Open Enrollment In 2023 & 2024: What You Need To Know About Voluntary Benefits
Open enrollment season is a fantastic opportunity for HR teams and employers to see if their benefits packages still work for their employees. As an HR professional, you can review benefit offerings by researching the latest trends, gathering feedback from employees, and much more.
Although this can be a wonderful chance to gain insight into workers’ needs, we know it can be a stressful one for HR staff. Voluntary benefits can alleviate some of the concerns HR professionals face around creating suitable benefits packages.
Current Trends In Open Enrollment
As you plan your open enrollment, it is a good time to look into the changes in the field within the past year. What new benefits have become popular among peer organizations? What benefit trends can you pick up and translate to your offering?
For example, a major trend in employee health coverage has seen a move from high-deductible packages to more limited health plan selections. With this comes the need for more voluntary benefits such as supplemental health insurance policies (eg. accident insurance, critical illness, and hospital indemnity insurance). These have low monthly premiums but provide a cash payout should the employee become hospitalized or diagnosed with a critical illness.
Research shows that more employees are opting for these voluntary benefits. Participation in critical illness insurance rose from 16% to 27% between 2021 and 2022. Accident insurance saw an increase of 10% and there was a 6% increase in participation for hospital indemnity insurance.
Other Open Enrollment Trends
Increased use of digital decision tools. This includes support tools like online plan comparison and price calculators. These can help employees make clear and confident decisions on their benefits.
Employee well-being, wellness, and mental health were placed in the spotlight during the Coronavirus pandemic. Benefits can include telemedicine, counseling or therapy, yoga sessions, etc. You can also prioritize travel and entertainment packages including discounts and product offers, giving employees experiences they desire.
More transparency on co-responsibility and disclosures on hidden costs. This trend notes a drive for more transparent information around healthcare and insurance costs. Individuals want to understand their responsibilities in copayment, cost-sharing, and other deductibles from the get-go so that they can make informed choices.
Of all these trends, the one making a significant impact for both employees and HR professionals is voluntary benefits.
According to HRDive, 94% of companies now place voluntary benefits within their value propositions. This is because, among other reasons, these voluntary options provide flexibility in the benefits package system, ensuring that all employees get the best out of their choices and giving them a greater selection.
What Are Voluntary Benefits?
Voluntary benefits are employment benefits that workers can select as a surplus to the primary packages offered by their company. They are like added bonuses that employees can tailor to their lifestyle in addition to the more basic combos that organizations pre-pack.
Voluntary benefit choices can include
- Dental insurance
- Vision coverage
- Supplementary health options
- 401(k) plan
- Life cover
- Gym plans
- Financial planning
- Legal support
- Remote work benefits like device maintenance and acquisition, electricity costs, overhead costs, office rent, and more.
The Misconceptions Around Offering Voluntary Benefits
There are many myths about the difficulties and challenges of including voluntary benefits in your open enrollment system. These are the main two that often become a point of contention between employers or HR professionals and workers during open enrollment:
A Higher Salary Vs Benefits
Employers often make the mistake of thinking that employees would prefer earning a greater salary over voluntary benefits. While income is a notable contributor to employee satisfaction, it does not always correlate to well-being and contentment in your team. Employees also may not be able to afford all they need to live well with the salary provided.
Voluntary benefits can illustrate to your employees that upper management considers what they need for balanced living. They can become a reflection of consideration and flexibility in your company culture. Most importantly, they can bridge the gaps between worker salaries and the products and services they cannot afford consistently on their own.
401(k) Packages Are A Must For Retirement
401(k) plans have become a staple benefit in open enrollment packages. However, do they truly encourage saving or retirement and can people afford them?
For people with disposable income, 401(k) packages can work as they have excess money to put away. They can afford to. However, with “35% of Americans [reporting] that they’re in the most debt of their lives”, not everyone has this luxury.
Offering voluntary benefits means workers have a wider selection of options to choose from that actually fit what they need. Of course, saving for retirement is important, however, it can be redundant if workers find themselves in debt in the course of savings. You can instead introduce other financial education and management services like debt management to assist employees in the now.
The True Value Of Voluntary Benefits For Your Open Enrollment Program
Times are constantly changing and that is where the core advantage of voluntary benefits exists. They are flexible and adaptable, and allow for employee personalization. In the past, benefits packages just assumed worker needs without considering the shifting economic, political, and social climates. Voluntary benefits have become popular because they give employees the power to meet the world as it stands.
For example, the COVID-19 pandemic saw a need and rise in benefits covering large hospital costs. It also saw a hike in insurance and indemnity plans that protect workers from income loss. 47% of big employers now have one or more of the primary income-protecting voluntary options – critical illness insurance, hospital indemnity cover, and accident insurance.
Another increasingly popular benefit that grew with the pandemic is telemedicine both for physical and mental health.
So, there is evident value in giving employees the agency to select the benefits that can support them better. Furthermore, BusinessWire says 83% of HR professionals see voluntary benefits as a way of improving employee retention and 72% believe it assists with employee engagement and talent attraction.
The Bottom Line
Voluntary benefits are a surefire way to boost employee satisfaction and decrease turnover if you utilize them as a positive HR tool. Make sure you incorporate them during open enrollment season to give your employees the benefits they truly need.
At EBG Solutions, we do the work of learning about trending benefits and designing packages that employees will enjoy. We conduct a detailed market review to provide updated and world-class voluntary benefit plans including for critical illness, hospital fees, accidents, auto, home, and pets, and more.
Collaborate with EBG Solutions today to update your open enrollment program with the best voluntary benefits from the largest selection in the world!
- SHRM: Employees Want Voluntary Benefits but Don’t Always Understand Them. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employees-want-voluntary-benefits-but-dont-always-understand-them.aspx
- HRDrive: Voluntary benefits on the rise, Willis Towers Watson finds. https://www.hrdive.com/news/voluntary-benefits-on-the-rise-willis-towers-watson-finds/601310/
- Money.com: Here’s How Much Debt the Average American Has in 2023. https://money.com/average-american-personal-debt-amount/
- SHRM: Pandemic Highlighted Value of Voluntary Benefits. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/pandemic-highlighted-value-of-voluntary-benefits.aspx
- SHRM: Open Enrollment: Voluntary Benefits Emphasize Choice. https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/open-enrollment-voluntary-benefits.aspx
- Business Wire: Survey: 3 in 4 Employees Consider Voluntary Benefits as a Deciding Factor for Whether They Work for and Stay with an Employer. https://www.businesswire.com/news/home/20210920005321/en/Survey-3-in-4-Employees-Consider-Voluntary-Benefits-as-a-Deciding-Factor-for-Whether-They-Work-for-and-Stay-with-an-Employer