Voluntary benefits, such as dental and vision insurance, pet insurance, financial wellness and hospital indemnity plans are growing in popularity with millennial and Generation Z employees. Many factors are contributing to this trend, including employees who want to save money on health care costs, an increase in companies offering high-deductible health benefits and the desire to lead a healthier life, shared by younger employees. Fortunately, there are many voluntary benefit options available today that cater to this market.
Why Are Voluntary Benefits Gaining Traction?
Millennials make up over one-quarter of today’s workforce. Therefore, employers need to create ways to develop group benefits plans that appeal to younger workers, who often have a different set of priorities than other generations. The 2014 Consumer Health Mindset report, released by Aon Hewitt, The Futures Company and the National Business Group, highlighted the increased importance of total wellness to millennials. More than half said that working or living in a healthy environment is influential to their personal health. Employees have been continually educated on the importance of dental care as part of routine health and wellness care. Interestingly enough, the Aon Hewitt report also discovered that 55 percent of millennials are motivated by “looking good” more so than merely for health reasons, therefore a benefits program that includes dental care for a bright, white smile can appeal to this sector of the workforce. In another 2013 survey, 27 percent of U.S. companies said that attracting employees is one of the most important reasons to offer voluntary benefits. Voluntary benefit plans offer flexibility. Additionally, they typically cost less than other types of medical insurance and financial management products, making them budget-friendly alternatives for millennials.
Voluntary benefit plans are no longer viewed as extras. Instead, they’re part of a comprehensive benefits strategy that all employers can use to round out compensation packages. A recent survey reports that voluntary life insurance sales grew by 8 percent in 2015 while supplemental health insurance sales grew by 4 percent. This is the largest increase in this type of benefit in the last five years. The survey also indicates that 71 percent of U.S. employers believe that voluntary benefits boost worker morale and job satisfaction.
The Appeal of Voluntary Benefit Plans for Millennials
Voluntary plans are highly adaptable to the needs of millennials as well as other employees. According to Business Insurance, employers are seeking ways to close the gaps left by other health care plans. For example, current statistics show that 20 percent of private employers who have 10 or more employees offer some kind of critical illness care coverage, a welcome voluntary benefit for those employees facing an unexpected medical crisis.
In addition to reducing risk for younger employees (who may not have the savings to cover medical emergencies), voluntary benefit plans are popular for their ability to address individual health and wellness needs. For example, millennials may opt out of full vision coverage due to the cost, but they may sign up for a voluntary benefit that includes a discount on routine optical services and eyeglasses.
Other specific voluntary benefit plans that appeal to millennials include financial wellness programs that help employees stretch their earnings further. Budgeting software, financial counseling, company-matched savings, student loan payoffs and even short-term financing programs can support employees who need to get a handle on debt.
Voluntary Benefit Plans and Employee Retention
A major advantage of voluntary benefit plans is that they’ve been shown to improve employee retention rates. Employees’ needs evolve as their lives change—they get married, start a family, buy a home, go to college—and voluntary plans can be adapted to their unique needs. Offering a wide range of benefits is a great way for employers to let their employees know that they care about their well-being, whatever their stage of life. And employees who are given a choice of benefits from a broad range of plans are more likely to stay with the same employer.
As an employer, when you choose to offer voluntary and supplemental benefits plans, you’re investing in the well-being of your workforce. Younger generations of workers are mindful of their health and financial futures. By offering voluntary benefits, you’re not just helping your employees achieve their goals; you’re also building a total benefits package that will help you both attract and retain employees. It’s a win-win for everyone.