November 28, 2018
As open enrollment comes to a close, the benefits industry is shifting its focus to planning for 2019. You don’t need a crystal ball to predict that healthcare will continue to be a key concern.
According to a survey conducted by the National Business Group on Health, the average spend on health care per employee will increase by 5 percent next year, from $14,099 to $14,800.
Employers are looking for cost-neutral ways to provide substantial benefits to their employees. Enter voluntary benefits, which can offer high value at a low cost. In 2019, as healthcare costs climb, we may see more employers leverage voluntary benefits to save where they can.
Here are some of the most popular voluntary benefits likely to gain traction in the coming year:
1. Worksite Programs
Worksite programs, such as accident insurance, critical illness insurance, and hospital indemnity, help employees cover the out-of-pockets costs of unexpected medical issues. Since many of these programs are structured to pay benefits in a lump sum on an after-tax basis, proceeds may be used to cover any out-of-pocket expense, including mortgage payments, rent, car payments, food, etc.
The kinds of worksite programs that may appeal to your employees will depend on a number of factors. For example, accident insurance — which provides cash payment if you get hurt as the result of an accident — may appeal to the younger, more active segment of your workers, while critical illness insurance is likely more attractive to older employees.
2. Student Loan Benefits
Student loan debt is at a record high, and delinquency rates are rising. Americans collectively owe $1.48 trillion in student debt — $620 billion more than they owe on credit cards! This financial problem won’t disappear anytime soon, and employees are looking to their workplaces for assistance.
This past August, the IRS ruled that an employer could tie matching 401(k) contributions to an employee’s student loan payment. This may provide the catalyst for more comprehensive legislation concerning student loan debt solutions. Employers that have the budget may want to investigate student loan repayment plans. More companies are starting to offer these programs, and there are many vendors available to help develop plans that meet your organization’s needs and objectives.
If student loan repayment assistance is not an option, employers that want to help employees manage their debt can look to student loan refinancing lenders. These lenders consult with student loan borrowers to evaluate whether refinancing is appropriate and, if so, they can arrange new repayment plans.
Keep in mind that refinancing a federal loan is not appropriate in all cases because certain protections can be lost. If your organization adopts this, make sure to vet potential student loan refinancing partners heavily. You want a partner with a capable consulting approach and counselors who will educate your employees and look out for their best interests.
3. Employee Purchase Programs
Employees’ outstanding personal debts, like student loans and credit cards, may prevent them from making certain necessary purchases. Employee purchase programs can help employees get the things they need without resorting to cash advances or high-interest payday and title loans. Payments are easily managed and deducted from the employee’s payroll over a period of time. This easy, actionable benefit can help young employees establish credit and provides an alternative to taking out loans from a 401(k) plan to make major, but necessary, purchases.
4. Identity Theft Protection
Data breaches and identity fraud are on most of our minds these days. We’ve all heard about the many high-profile hacks in the past few years, and the fraudsters are only getting more sophisticated.
Increasingly, employees expect their employers to support their financial wellness, and one way to do so is to provide identity theft protection. A low-cost identity theft protection program provides employees with peace of mind and expert assistance in the event of a hack. Meanwhile, employers benefit from reduced absenteeism and presenteeism. Should a breach occur, employees can continue to work without the distraction of having to re-establish their identity and credit.
While no one knows for sure what the future may hold, successful benefits professionals will likely continue to evaluate and implement voluntary benefits to help address the needs of diverse populations. As healthcare costs skyrocket, many organizations may begin to look to voluntary benefits for low-cost ways to provide their workers with high-value benefits.
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