WINDSOR, Conn., Aug. 10, 2011 — Thirty percent of U.S. employers (10 employees or more) said they are considering adding a new voluntary option within the next two years, according to a new LIMRA report: Voluntary Worksite Benefits: Penetration and Market Potential (2011).
"Currently 57 percent of U.S. employers offer voluntary benefits, and this rate rises quickly as employer size increases." said Ron Neyer, Assistant Research Director. "Assuming that most employers that express a likelihood of adding a new voluntary benefit in the next two years follow through, this will provide a new employee-pay-all option to as many as 46 million employees."
The study confirmed that life and cancer insurance remain the most commonly offered voluntary benefits. More than 300,000 businesses offer each product type to their workforce. Voluntary long-term and short-term disability insurance products are also very popular, with more than 20 percent of companies offering these benefits to their employees.
Vision (20 percent) and dental (19 percent) remain the most common voluntary benefits on employer radar. Interest in most products has risen, at least somewhat, from 2006 levels, and is greater at businesses that are not current worksite marketing clients.
Almost one-third of all employers are considering offering new voluntary benefits to replace existing employer-paid and contributory benefits — where the employer pays some or all of the costs. This would potentially affect between 19 million and 45 million employees over the next two years. Half of large firms (1,000 or more employees) show interest in transitioning their existing benefits to voluntary, which is significantly higher than smaller-sized firms.
The two benefits that are most likely to be shifted to voluntary arrangement are medical and prescription drug plans. The compounding health care premium increases over the last several years have forced many firms to re-examine their benefit offerings and shift costs to their employees. Of those employers considering adding a voluntary major medical or prescription benefit, the study revealed that 3 of 4 may be adding the voluntary benefit to replace their existing medical or prescription benefits. Employers appear considerably less likely to similarly replace other benefits.
"The workplace has evolved from a niche distribution channel into a preferred venue for employees to acquire insurance products," noted Neyer. "This is a great opportunity for carriers to take advantage of employers' desire to offer a robust benefit package to their employees while still keeping costs in check."
For more information, please contact LIMRA Public Relations.
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.