Offering a competitive benefits package can bring multiple challenges, with increasing costs, changing health care regulations and an increasingly diverse workforce among them. More employers are turning to voluntary benefits as an option to meet those challenges. But which benefit should they offer?

Evaluating the options

The criteria companies use for choosing voluntary benefits need not differ much from the criteria used to decide core benefits and can boil down to three essential questions:

1. What are the employee demographics?

Voluntary benefits and services offerings today tend to be geared toward baby boomers — currently the largest segment of the workforce. However, as they begin to retire in larger numbers across the next decade, expect to see voluntary benefits redesigned for younger generations, who by nature are attracted to more customized benefit packages, according to a 2013 Towers Watson survey. When adding benefits, consider the makeup of the entire workforce — age, education, geographic location, marital status and income.

Percentage of employers surveyed basing their decision on employee demographics: 54 percent

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2. Will the benefit address the majority of our population?

More than 80 percent of companies have adopted voluntary benefits to enrich their current programs at a time when they are reconsidering their financial commitment to traditional benefits. As employers consider how to manage increasing health care costs and rethink overall financial commitments to traditional core benefit programs, most plan to take advantage of voluntary benefits to enrich existing core benefit plans (83 percent) and augment the total rewards package (74 percent).

Percentage of employers surveyed basing their decision on total rewards: 50 percent

3. How will new products fit with current total rewards and wellness strategies?

Voluntary benefits are also added as an option to support larger corporate initiatives such as wellness strategies. Employers are increasingly drawn to programs that not only affect their ability to attract and retain top talent, but improve engagement and promote overall productivity. Voluntary benefits are evolving beyond programs that promote physical health to offerings that also encourage emotional and financial well being.

Percentage of employers surveyed basing their decision on wellness strategy: 44 percent

Once a company has decided on the right benefit, it’s time to choose the right partner.

Regardless of the benefit offered, employers should consider providers who offer a robust product and can implement and administer the plan with minimal impact to their business.

When deciding who to partner with for a benefit, companies should consider:

How flexible is the product?
What service options are available?
How broad is the coverage?
Is it affordable for employees?
How are pre-existing matters addressed?
What options are made available for non-covered matters?
What options do employees have for accessing services?
Can employees take coverage with them if they leave the company?
Can an employee cover dependents?
Are all employees eligible for coverage? Is any coverage available for non-covered groups?

The following questions should also be considered to determine how easy the benefit will be to add and maintain:

What will the company’s role be in ongoing administration?
How seamlessly will the benefit integrate with existing payroll?
Will employees be able to enroll easily?
How much time must be commited to implementation/administration?
Who’s available for client support?
How are complaints handled?
What can employees expect when they call customer service?
What support is available for after-hours emergencies?
What reporting is available?

By answering these questions, employers can determine if the benefit is not only right for their current and prospective employees, but for the administrators and company as well.

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Instant Insights /

3 voluntary benefits questions to help employers find the best fit

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