Voluntary benefits: offering more employee-paid choices.

• Author: McKimmie, Kathy
• Position: Employee Benefits - Brief Article

In the face of ever-escalating health-insurance premiums, employers are seeking ways to offer other benefits that are arranged through the workplace but 100 percent paid for by employees. These "voluntary" benefits include some, like short-and long-term disability products, that may have been paid for by the employer in the past but are now available only if the employee picks up the full tab.

Hoosiers are also interested in traditional benefits like dental and vision coverage or buying additional life insurance. Elsewhere in the country, there's been growth in such newer voluntary benefits as pet insurance, prepaid legal services, and car and home insurance, all paid for with a payroll deduction, though for the most part these benefits have yet to catch on in Indiana.

Wanza Schweiger, a certified employee benefits specialist at Indianapolis-based Benefit Consultants, an independent brokerage firm, works with employers frustrated with the cost of health insurance and asking for help in obtaining competitive bids to reduce those costs. Historically, she says, employers set a percentage of the total health-care costs they would pay, commonly 75 percent. "But 75 percent of a $250,000 plan is a lot different that 75 percent of a million-dollar plan. The numbers escalated so quickly that employers are unable to continue."

So, the first thing Schweiger does is "unbundle" the employer's benefits. "The older plans still have employer-paid dental and long-term disability, short-term disability." She separates the basic health benefit, and offers the rest as auxiliary benefits on a voluntary basis, shifting the cost.

This growing trend of "unbundling" benefits can help the employee as well as the employer, says Schweiger. The employer is able to continue to provide a basic medical program, and the employee is not forced to help subsidize all the ancillary benefit areas--formerly part of a comprehensive benefit package--in order to get the medical coverage they want most.

About three-fourths of Schweiger's clients provide voluntary benefit options for their employees. And 90-plus percent of employees choose to buy at least one benefit when offered, she says, the most popular being dental.

At Delta Dental, it's most common for employers to pay at least some of the benefit cost, says Linda Kaufmann, manager of corporate communications, but Delta is seeing an up-tick in the number of companies that want to offer the benefit at the employee's expense...