Deliver Good News With Voluntary Insurance
By: Stephanie Shields (Benefits Pro) May 2016
In today’s environment, expense control is a top focus for companies in light of low inflation rates, low productivity growth, limited pricing power and intense margin pressure. As employee-related costs rise to the top of companies’ financial statements, clients turn to you, the brokers, for solutions to reduce the contributing factors and get more out of the investments they are making.
According to recent research by the Pew Charitable Trusts, household spending in the United States has risen 25 percent or more in the past two decades. In fact, housing, food, transportation and health care costs consume a larger share of families’ budgets now than they did in 1996, while income has, for the most part, remained stagnant. This has left many Americans with less leeway in their budgets to put aside money in savings, especially for emergencies. The 2015 Aflac WorkForces Report found that 52 percent of employees reported having less than $1,000 to pay out-of-pocket expenses associated with an unexpected illness or accident. Yet, that same study showed that nearly half selected a health plan with a deductible of $1,000 or more, up from 34 percent in 2015. And for 60 percent of them, it was their only choice. With higher deductibles, out-of-pocket expenses like copays, little savings and unchanged incomes, many people are finding themselves at greater financial risk than they can afford.
Armed with the insight that employees are often not able to save enough money for unexpected medical bills, brokers can offer voluntary plans as part of the overall benefits package. When positioned appropriately, employees can better understand how adding the right voluntary plans to their coverage is an affordable solution that helps protect their finances from ruin should an unexpected accident or illness occur.
Voluntary insurance is like having a safety net
Voluntary insurance complements major medical plans to help ensure individuals who are sick or hurt have the funds needed to pay health-related costs their major medical insurance might not cover, as well as other daily living expenses. After all, when a medical event occurs, there are deductibles, copayments and treatment costs – not to mention ongoing monthly bills that continue to roll in even if an individual is too ill or injured to return to work. The lump-sum cash benefits are paid directly to workers (in as little as one day) and can be used toward either medical bills or other daily living expenses, such as groceries, gas, child care or house payments.
Voluntary insurance is a win-win for employers and employees
Brokers can educate clients that offering voluntary benefits not only aids their employees, but can also improve their business by:
Not adding any additional costs to the company’s benefits expenses;
Reducing corporate taxes by cutting FICA tax contributions and, most importantly,Helping business owners keep the human capital they need to run their business well.
Employers that provide voluntary benefits options report a reduction in workers’ compensation claims and gain the value of happier and more productive employees. Employees enrolled in voluntary insurance are more likely to be satisfied with their job and benefits package, and they report they’re prepared financially now as well as in the future.
Bottom line
With expenses on the rise for your clients and their employees, it’s important that brokers pivot from employee benefits to financial consulting and protection. Voluntary insurance is a strategy to help your clients and their employees manage increased costs and financial risk in today’s market.
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