in coverage options, and programs that appeal to different demographics. However, financial stress is a real challenge for almost all workers. Employee Benefit News describes how this trend is being addressed by employers:

“While costs for many consumer goods have decreased, or remained stable, costs for education, child care, and healthcare have soared. Every worker, including millennials, is paying the price. As a result, employers who understand that employee financial stress leads to reduced productivity are embracing financial wellness programs. These programs are expected to proliferate in the coming years and take the form of general financial education, tuition reimbursement programs, debt management, mortgage discounts, and retirement income projection tools, to name a few.”[2]

Also, employees and employers are demanding benefit solutions that encourage DIY planning and online self-service. Once upon a time, voluntary benefits were almost always sold on paper at the employer’s location or via call center. Having only those points of access makes it difficult for employees to exercise choice, enjoy full transparency, and delve into plan details at their leisure.[3] That’s why online access and even mobile phone benefits management will play an increasingly important part in managing employer supplemental benefits in the months to come.

The line between core and expanded benefits has blurred in recent years, too. Radical changes in health insurance plans and regulations have been the primary drivers of this trend, among other factors. For example, employers can round out their offerings by featuring affordable products that cover unexpected illness, accidents, and disability not covered by their high-deductible major medical plan. Case in point: Of the 6,500 employees who enrolled in medical benefits at Amerigas, a propane company, more than a third also chose critical illness or an accident plan.[4] Adding these types of options into the mix (and positioning them in the proper context) provides a means for employees to gain additional peace of mind at a reasonable cost.

Choosing an ESB Partner

The 2016 MassMutual Benefits Advice Study looked at 565 U.S. employers of different sizes, from small firms with fewer than 25 employees to those with 1,000 or more employees. In that study they found:

"Thirty-nine percent of employers without an advisor would find guidance regarding voluntary benefits from an experienced financial professional ‘extremely valuable’ or ‘very valuable,’ and 57 percent would characterize such help as at least “somewhat” or more valuable.”[5]

This seems to indicate that choosing the right broker would make all the difference to an employer. So, when it comes to employer supplemental benefits, how exactly, can the right broker partner provide value?

Information: We know that the trustee of an employer benefits program, who often also heads HR, is inundated with data. She receives a constant stream of market briefings from her broker, analysis from her consultant, and publications from industry sources. What she really wants are advisors who can alert her when she needs to take action or make a decision, while handling what they handle best.[6]

Awareness: Many employers are very worried about how the current administration will maintain or change regulations that affect benefit plans. Staying abreast of relevant changes means keeping up with the Affordable Care Act, US Legislation, news headlines, and attending webcasts. Just when the HR director thought he had his job nailed, he must now add “policy wonk” to his list of aptitudes. Knowledge is power, and partners who can bring it to an employer are worth their weight in gold.

Technology: Partners who have experience with various technology platforms can add value by guiding the employer to the right services, such as benefit exchange platforms that integrate with HR management systems. Some employers are even turning to decision-support tools that help employees select the optimal mix of benefits based on their unique demographic profile. In a 2016 survey of large employers, 67% of them offered such a tool, up from 33% the year before.[7]

Administration: After the trusted partner has educated the employer and guided the team through the complex process of crafting a comprehensive supplemental benefit program, it’s up to both parties to make sure the benefits administration process is both operationally streamlined and easy for employees. That’s where an experienced third-party administrator comes in to handle the necessities of claims, billing, and customer service. Even in the mundane world of benefits administration, expect innovation: At Selman & Company, we offer a unique combined billing service that eliminates more headaches than a pile of Advil.

Great Benefits Attract Great Talent

Attracting the best talent is about more than just salary, and this is routinely borne out by survey after survey. “For the purpose of attracting talent, offering competitive pay and benefits remains critical for employers,” says a recent Harvard Business Review article.[8] It’s particularly important for candidates who are comparing competing offers. That’s why top employers are keen to offer the most popular types of supplements, while also considering the trends that are affecting their employees. Crafting the correct mix of employee supplemental benefits is a task with which your partners—broker and administrator—should assist.

If your organization needs assistance with supplemental benefits and/or the right administrator to power them, we encourage you to contact us at 301-816-0045 ext. 156.

[1] 2016 Health and Voluntary Workplace Benefits Survey. (cover story). (2016). Medical Benefits, 33(21), 1-3

[2] Manning-Hughes, S. G. (2017, February 27). 9 trends driving employee benefits in Q2 and beyond. Retrieved February 28, 2017, from https://www.benefitnews.com/opinion/9-trends-driving-employee-benefits-in-q2-and-beyond

[3] Shutan, B. (2016). Benefits bundling seen as strategic advantage. Employee Benefit News, 30(11), 16.

[4] Shutan, B. (2016). Benefits bundling seen as strategic advantage. Employee Benefit News, 30(11), 16.

[5] 2016 Health and Voluntary Workplace Benefits Survey. (cover story). (2016). Medical Benefits, 33(21), 1-3

[6] Coping with the deluge. (2017). Employee Benefits, 42.

[7] Weiler, R. D. (2017). Making Sense of the Evolving World of Benefits Administration. Benefits Magazine, 54(2), 38-45.

[[8] Chamberlain, A. (2017). What Matters More to Your Workforce than Money. Harvard Business Review Digital Articles, 2-4.