Voluntary benefits are an increasingly important component of a comprehensive benefits program. Given that two out of five employees are seriously considering leaving their organizations, employers are looking for ways to add stickiness to the employment relationship, and voluntary benefits can do just that.
We recently blogged about a Mercer poll in which nearly a third of employers said they plan to redirect some portion of their tax savings to employee rewards. One meaningful way to use tax savings to help employees is by purchasing coverage that protects them from financial risks. With this approach, a small investment could have a big impact for employees when they need help most, and all will benefit from greater peace of mind.
While many employees have access to low-cost group coverages to protect themselves from the financial consequences of a major medical problem or identity theft, those living paycheck to paycheck often times find it difficult to free up dollars to purchase these coverages. Here are a couple of examples of how an employer can help protect their employees from these financial risks:
Identify Theft Coverage
Every year in the US, approximately 15 million Americans have their identities stolen, with financial losses totaling around $16 billion. This means that almost 7 percent of adults experience identity theft and lose approximately $10,666. Identify theft creates both financial stress and emotional stress – leaving an employee distracted and less productive at work as they try and recover from the event.
Employers can help protect their employees and provide services for recovery by purchasing identify theft coverage for their employees and offering an optional buy-up for family members. Identify Theft coverage averages $60 per employee per year for employee only coverage.
Employer-paid Supplemental Health Coverage
Forty-five percent of Americans don’t have enough savings to cover a $500 medical emergency. More than 60% of insured Americans with medical bills will deplete most or all of their savings.
Employers can help protect their employees by providing a base level of supplemental health coverage. One strategy is to purchase employee-only coverage for all employees now, and then offer additional coverage during open enrollment – when employees can add on coverage for family members. The cost for coverage ranges from $60 per employee per year for employee-only accident coverage to $180 per employee per year for employee-only hospital indemnity coverage.
If you’re interested in learning more about the benefits of providing an extra layer of financial protection for your employees, join this SHRM webcast on March 20. My Mercer colleagues Brian Russell and Heather Coughlin will discuss the correlation between employee financial wellness, retention and productivity and how to use benefits to satisfy the needs of a diverse workforce.