In the following discussion, we want to suggest that many employers will add more and more Voluntary Benefits due to what Disney and Microsoft have done.
When one considers legends of marketing, Walt Disney of Disney and Bill Gates of Microsoft may come to mind. We are going to make a bold statement. The impact by those companies on Voluntary Benefits may be more long lasting than the impact the Affordable Care Act has had on Voluntary Benefits.
You might think instead that employers would be consolidating and focusing all their time and attention on the ACA and their high medical premiums, and that they might cut back on all benefits, including Voluntary benefits. But look instead at what the industry pioneers like Disney and Microsoft are doing.
We predict two things will force employers to add Voluntary Benefits:
- The Cadillac Tax will drive employers to cut back and reduce the base cost of their medical premiums. Employers in 2020 will pay a 40 percent tax if their health insurance premiums are too high.
- High medical inflation (6.8 percent in 2015 versus the 1.4 percent Consumer Price Index non-medical inflation in 2015) will cause employers to go from paying whatever premiums are, to a more Defined Contribution approach to medical premiums.
So when employers cut back their medical coverage and fix the amount they will pay as the Employer portion of medical premiums, they may create very upset and confused employees. There is a saying in our industry that "no news is good news" when it comes to benefits. As soon as you announce a change to the benefits plans, employees automatically think it must be bad.
What should an employer do right now and announce in 2016?
Employers should fix their employer contribution for 2017 now and let employees know now that it's a fixed contribution. And then add much-needed and wanted Voluntary Benefits which employees can pay for IF and when they so desire. And, in some instances, the employer could even help pay for some of these Voluntary Benefits.
Which benefits should be evaluated, negotiated, and even added?
The list below is what many brokers and carriers are trying to promote right now as Voluntary Benefits:
- Voluntary wellness
- Long term care for employees and spouses
- Better dental (which can also have a Defined Contribution by the employer)
- Better vision, Hearing, and Life options
- Discount online Shopping and cash back savings.
- Payroll deduction loans for emergencies, consumer goods, electronics, and to re-finance outstanding student loans by employees.
- Identity theft and pre-paid Legal Services
- Pet Insurance
So how do you know if items one through nine are what your employees want and need? Ask them and give them a Survey where they can vote on what they want and need. You might be surprised by the survey results. In fact, many employees are focusing on just getting by from paycheck to paycheck. So the Voluntary Benefits they like must be very important to them.
Yet there is one Voluntary Benefit not listed on items one through nine above. Yet survey after survey shows that employees value, need, and want this benefit. But first let us ask you two important questions: Can you trust your employees to make a correct decision about this? Will they hold you responsible if they buy a Voluntary Benefit and do not use/enjoy the benefit?
Let me share what I have hopefully learned in my 35 years of experience in Benefits beginning at IBM Corporate HQ. In 1981, I recall that one of the Core Principles at IBM was: "Respect for the Individual."
To me that meant that every employee could have an opinion, could share his ideas, and could bring value.
But IBM Corporate Management all had concerns when discussing the new proposed 401k and Section 125 Health Spending Accounts. Could employees decide and were smart enough to make individual decisions where they could lose their money due to bad 401k investment choices or due to "use it or lose it" with Section 125?
I recall several consultants and HR professionals told us that we had to "protect" our employees from themselves. They told us to wait to implement such plans. That our employees would make bad decisions and then be angry and upset. I will never forget what happened. Someone I really admired who was the head of HR/Benefits for IBM stood up.
Bob Beck calmly and quieted stated: "What is the true principle we continually stress at IBM? Is it not respect for the individual? Don't we trust the judgement and decisions by every IBM employee to decide to work for us; to decide to get married, get divorced, to have children and to purchase a home? So shouldn't we trust that our employees can make a good decision about their benefits?"
As a result of trust in and respect for the individual; IBM implemented these plans and also saved millions of dollars in tax savings immediately in 1981 and by not waiting. If they had waited until employees were suddenly better educated, and could make "better" decisions; IBM might still be waiting.
So what have we learned from my IBM experience? We need to respect your employee's needs and wants. What did Disney and Microsoft learn from their employees? The single most requested Voluntary Benefit is to add internet, phone, cable, Home security/automation, Movies, and TV programming together into one package of services. We call it "Connect your Home".
And employees in surveys state that this truly does "Connect their Benefits". Why are employees so enthusiastic about the idea of their employer helping them bundle their home services and save money in the process? You'd be hard-pressed to find an employee who isn't a cable or satellite TV subscriber, or who isn't paying monthly for internet service at home - especially as the influx of millennials into the nationwide workforce accelerates every day.
These home services have become nearly indispensable to people's daily lives (even the thought of living without a home internet connection for a few days can induce minor panic in many households). But as much as people love using these services, they dislike paying for them. The monthly costs often comprise a significant portion of employees' personal budgets, and service costs continue to trend higher over time.
