Employers have long recognized the value of a solid benefits package in attracting and retaining employees. A well-thought out employee benefits program has a positive correlation to job satisfaction and company loyalty.
But how do you comply with health care reform, control costs, and still maintain a competitive benefits package that employees will appreciate?
WHY IT'S NECESSARY FOR EMPLOYEES
For decades, employees led a pretty charmed life in the benefits arena. Shielded from much of the cost, employees failed to connect low out-of-pocket costs with great benefits. Escalating rates and health care reform forced a reality check on the true cost.
Voluntary benefits help take the sting out of higher deductibles and other out-of-pocket expenses. As employees become better health care consumers, they will learn what core and voluntary benefits best suit their lifestyle. Voluntary benefits promote customization, which provides employees choice - and employees -- like all consumers -- value choice.
bolster financial health
A recent Kaiser Family Foundation study reports one in three Americans have trouble paying their medical bills. Three-quarters of us live paycheck-to-paycheck with little or no savings. The good news is employees with access to voluntary benefits enjoy more financial stability than those without access.
Plans offering voluntary benefits engage employees in their benefits, and encourage them to consider costs and financial protection. With ongoing education and communication, your employees better understand plan coverage and out-of-pocket costs and how voluntary benefits help fill the gaps.
improve Employee satisfaction
We are accustomed to having a choice in products and services. Most employees view limited plan choices unfavorably, particularly if they had more options in the past.
Voluntary benefits restore choice and provide value to employees who personalize custom benefits to satisfy their wants and needs. Being able to choose custom benefits often translates into greater company loyalty.
WHY IT'S NECESSARY FOR EMPLOYERS
Employers are coping with the complexities of the Affordable Care Act (ACA) and many feel that the ACA makes it even more difficult to control the cost of health benefits.
take back control
ACA seems to have put us back on the train to managed care. Integrating voluntary benefits with your core benefits gives back some of that lost control by providing more flexibility in design. The following are a few examples:
- Offering a full flex platform option with benefit credits, with or without an option of a private exchange package.
- The portability of voluntary benefits complement insurance exchange offerings to help transition exiting employees or employees seeking early retirement.
combat unintended consequences
The Cadillac Tax is an example of an ACA provision causing unintended consequences. Although not effective until 2020, the significant 40 percent excise tax on "too-rich" benefits plans requires thoughtful planning. Because employer and employee contributions count toward the threshold that triggers the tax, employers may cut back on or eliminate health flexible spending accounts (125 plan accounts), health savings accounts (HSAs) or health reimbursement accounts (HRAs) to avoid paying the tax.
Voluntary benefits may help counteract this potential move by helping employees cover health expenses. Voluntary medical-type benefits do not count toward the Cadillac tax if your employees pay for them on an after-tax basis.
Enhance service value
New technology and additional services remove much of the administrative hassle of the past.
- Integrated enrollment - Employers may have the option for integrating core and voluntary benefits at little or no cost.
- Benefits booklets - Benefits booklets are often available at little or no cost, which could help employers satisfy PPACA's Summary of Benefits requirement.
- Benefits statements - A third-party endorsement of total compensation communicates the true value of salary and benefits package for employees.
- Benefits communication - Typically, employers have access to an extensive selection of employee education material.
Talk to your HUB employee benefits consultant to learn how voluntary benefits can buffer the uncertainty of health care reform's impact on your business and integrate with your long-term strategic benefits planning process.