We seldom think much about voluntary plans. They don’t cost the company any money and they provide benefits to employees. Some programs have no pre-existing conditions which can allow those employees that would not normally be able to purchase certain coverages to do so. Having said that, how can those programs possibly be adverse to your employees?
Let’s start with how the programs are selected and who conducts the enrollment. A lot of times, we just let anyone with a good pitch, come into our business and sell their products. Other times we allow friends or friends of employees to bring their program to our company. How do they make their money? They make it by how much business they sell to your employees. There are usually huge commissions for the first year followed by lesser commissions in subsequent years.
So what is the problem? We recently were brought in to manage a 400 employee organization’s voluntary programs. They had approximately 17 different programs. Here is what we found:
1.) Of the seventeen different programs, less than 20 people were enrolled in all but 4. The number of options created a real mess when it came to with-holding money to pay for those programs.
2.) Under one of the voluntary disability programs, 25 people were paying for coverage they could not receive because they were covered under a state plan offered by the organization.
3.) A large number of employees were double and triple covered in a number of areas without them knowing or understanding what coverages they had purchased. Note: After we were able to simplify the programs to prevent double and triple coverages, employees saved from $25 to $150 per paycheck.
4.) Original programs were put into place without looking at how competitive they were in terms of cost and providing benefits. In a lot of cases, companies that advertised the most were the most expensive with a far higher cost than other companies with the same or better benefits and equal service. Bringing in quality programs with great service and lower costs also puts money in the pocket of your employees.
By managing voluntary benefits, you can improve your overall products, prevent double or triple coverage, make sure employees are eligible for the products they purchase and most of all put money in your employee’s pocket. Consultations concerning how we do this and how you may also get free technology is available upon request.