If, as an employer, you were to tell employees you could help them cut their monthly bills on these home services, chances are good your employees would respond positively. Employees like to see that their employers care about them outside of the workplace, and are taking steps to enrich or enable their lives at home.
One company, Connect Your Benefits, is offering a solution that meets the increasing employee demand for assistance with affording home services. Their Home Service Discount Program (HSDP) enables organizations including employers, associations, PEOs, TPAs, and brokers to offer exclusive home services discounts to employees, members, or customers. Key services include the following:
- Home phone
- Home security
- Home automation
- Solar energy
Employees or their members/employees gain access to exclusive offers including:
- Rebates for purchasing services from certain home services providers
- The latest promotional discounts
- Free or discounted equipment from certain providers
- Lowest nationally advertised prices on all brands
Such Programs address many of the "pain points" for organizations' decision-makers who are constantly seeking innovative, cost-effective ways to please employees. When evaluating potential Voluntary Benefits to ensure they promote employee recruitment and retention, these HR professionals or benefits coordinators must pass them through several filters:
- The benefit must be cost-effective for the organization.
- The benefit must appeal to and be useful for as many people as possible.
- The benefit should not require much maintenance from the organization.
To fulfill the above criteria, Connect Your Benefits has built a simple, scalable Voluntary benefit platform for organizations of all sizes. The HSDP costs nothing for organizations to offer to employees, and it requires no maintenance by organizations following enrollment.
Connect Your Benefits supplies program participants with customized landing pages and the design of tailored marketing collateral that organizations can supply to their employees or members through onboarding materials, internal communications or employee portals. Employees can enroll in the HSDP year-round and access the home services discounts via their employer's company-specific microsite hosted by Connect Your Home.
It's this all-inclusive approach, combined with providing a Voluntary benefit with near-universal appeal which stands out for organizations trying to satisfy the wants of employee populations ranging from hundreds to hundreds of thousands.
To date, Connect Your Benefits has actively partnered with more than 800 organizations nationwide (including the previously mentioned Disney and Microsoft) through its discount programs and affiliates.
These organizations recognize that employees are enthusiastic about the immediate gratification of affordably bundling their home services, and the long-term reward of lower monthly bills that allow their paychecks to stretch just a little longer.
Although Voluntary benefits such as identity protection or telemedicine have their place and are often included in benefits packages, employers or prospective employees may overlook them because in many cases, those services are used very infrequently.
Discounts on home services and promotions, however, are more likely to garner employee attention because they are used daily across the entire employee population - people young and old, people of all varied income levels, and people with highly diverse lifestyles.
As time goes on, current trends indicate that employers will gravitate toward programs such as Connect Your Benefits and help employees do more or save more in their personal lives outside of work. And employers that are ahead of this trend are more likely to have an easier time retaining employees or attracting new ones.
Soon employees will be making the majority of all decisions about their benefits; including Voluntary Benefits. Eastbridge Consulting did a study and concluded:" Employee-consumers will still receive the majority of their benefits through their employer, but "the majority of decision making will shift from employer to employee, [including] allocating the dollars contributed by their employer as well as their own contributions, selecting the types and amounts of products and manufacturers."
In addition, "the old concepts of 'group,' 'individual' and 'voluntary' [insurance products] , according to Eastbridge, will no longer have meaning by 2020. Rather, products will be seen "as one business and sold by the same intermediaries and on single platforms."
Take a hard look at fixing your employer contribution amounts for 2017. Evaluate and implement Voluntary Benefits and trust and respect your employees and find out which Voluntary benefits they want and need and if indeed it is a Voluntary benefit that truly "connects your home."
Just some additional "food for thought" if your broker, consultant, or administrator have not told you about these Voluntary benefits and issues; ask them why. If they make excuses; then you need to consider working with someone else.
About the Authors
Matt Gabrielson, Synergizer for Connect Your Home. www.ConnectYourBenefits.com www.ConnectYourHome.com. Matt has been an innovator of technology-based solutions for over twenty years. He empowers clients with easy-to-use and valuable tool sets that build downline value.
Mr. Gabrielson has been a speaker to various home services companies including DIRECTV and DISH Network, and works tirelessly on his passion to enhance the hospital experience for children with severe illnesses through his work at Ronald McDonald House. He can be reached at 720-399-4995 or firstname.lastname@example.org.
Rob J. Thurston, President of the HR Consulting Group, has been a national speaker and noted author on HR consulting and systems development since 1981. He has implemented and designed some of the largest selling employee benefits software systems nationwide while part of an international brokerage firm, a national administration firm and while as a consultant.
Currently, he is working on the development of several advanced technology systems for both HR and for employee benefits. He has available at no cost or obligation a comprehensive listing of software and consulting firms providing advanced technology systems for benefits enrollment, communication and administration. Please request this list by calling Mr. Thurston at (801) 765-4417, email: email@example.com, website: www.hrconsultinggroup.com or writing: HRCG, Inc., 1202 E. Dover, Suite 201, Provo, UT 84604.