Increasing financial pressures on workers — rising healthcare costs, inflation and a higher cost of living — are forcing them to make tough choices. Some are delaying healthcare, others are taking on second jobs and some are even putting off retirement.
As employees look for ways to shore up their finances, where does that leave voluntary benefits?
So far, uptake remains about the same, Melanie Cannon, vice president of worksite voluntary benefits sales and marketing at Amalgamated Life Insurance Co., told HR Dive.
In particular, as employers shift more healthcare costs onto workers, voluntary benefits — things like disability, accident or permanent life insurance — can serve as a safety net, Cannon explained.
“Employers are changing their health plans, and they’re making them either more expensive, or they’re increasing the copays and the deductibles. So folks are looking for voluntary benefits to fill those gaps,” Cannon said.
For example, accident insurance can help workers when they or their families are injured, she said, and is likely so popular because of high-deductible health plans.
Accident insurance provides those insured directly with a cash benefit that can be used at the worker’s discretion to help cover costs incurred around the injury, such as missed work, transportation expenses or child care.
“I believe what’s happening is they’re finding other avenues to cut, as opposed to the voluntary benefits,” Cannon said, noting that many offerings cost a few dollars a week.
Among their clients, many of whom are blue-collar workers, one way workers have cut costs is by canceling their supplemental life insurance policies, she said. Many workers have life insurance policies through their employer and may not see the supplemental insurance as a priority.
It’s important to remember that voluntary benefits are not a replacement for healthcare, Cannon warned.
“If [you]’re going to cut anything, leave your fully insured medical plan alone,” she said.
Yet ADP found that “premium cost is now the top reason employees waive coverage, choose alternate insurance, or do not cover dependents,” according to the results of a recent employee benefits survey.
That report also found a few workers may already be starting to forgo voluntary benefits like vision and dental coverage; 15% of those surveyed said they declined vision or dental insurance to afford medical insurance.
