Voluntary benefits becoming more specialized to meet modern workforce needs.Voluntary benefits becoming more specialized to meet modern workforce needs.

Employers are offering a broader range of voluntary products as a way to entice diverse job candidates and retain good workers. Financial counseling, legal services, pet insurance, cancer insurance, long-term care insurance and concierge services like dry cleaning, dog walking and movie tickets are garnering more attention from businesses.

"A growing number of employers and providers are looking to add to their core services by, for example, putting together group legal plans and adding some lifestyle components," says Joe Purisky, president of Voluntary.com, which manages and operates an online resource tool complete with provider and product information, resources and broker listings.

Health-related benefits most popular

Employers increasingly have implemented health and wellness initiatives to help curb health care and disability expenses, reduce absenteeism and presenteeism and improve productivity, and their voluntary offerings are reflecting these efforts as well.

New research from disability giant Unum indicates that the most common benefits being offered are cancer insurance, accident, supplemental medical and short-term disability.

Life insurance and financial services association LIMRA International also finds that cancer insurance is most common, with nearly three out of 10 firms sponsoring these plans on a voluntary basis. Dental insurance continues to generate buzz among firms considering new voluntary options as well.

"As more and more employers offer high deductible health plans, I think employees might feel the need to buy some supplemental medical insurance," comments Carl Mowery, a partner with Smart Business Advisory & Consulting.

Generational differences

Research also indicates employers are attempting to tailor voluntary benefit offerings to a more diverse workforce where gender, age and family status all play a part in selections.

"Employers are trying to match the types of benefits offered to the type of workforce they have," says Garry Sullivan, senior vice president with Aon Consulting.

In a study it published last year, Aon found that baby boomers (ages 45-60) and Generation Xers (ages 25-40) both purchase disability coverage and life insurance more than any other employer-offered voluntary benefit. However, companies ranked long-term care insurance as the third most popular voluntary benefit for baby boomers (11%), while home/auto/liability insurance was third most popular among Generation X workers (14%).

"There has already been a steady rise in the percent of employers offering long-term care insurance, and the need for this insurance will continue to increase," notes Stacy Gray, assistant vice president of marketing and communications for Chattanooga, Tenn.-based Unum.

"Obviously, there are generation-neutral issues which are represented in the popularity of disability coverage and life insurance," says Sullivan. "At the same time, an increasing number of baby boomers have begun caring for their parents, which has prompted many of these workers to purchase long-term care insurance as a voluntary benefit for themselves. Similarly, many Generation Xers are buying their first homes, making homeowners insurance a popular voluntary benefit choice for this group," he says.

Going down market

Not surprisingly, larger companies are more likely to offer voluntary benefits than smaller companies. The percentage of small businesses with less than 100 employees offering voluntary benefits is only 13%, according to Unum.

Shawn Flynn, an assistant scientist in markets research with LIMRA, says brokers need to take the initiative and seek out smaller customers.

"These smaller employers aren't knowledgeable about these programs, nor are they being approached about them," he says.

"Only about a quarter of the employers that really need to know anything about voluntary benefits are being approached by brokers offering benefits. Targeting these companies requires a strong commitment to work with small firms because they are the least likely to have a voluntary plan in place. A crash-course in Worksite Marketing 101 is often necessary for first-time buyers," according to Flynn.

Mid-size employers and service firms posted the strongest penetration rate increases for voluntary products over the past four years, LIMRA finds.

Regardless of employer size or what age group certain voluntary benefits target, Gray says communicating programs effectively is key for employers to increase participation and achieve return on investment.

"A communication strategy is very important. The benefits have to be supported by proper education. While employers are increasingly shifting the responsibility for their employees' health and financial well-being on the employees themselves, many employees appear to be ill-prepared to accept this challenge without assistance," Gray says.