Thirty percent of U.S. employers with 10 employees or more say they are considering the idea of adding a new voluntary option within the next two years, according to a LIMRA report titled, Voluntary Worksite Benefits: Penetration and Market Potential (2011).
“Currently 57 percent of U.S. employers offer voluntary benefits, and this rate rises quickly as employer size increases,” says Ron Neyer, LIMRA assistant research director. “Assuming that most employers who express a likelihood of adding a new voluntary benefit in the next two years follow through, this will provide a new employee-pay-all option to as many as 46 million employees.”
The study confirmed that life and cancer insurance remain the most commonly offered voluntary benefits. More than 300,000 businesses offer each product to their workforce. Voluntary long-term and short-term disability income insurance products are also very popular, with more than 20 percent of companies offering them to their employees.
Vision (20 percent) and dental (19 percent) remain the most common voluntary benefits on the employer’s radar. Interest in most products has risen, at least somewhat, from 2006 levels, and is greater at businesses that are not current worksite marketing clients.
Almost one-third of all employers are considering offering new voluntary benefits to replace existing employer-paid and contributory benefits, under which the employer pays some of all of the costs. This would potentially affect between 19 million and 45 million employees over the next two years. Half of large firms, those with 1,000 or more employees, are interested in transitioning their existing benefits to voluntary. This number is significantly higher than it is in smaller-sized firms.
“The workplace has evolved from a niche distribution channel into a preferred venue for employees to acquire insurance products,” notes Neyer. “This is a great opportunity for carriers to take advantage of employers’ desire to offer a robust benefit package to their employees, while still keeping costs in check.”
For more information, contact Catherine Theroux at firstname.lastname@example.org or visit www.limra.com.
By Ayo Mseka