Study Finds Increased Interest in Voluntary Benefits
August 11, 2011 (PLANSPONSOR.com) – Thirty percent of U.S. employers (10 employees or more) said they are considering adding a new voluntary benefit option within the next two years, according to a new LIMRA report.
Voluntary Worksite Benefits: Penetration and Market Potential (2011) indicates almost one-third of all employers are considering offering new voluntary benefits to replace existing employer-paid and contributory benefits – where the employer pays some of all of the costs. Half of large firms (1,000 or more employees) show interest in transitioning their existing benefits to voluntary, which is significantly higher than smaller-sized firms.
The two benefits that are most likely to be shifted to voluntary arrangement are medical and prescription drug plans. Of those employers considering adding a voluntary major medical or prescription benefit, the study revealed that three of four may be adding the voluntary benefit to replace their existing medical or prescription benefits. Employers appear considerably less likely to similarly replace other benefits.
The study confirmed that life and cancer insurance remain the most commonly offered voluntary benefits. More than 300,000 businesses offer each product type to their workforce. Voluntary long-term and short-term disability insurance products are also very popular, with more than 20% of companies offering these benefits to their employees.
Vision (20%) and dental (19%) remain the most common voluntary benefits on employer radar. Interest in most products has risen, at least somewhat, from 2006 levels, and is greater at businesses that are not current worksite marketing clients.