November 30, 2022
Three ways benefits platforms can leverage the growing popularity of voluntary benefits
Executives and decision-makers at benefits-technology (BenTech) companies—HCMs, benefits administration systems, HR platforms, etc.—have a tough job: every few years, new industry trends force these vendors to shift their sales, product, and partnership strategies to align with the latest needs of brokers, employers, and employees.
One trend that has dominated the BenTech ecosystem in recent years: the rise of voluntary benefits. While employers have offered core benefits like medical, dental, and vision insurance to employees for decades, voluntary products are a more recent phenomenon. Voluntary benefits, as a category, includes a broad scope of services, including:
- long-and-short-term disability
- mental health support
- financial-wellness programs
- identity theft protection
- accident insurance
- cancer insurance
- hospital indemnity insurance
- critical illness insurance
- legal services
- pet insurance
- life insurance
These products, for which employees pay at least part of the cost, are increasingly a standard component of competitive, modern benefits packages. In 2021, 55% of voluntary benefits brokers reported higher sales compared to 2020 and 54% reported increased enrollment activity, according to BenefitsPro. Further, LIMRA predicts the nonmedical benefits market will grow 20% over the next few years. And it’s not only that more employers are offering voluntary benefits — employee participation is growing, too.
So what’s a BenTech to do? Platforms that simplify the benefits experience for employers and employees—from choosing benefits products to enrollment and administration—will be best positioned to take advantage of the voluntary trend.
Here are three ways BenTechs can enhance their voluntary experience:
1. Offer the voluntary benefits employees desire. It’s no secret that today’s employees want flexible, personalized benefits packages that supplement core products—medical, dental, and vision insurance—with newer offerings. BenTechs that stay abreast of employee needs and offer the most popular voluntary products will undoubtedly have a leg up on their competition.
And what, exactly, do modern employees want? According to a recent survey by Buck, it’s all about financial wellbeing and supplemental health coverage: hospital indemnity insurance, critical illness insurance, accident insurance, long-term care insurance, and personal loans are among the fastest-growing voluntary benefits. On average, employers offer 12 voluntary benefits, Buck’s survey revealed.
2. Provide decision-support tools for a better enrollment experience. Gone are the days of employees selecting benefits by skimming printed collateral materials. Today’s workers expect an Amazon-like enrollment experience: easy product comparison, tech-enabled assistance at the click of a button, and personalized recommendations based on data and individual needs.
Leading BenTechs have significantly upped their capabilities in recent years, empowering employees to make more informed decisions and better understand voluntary products. PlanSource, for example, offers employees side-by-side plan comparison and helps calculate per-paycheck cost estimates, while its DecisionIQ feature provides personalized recommendations powered by AI and machine learning technology.
3. Focus on operational excellence to make enrollment and administration a breeze. Offer in-demand products? Check. Build an industry-leading, digitally-advanced enrollment experience? Check. But the final step for forward-thinking BenTechs is to make operational greatness and smooth client service core priorities.
A major operational challenge is the transferring of voluntary benefits elections from a BenTech platform to carrier systems, and confirming groups and employees are enrolled accurately. This is an essential task: data errors can cause critical coverage issues for employees, billing problems to be rectified, and, ultimately, reputational harm and client turnover. That’s why many leading BenTechs now leverage APIs to streamline data exchange with carriers. Indeed, according to Guardian, API-enabled benefits administration can save employers up to 200 hours per year and cut down on data errors.
For BenTechs, building a better voluntary benefits experience won’t happen overnight. But there are ways to make serious progress, without using significant development and operational resources. For more information about how Ideon can help, contact us here.