What voluntary products are most popular?
The challenge for employers is deciding which benefits to offer. Employers should remember two important factors when choosing voluntary products. One, employees are most interested in benefits they see themselves using. Two, an employer doesn’t want to offer benefits that will cost the employee a lot of money.
Disability and life insurance products provide the best benefit for the dollars spent. Because they provide protection against lost wages, long- and short-term disability insurance are popular voluntary benefits. Buying disability insurance coupled with life insurance is more cost effective than purchasing coverage separately. Recently, there has been a renewed interest in permanent life insurance such as universal life. During these uncertain economic times, the security of life insurance makes it a highly sought benefit.
Another voluntary benefit that has been becoming increasingly popular is ‘gap’ insurance. As health insurance continues to increase, many employers are moving toward high deductible plans in an effort to lower costs. This often requires employees to pay the difference between what their health insurance covers and what the services cost. Gap insurance offers a solution to help fill coverage gaps and protect employees against increasing out-of-pocket expenses. Gap insurance pays lump-sum benefits for medical expenses resulting from inpatient hospitalization, outpatient services, diagnostic testing and rehabilitation services. For example, an employee who needs outpatient surgery may be responsible for a $1,000 deductible before the health insurance pays for any services. With gap insurance, the employee would receive a lump-sum payment for outpatient services and could use it to help satisfy the deductible. Gap insurance can be tailored to fit the needs of the employee’s out-of-pocket expenses.
Why have voluntary benefits become so popular in today’s business world?
Voluntary benefits are becoming increasingly popular as business owners struggle with rising health care costs, but want to maintain a competitive employee benefits package. Employers should find a benefits consultant who is knowledgeable about voluntary benefits and knows how to properly research the market. There are several insurance companies offering voluntary products; the benefits consultant must be able to ensure that the employer is offering benefits that employees want and can afford.
Michael Galardini is a sales executive for JRG Advisors, the management company for ChamberChoice. Reach him at (412) 456-7235 or [email protected].
