Voluntary benefits (where the employee pays 100% of the benefit premium) have been popular in the United States for many years. LIMRA research shows that these benefits, along with non-insurance benefits, are starting to gain traction in Canada.
On average, 14% of employers in Canada now offer insurance benefits on a voluntary basis. Canadian employers continue to feel the pressure of benefit costs. Almost a third of employers say it is increasingly difficult for their company to afford to pay for employee benefits. For many employers, offering insurance benefits on a voluntary basis is the only way to expand their benefits portfolio while containing overall employee benefits costs.
Unlike the U.S., Canada has a universal health care system, which creates a different workplace benefits marketplace for carriers and employers than in the U.S. This presents both challenges and opportunities in meeting the benefit needs of Canadian employees.
Less than 1 in 10 Canadian employers that currently offer employee benefits plan to add a benefit in the near future. The most common benefits that employers are considering adding are vision care and critical illness.
When it comes to non-insurance benefits, 9 in 10 Canadian employers with benefits offer at least one non-insurance benefit as well. Offering these popular benefits help ‘round out’ an employer’s benefits package in a cost-effective way. On average, employers offer three non-insurance benefits with larger employers tending to offer a wider variety. Some non-insurance benefits have a distinctively larger footprint among employers than others do (see chart).
Going forward, Canadian employers will need to expand their thinking about the benefits they offer their workers. The workforce continues to grow in diversity and with four generations represented, there is a need to go beyond traditional options and explore innovative products and services to meet the various needs and life stages of the workforce. As employer and employee needs change, the industry will need to identify new benefits that address these changing workforce dynamics. Voluntary benefits and non-insurance benefits can be part of the solution.