Worksite Benefit Boundary Keeps Expanding
The following is an excerpt from an article which appeared in the November 22, 1999 edition of National Underwriter:
Worksite Benefit Boundary Keeps Expanding
By Samuel X. Kaplan
To recruit top-notch talent, retain employees, and differentiate themselves in today's low-unemployment marketplace, employers are expanding the total compensation package to include more innovative worksite benefit designs.
Consider: Larger corporations have, for several years now, provided a full spectrum of worksite benefits: medical, dental, prescription drug, vision, mental health, life insurance, 401(k) plans, stock options and other forms of pension annuities. But more recently, they've added various other benefits, once considered "extras."
These newer offerings include chiropractic benefits, employee assistance programs, alternative care/holistic medicine benefits, behavioral modification programs (e.g., smoking cessation, weight control), disease management, and preventive care/wellness programs. Insurers are marketing many of these with the core package as "value-added" benefits, available for an additional cost.
Long-term care insurance is one of the faster-growing value-added offerings. Typically provided as a voluntary benefit program that costs the employer nothing, it is a "value-added" because it eases the caregiving strain on "sandwich-generation" employees while increasing their productivity. That's important, because caregiver absenteeism represents a loss to employers of $33 billion per year, according to a 1998 study by the Alzheimer's Association. What's more, according to research by the National Alliance for Caregiving, one-fifth of all caregivers gave up work temporarily or permanently during the period studied; 11 percent took early retirement; 6 percent gave up working entirely; and 7 percent changed from full-time to part-time work.
My experience has been, as employers take note of these trends, they become increasingly receptive to expanding their benefits package by adding this no-cost, portable benefit. This is particularly true of public entities and large employer groups.
The stunning rise of 401(k) plans is another example of age-related benefits increasingly being offered at the worksite. It's not just the larger corporations that are interested in 401(k)s anymore. Smaller companies tell me they are interested, too, especially as they become aware of the increasing concern their babyboom employees have about Social Security's long-term viability and their resulting need to do personal retirement planning.
Some insurers have already responded - by taking their bulk employee 401(k) planning product and designing a version for companies with as few as two employees.
Meanwhile, worksite-sold disability insurance, income protection plans, and several forms of annuities are also helping to expand sales in this market. So are legal protection programs, home insurance and auto insurance, though on a smaller scale for now.
Some employers are even offering child support insurance programs for divorced employees suffering from the "dead-beat" dad/mom syndrome! Others are offering medical insurance for pets to help employees cope with the rising costs of veterinary care.
As the range of benefits available through the worksite increases, new opportunities arise for both employers and agents. Producers who have already sold basic packages to employer groups should review the range of "value-added" benefits on the horizon and bring this new information to the attention of their clients.
In doing so, they should point out the growing national realization that the government will not take care of baby boomer's retirement needs, or for all medical needs. Employees, already aware of this, tell me they view worksite insurance products as an easy, reliable way to plan for their own retirement - especially since the employer has done the homework of selecting reputable products and allows payroll deduction (sometimes with employer contribution).
Given that regular and significant salary increases are a distant memory for most people today, agents can help employers see the clear value that worksite products provide in helping attract and retain employees.
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