Remember when critics were lashing out at the state of California and Arnold for aggressively pitching Long-Term Care to its residents.
It seems as if many expect state governments to avoid being a marketing channel, even if the product is in the state's own interest.
Some would say the same burden should apply to employers.
Warning - HR Capitalist opinion ahead which many Benefit professionals will not agree with....
Topic - "Voluntary Benefits", defined as benefits in which the employee pays all of the cost, provide employees with options for benefits and insurance coverage they might not otherwise be able to afford. The affordability of such benefits is usually enhanced by the face that employees can often pay for voluntary benefits with pre-tax dollars.
Sounds noble, right? Here's are a few problems that are often overlooked:
-Voluntary benefits usually include benefit classes like supplemental life insurance, long-term care and auto/property insurance that can have wildly variable cost structures based on the provider and the demographics that are insured.
-HR shops don't do RFPs that closely canvas each class of voluntary benefits. They usually are hit by a comprehensive provider like an ADP, which provides a package of voluntary benefits with some high margin products built in. If an HR shop doesn't do a comprehensive provider of the benefits, then they are usually assaulted by the bank, or insurance agent with the most aggressive marketing strategy. In that scenario, HR people are often bad at saying no.
-Everyone, including the employee and the voluntary benefits provider, loves the concept of voluntary benefit costs being automatically deducted from their paycheck. Employees love it for the convenience and the fact they don't have to track it. The providers love it because they don't have to collect money. Once the automatic deduction is in, it's hard to get out.
Put all that together, and it's complicated. Here's the biggest issue I have, and one of the reasons I haven't opened my shop up to voluntary benefits since I arrived at my current company - I feel responsible for the solicitation. If I'm going to open up our employee base to a voluntary benefit, for which the employee is going to pay 100% of the cost, I feel like I am VOUCHING for its quality and value across the marketplace.
And there's no doubt that employees expect you to be looking out for their best interests. So, they take the voluntary coverage, if available, often without shopping.
If I am going to allow an auto insurance product to be marketed to my employees through our normal channels, I feel like I need to say the quality/price combination is the best in the marketplace. And that, my friends, is hard to do.
And that's why I traditionally have said no to the concept of voluntary benefits.
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