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This year, January 1 brought us not only a new year but also anew decade. What a difference ten years can make. Unlike the lastdecade, this one comes in with a booming economy and a voluntarybenefits industry with an abundance of offerings that isadvantageous for both employees and employers.

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Building on the growth and diversification of product offeringsover the past ten years, the voluntary benefit industry is poisedfor expansion and increased adoption over the next decade, astalent attraction and retention continue to a top priority foremployers.

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In today's increasingly competitive labor market, benefits are akey driver for employee satisfaction and recruitment. Benefitpackages should include traditional insurance, retirement andnon-traditional benefits, in order to attract and retain employees.Statistics illustrate the importance of benefits. While 41 percentof all workers say they are likely to look for a new job withbetter benefits, that percentage increases for the youngergenerations in the workforce, with 57 percent of millennials and 65percent of Gen Zs reporting the same, according to Unum. That's asignificant indicator for employers and benefit advisors to notewhen considering benefits packages, as nearly 40 percent of today'sworkforce is made up of Millennials and Gen Zs.

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The last decade saw the voluntary benefits industry expand fromessentially insurance-related products to include a variety ofnon-traditional voluntary offerings, driven by employees' desirefor more customized benefits. At the beginning of the decade,voluntary benefits were predominantly insurance-related: gapcoverage, short-term disability, dental, hospital supplemental,cancer and critical care coverage, and vision care. Among the earlynon-traditional benefits were legal insurance, pet insurance andemployee purchase programs. As the decade progressed, otherbenefits came on the scene, such as identity theft protection,student loan benefits, elder care services, foster care assistanceand financial wellness benefits.

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Eastbridge Consulting's 2019 U.S. Voluntary/Worksite SalesReport shows that the traditional voluntary benefits industry hasgrown at a compound annual growth rate of 5 percent over the last10 years. In 2017, Eastbridge reported that two-thirds or more ofemployers providing voluntary products in their benefitspackage were offering three or more traditional voluntary productsto their employees and, among these, about 25 percent offered sixor more. And the trend toward providing more products is even morepronounced, combining both traditional voluntary benefits as wellas non-traditional products, with 30 percent of the employers offering six or more products.

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 Looking to 2020 and beyond, there arefour trends in voluntary benefits that we can count on:

  1. Continued growth

As the previous decade has shown us, health care and lifeinsurance benefits are no longer enough for employees. Many havechosen to add various voluntary products to their employee benefitspackage, mostly at their own expense, in order to have benefitsthat meet their diverse desires and needs.

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With millennials and Gen Zs taking over more of the workforce,and wanting benefits "their way," the voluntary benefits industrywill grow as employers include additional voluntary offerings andas employees choose to add more to their benefit package.

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Providing benefits that appeal to a multigenerational workforcecan be challenging, as employees in different age groups and stagesof life view some offerings as more desirous than others. But withthe ability to improve their benefits strategies by providingvoluntary benefits at no- or low-cost, employers can take advantageof the variety of offerings and beef up their benefits package.

  1. Even more customization

Customization will continue to be paramount and there will benew offerings added to the voluntary benefits portfolio. A study last year showed that "standard" voluntary benefits arepopular, with most employers offering dental and vision (75percent), supplemental life insurance (75 percent) and accidentaldeath and dismemberment insurance (60 percent). But whiletraditional voluntary benefits remain standard offerings, it's thenon-traditional ones that employees are finding most attractive inemployee benefits packages.

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Popular types of voluntary offerings are the work-life balance,lifestyle and financial wellness benefits, so expect more of theseon the horizon.

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We are seeing evidence of this among employers who are addingspecialized, unique employee benefits as well as among benefitproviders who are expanding their offerings. In 2019, Dentons beganoffering breast milk shipping for staffers travelling on business;Starbucks bolstered fertility and included surrogacy benefits; andMassMutual added coverage of gender identity procedures andexpanded fertility benefits. On the carrierside, MetLife recently announced a non-traditional direction forthe company by acquiring pet health insurance administratorPetFirst.

  1. Student loan repayment benefits

There is no question student loan debt repayment benefits willbe added to more companies' benefits packages over the next fewyears. According to the Federal Reserve System, student loan debthas reached an all-time high of $1.6 trillion. It's at acrisis state — that is more than our nation's total credit carddebt.

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While only 8 percent of employers are currently offering thisbenefit, more than one-third of employees (and 55 percentof millennials) say it is a "must-have, according to a MetLifestudy."

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 Student loans aren't just a concernof the recent grad, or even the 20- and 30-somethings who are stillmaking payments on those loans. They are also a concern to the babyboomers who co-signed many of these loans.

  1. Financial wellness benefits will blossom

Financial wellness may be the most critical benefit foremployers to address, not only because it is one that istop-of-mind with employees, but because of the effect employees'financial stress has on the company itself. Employers today realizethat their employees worry about money while at work, which hasconsequences in terms of productivity. Half of employees haveexperienced stress about their finances in the past year and thisnumber is even higher for Gen Z (76 percent) and millennials (62percent).

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Employees' financial stress can lead to distraction at work,absenteeism and high turnover which has an impact on the employer'sbottom line. One in three employees admit to being less productiveat work because of their financial stress, according toMetLife.

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In the years to come, we're going to see more benefits that helpemployees deal with their day-to-day financial health. Offerings that will be morereadily available next year include instant pay benefits, payrolladvances, low-interest installment loans and automated,payroll-deducted savings accounts that help employees livingpaycheck-to-paycheck with unexpected expenses without resorting tohigh cost debt. We'll also see more employers will adopt benefitslike employee purchase programs that help employees purchaseconsumer products and services through payroll deduction when theyare unable or prefer not to use cash or credit, and an expansion ofprogram options like travel and elective medical.

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It's an employee's market today. Employees are looking forbetter pay and better benefits. And in order to attract talent,employers are having to step up the game. The future is bright in2020 and in the next decade for voluntary benefits – both for theemployers who offer them and for the employees who choose them.

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Trey Loughran is chief executive officer atPurchasingPower.

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