Voluntary benefits now viewed as essential, Willis Towers Watson survey finds

ARLINGTON, Va., April 10, 2018 -- Long viewed as “something nice to offer,” a growing number of U.S. employers now consider voluntary benefits an integral component of their core employee benefit strategy, according to the 2018 Emerging Trends: Voluntary Benefits and Services Survey by leading global advisory, broking and solutions company Willis Towers Watson (NASDAQ:WLTW). The survey found employers are expanding their menu of voluntary benefits and services to help workers address their overall financial well-being and security. 

“Historically, employers offered voluntary benefits to supplement their core health and retirement benefit coverage,” said Lydia Jilek, director, Voluntary Benefits, Willis Towers Watson. “Now, with an increasingly diverse workforce, employers no longer consider voluntary benefits as simply add-ons, but rather as a way to address a host of employee needs, offer choice and allow employees to personalize their rewards.”

According to the survey, only a handful of respondents (5%) say voluntary benefits will have little importance to their employee value proposition and Total Rewards strategy. Five years ago, 41% of employers said voluntary benefits would have little importance.  Meanwhile, more than two-thirds of employers (69%) believe voluntary benefits will be a very or more important component of their employee value proposition in three to five years, nearly double the percentage (36%) who currently feel this way.

“Voluntary benefits are evolving as they become a more important differentiator for organizations,” said Mary Tavarozzi, managing director, Health and Benefits, Willis Towers Watson. “While employers continue to embrace traditional voluntary benefits, such as life and disability coverage, they are offering benefits more often to help employees and their families with their financial issues. This should come as welcome news to employees, many of whom are seeking help from their employers to address their personal financial issues.”

Education, financial well-being benefits gaining traction

The survey identified education benefits that address rising student loan debts and parents saving for children’s future college cost as important financial well-being benefits that are gaining traction. According to the survey, 8% of employers currently offer student loan consolidation programs, which could increase to 34% by 2021. Similarly, 10% of employers offer student loan refinancing arrangements, which could increase to 35% by 2021. On average, more than half of all respondents offer some form of financial planning and counseling service, which could increase another 10% by 2021.

“Voluntary benefits remain popular among employers and employees, and for good reason.  These benefits are a cost-efficient way to provide additional coverage to employees, and they can help employers attract and retain talented employees, many of whom tend to migrate to employers who offer choice and flexibility. Employees, on the other hand, see great value in voluntary benefits, which they are able to purchase through their employer at a lower group rate compared with on the individual market,” said Jilek. 

Other voluntary benefits expected to attract more employer attention over the next few years include: 

• Identify theft protection: 36% of employers currently offer — could increase to 63% by 2021
  
  
• Pet insurance: 34% of employers currently offer — could increase to 57% by 2021
  
  
• Long-term care insurance: 16% of employers currently offer — could double to 33% by 2021
  
  
• Critical-illness insurance: 43% of employers currently offer — could increase to 71% by 2021
  
  
• Hospital indemnity: 24% of employers currently offer — could more than double to 50% by 2021
  

“The good news is that improvements in enrollment technology are making it easier for employers to expand their voluntary benefit offerings — and the expanded choices are resonating. We’re seeing an increasing number of employees elect voluntary benefit products,” concluded Sherri Bockhorst, managing director, Benefits Delivery and Administration, Willis Towers Watson.

About the survey

The Willis Towers Watson 2018 Emerging Trends: Voluntary Benefits and Services Survey was conducted in November 2017. A total of 336 U.S. employers representing more than 4.3 million employees and a wide range of industries participated in the survey. Eighty percent of the respondents have more than 1,000 employees.

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

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