Voluntary Benefits More Than ‘Gap Fillers’

By Susan Rupe

Voluntary benefits do more than fill in the gaps left by traditional health insurance. They can be part of a worker’s holistic protection plan.

That was the word from two vice presidents at Prudential Group Insurance who provided a look at the current state of the voluntary benefits marketplace.

Voluntary benefits have evolved beyond the “gap fillers” such as supplemental medical, critical illness coverage, accident insurance and hospital indemnity insurance, said Jessica Vanscavish, vice president, voluntary benefits and distribution.

“The marketplace has evolved and what is interesting is that those products traditionally were not considered part of the employer’s core benefits plan. They were ancillary or kind of off to the side,” she said. “And now they have become much more mainstream. Employers are looking at that as part of their overall benefit strategy in that they understand the relationship that voluntary can play in overall financial wellness.”

With more workers facing higher out-of-pocket medical expenses, voluntary benefits can help cover those unexpected costs, as well as pay for things that are not considered traditional medical expenses, Vanscavish said. For example, she said, a worker who is off the job and undergoing chemotherapy for cancer may need to pay for transportation to and from treatments.

The interplay between voluntary benefits and financial wellness has become significant, said Adam Gelman, vice president and business head of voluntary benefits. Workers are having trouble saving and are feeling financial stress, and voluntary products can boost financial wellness.

“While voluntary products help with medical expenses, employers recognize it’s much more than just medical - it’s overall financial wellness,” he said. “We all know people aren’t saving. In reality, when something happens and you need additional care, you end up tapping your emergency savings. So what we’re seeing is that employees become stressed when something happens, they bring the stress to work. It’s this vicious circle for employees where, when they’re not financially prepared, it shows up in the workplace. And that impacts productivity.”

More employers and benefits brokers are seeing the link between voluntary benefits and financial wellness, Vanscavish said. Carriers are seeing it as well.

“When you see 401(k) leakage and you see the reason why that leakage is happening is because workers aren’t financially secure,” she said. “So if we can help them become financially secure in all the aspects of the financial risks they plan for, it’s a win. The employer wins, the workers win. People retire on time, they leave the workplace financially prepared for what lies ahead.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.