Even before COVID-19, an increased focus on employees' physical, financial, and emotional wellbeing was contributing to the expansion of voluntary benefit programs. Employers have been increasingly seeking ways to personalize the employee experience, and their voluntary benefits packages play a significant role in their strategy.
Over the last decade, all players—carriers, employers, and employees—have become more sophisticated in their knowledge and approach to benefits, which has led us into the next generation of voluntary benefits. A number of trends underpin this evolution and will continue to shape the voluntary benefits market in 2020 and beyond.
Trend #1: Whole Case Underwriting
Carriers who offer bundled pricing with group and medical lines can help employers maximize their HR budgets and offer more coverages for incremental increases in cost.
As more carriers enter the voluntary benefits space and employers seek to consolidate their partners, some carriers are offering multi-line discounts. For instance, an organization seeking to renew its group policy for basic life insurance may be able to achieve cost savings by including critical illness, accident coverage, or other voluntary benefits in the underwriting process.
Trend #2: Value-Based Plans
The insurance industry as a whole is seeing a shift to conversations about value, especially as companies and HR leaders use data and analytics to measure return on investment and assess the usage and performance of their plan offerings. These modernized approaches also apply to voluntary benefits.
One simple example that demonstrates the shift is 100% spouse coverage for voluntary benefits, a move away from traditional 50% coverage. This change provides spouses and dependents the same protection against high costs at no additional charge.
Another way employers can be sure their employees get value from the voluntary benefits is through automatic claims notification, and even automatic claims payment (known in the industry as "claims adjudication"). Streamlining the claims process and removing any extra steps for employees helps ensure the benefits are actually used.
Trend #3: Increased Transparency
Across industries, consumer expectations are changing and many want more transparency into costs, processes, and the overall value chain. As such, employers are seeking more claims data transparency, and employees are looking for more decision support to help choose wisely where their benefit dollars are going.
This trend is also helping build new customer care models, such as policyholder care centers and concierge services that help employees work through their benefits. As more carriers enhance their ability to automatically pay claims, they will also need to regularly provide reporting and data that helps policyholders assess performance.
Trend #4: Technology Integration
Data and analytics, increased transparency, and streamlined processes thrive best when carriers and organizations integrate technology and digital solutions into their strategy seamlessly. Bridging third-party systems through application programming interfaces (APIs) can connect HR data, payroll, and benefits information and activity—and help align benefits to employees’ life events and changing needs.
This type of connectivity will enable hyper-personalized communication, which means employees are getting the right message, at the right time, in the way they choose. As the industry develops API standards and connectivity across the benefits ecosystem, employees will benefit from a significantly improved user experience, and HR will have the benefit of improved analytics for decision-making.
Trend #5: Competitive Pricing
As voluntary benefits grow in popularity, new carrier entrants are common, and pricing continues to be driven down by competitive pressure. However, because employers and employees are focusing on value, competitive pricing isn’t just about the dollar figure—but the demonstrated recurring value they get from their investment.
When looking at pricing, employers should focus their product strategies on meeting employee needs based on utilization and value. Less expensive rates may not always be the best solution, especially if the plan design is trending towards insufficient offerings with features that have poor utilization history or provide employees with little value.
Trend #6: Customization Options
Whether new to the workforce or nearing retirement, employees want choices so they can tailor their coverages to fit specific needs for themselves and their families. As the voluntary benefits marketplace matures, even more customization options are becoming available to service an increasingly diverse workforce.
Plan designs are evolving to focus on all dimensions of employee wellbeing in the event of a claim—not just the physical dimension of health, but also financial, emotional, and social. And as data and analytics evolve, it’s likely employees will be able to customize their plans even further.