In an era of health care reform, double-digit rising health carecosts, and plenty of “unknowns,” many employers view their benefitplans as a challenging blend of cost containment strategies andemployee retention.

But perhaps they need to better understand the value of a littlecaped crusader named voluntary benefits.

Employers of all sizes share common goals when it comes to theirbenefits. They seek affordable, and quality benefits for theiremployees.

Some companies achieve these goals by cutting costs and goingwith a high-deductible, self-funded approach. Whilemany associate self-funding with larger employers, in thecurrent marketplace, it has become a viable option for companiesacross the board.

Especially when paired with a voluntary benefits offeringsupported by one-on-one communication or a call center, employersare able to cut costs and offer additional insurance optionstailored to their employees’ needs. But there’s more.

Voluntary enrollments can help employers meet many differentchallenges, all of which tie back to cost-containment, streamlinedprocesses and employee understanding and engagement. But before weexplore solutions, let’s first understand why so many employers aregoing the self-funded route.

For most large and small employers, the costs of providinghealth care to employees and their families are significant andrising.

For companies who may be tight on money and are seeing theirfully-insured premiums increase every year with littlejustification, self-funding serves as a great solution to keeptheir medical expenses down.

Self-funding: An overview

Self-funding allows employers to:

1. Control health plan costs with pre-determined claims fundingamounts to a medical plan account, without paying the profit marginof the insurance company.

2. Protect their plan from catastrophic claims with stop-lossinsurance that helps to pay for claims that exceed the amount setby their self-funded plan.

3. Pay for medical claims the plan actually incurs, not the margina fully insured plan underwrites into their premium, whileprotecting the plan with catastrophic loss coverage when largeexpenses are incurred. Plans may offer to share favorable savingswith their employees through programs like premium holidays. Theseprograms allow employee contributions to be waived for a period oftime selected by the employer to reward employees for lowutilization and adequate funding of their claims accounts andreserves.

4. Take advantage of current and future year plan managementguidance.

5. Save on plan costs by using predictive analysis for health andwellness offered by the third-party administrator (TPA).

Beyond these advantages,self-funded plans may not be subject toall of the Affordable Care Act regulations as fully-insured plans,which is one of the reasons they provide a solution for controllingcosts. Without these requirements, the plans can be tailored muchmore precisely to meet the needs of a specific employee group.

Boosting value: Advantages of adding voluntary benefits to aself-funded plan

Based on an employer’s specific benefit plan, and what itoffers, employers are able to select voluntary benefits that cancomplement the plan and properly meet employees’ needs withoutadding extra costs to the plan.

Employees are then able to customize their own, personal benefitoptions even further based on their unique needs and availablevoluntary benefits.

This provides employees a myriad of benefits while also allowingthem to account for out-of-pocket costs due to high-deductibles orplan changes, as well as provide long-term protection if theproduct is portable.

Voluntary solutions are about more than the products

Aside from the common falsehood that voluntary benefits are onlyabout adding ‘gap fillers’ to your plan, you may be pleasantlysurprised to learn that conducting a voluntary benefits enrollmentcan actually offer a number of services, solutions, and products,many of which may be currently unfamiliar to you.

Finding, and funding, a ben-admin solution

Some carriers offer the added bonus of helping employers installa benefits administration system in return for conducting aone-on-one or mandatory call center voluntary benefitsenrollment.

The right benefits administration systems can help remove manualprocesses and allow HR to do what they do best—focus on employeesand improving employee programs. No more headaches around changingcoverage, change files to carriers, changing payroll-deductions orpremiums.

Finding the benefits administration system that works best foryour situation can make a big difference for your HR team.

Communication and engagement

Many employees are frustrated and scared about how changes tothe insurance landscape will impact them. And with a recent surveynoting that 95 percent of employees need someone to talk to forbenefits information,¹ they clearly are seeking ongoingcommunications and resources.

During the enrollment process, some carriers work withenrollment and communications companies who understand theemployees’ benefit plan options and help guide them to theofferings that are best for them and their families.

At the same time, employers can enhance the communication andengagement efforts on other important corporate initiatives. Forexample, a client of ours increased employee participation in theirhigh-deductible health plan (HDHP) via pre-communication.

Of the 90 percent of employees that went to the enrollment,nearly 70 percent said they were either likely or very likely toselect the HDHP. Just a little bit of communication can go a longway toward employee understanding.

Providing education and engagement about both benefits andworkplace initiatives increases the effectiveness of these programsand contributes to keeping costs down for employers. The moreengagement employers generate, the healthier and better protectedthe employees.

Prioritizing health and wellness

Employers can also use the enrollment time with employees toremind them to get their annual exams. Many voluntary plans offer awellness benefit (e.g. $50 or $100) to incentivize the employee anddependents.

The ROI for an employer’s health plan provides value as regularscreenings can help detect health issues in the beginning stages sothat proper health care management can begin and medical spend canbe minimized.

Employers have also seized the opportunity of a benefitsenrollment to implement a full-scale wellness program at reducedcosts by aligning it with a voluntary benefits enrollment.

An effective wellness program will approach employee health froma whole-person view, recognizing its physical, social, emotional,financial and environmental dimensions. A properly implementedwellness program can ultimately make healthy actions possible formore of an employee population.

A formidable combination

What employers are seeking is simple -- quality benefits and away to lower costs. With that in mind, offering a self-funded planwith complementary voluntary benefit products and solutions allowsemployers to take advantage of multiple opportunities while, at thesame time, providing more options for their employees.

In today’s constantly changing landscape, self-funded planspaired with voluntary benefits is a formidable combination – adynamic insurance duo.