Voluntary Benefits Play Key Role in Workplace of the Future

COLUMBIA, S.C., Oct. 5 /PRNewswire/ -- American workers who are looking at their benefit needs five years into the future say many voluntary benefits will be important to them — but their employers may not be hearing the message.

That's one of the findings in a new white paper released by Colonial Life & Accident Insurance Company. "Workplace Forecast: Perspectives on Benefits in the Next Five Years" compares surveys of employees, human resources professionals and insurance brokers about what they expect to see in the workplace benefits landscape over the next five years. The three groups answered questions about what types of coverage workers will want and have access to, events that will influence changes in benefits needs, and changes in how benefits may be delivered at work.

A recent online survey commissioned by Colonial Life and conducted by Harris Interactive® shows 82 percent of full-time employees currently enrolled in life, health or disability benefits through their or their spouse's employer think life insurance will be important, very important or extremely important five years from now.(1) Large majorities say the same for disability insurance (77 percent), critical illness insurance (76 percent), accident insurance (75 percent) and cancer insurance (61 percent).  Employers who were asked a similar question in another recent survey conducted by a national publication agreed employees would find life and disability insurance important, but misjudged the level of interest in other types of voluntary coverage.(2) Those rating critical illness, accident and cancer insurance as important or very important to employees ranged from just 44 percent to 54 percent.

"Employees clearly see the need for many types of insurance protection, especially as they get older," says Colonial Life president and CEO Randy Horn. "Employers can meet these needs — without increasing costs to the company — by offering additional voluntary benefits at the worksite."

Concern about access to benefits, benefits education gap revealed

Results from the Harris Interactive survey show a growing number of workers currently enrolled in benefits are worried about having continued access to benefits at work. Concern that employers will stop offering certain benefits grew from 34 percent who are currently concerned to 48 percent who expect this to be a concern five years from now.

The white paper also revealed a lack of knowledge and understanding about the role of benefits in providing a financial safety net. Nearly all HR managers (95 percent) and brokers (90 percent) agree employees will rely somewhat or very much on their workplace benefits to protect their financial futures, but only half of employees understand the connection between insurance protection and financial security. According to the Harris Interactive survey, 50 percent of those currently enrolled in benefits said their benefits would help strengthen their financial security five years from now at least a moderate amount, but nearly a fourth (23 percent) said their benefits will not strengthen their financial security at all.

"As more of the responsibility for decision-making and paying for benefits shifts to employees, education about their coverage, needs and options will be more important than ever," Horn says. "Benefits providers can help by providing year-round communication and engagement programs to help employees better understand their role in the benefits process and the importance of workplace benefits in their overall financial protection."

Rising costs continue to be top of mind

Managing costs is an area where employers and their employees find common ground. When asked about their top concerns, employers who were surveyed rated the increased cost of premiums highest, closely followed by higher deductibles. Employees currently enrolled in benefits also rated increased premiums and higher deductibles or co-pays (60 percent) as their top concerns, with their level of concern growing as they look five years ahead (65 percent).

Other key findings reported in the white paper include:

• Workers see a large gap between protection they think they'll need and what they have now. Eighty-two percent of those currently enrolled in benefits said life insurance will be important, very important or extremely important to them five years from now. However, only 61 percent of full-time workers currently have life insurance through their or their spouse's employer. For disability insurance, the disparity was even stronger: 77 percent of those currently enrolled in benefits say it'll be important, very important or extremely important to them five years from now, but only 42 percent of those employed full time currently have this coverage through the workplace.

• Health problems will weigh heavily on employees' benefits decisions. Of those who plan to be employed five years from now, 48 percent think health problems will influence their insurance benefits decisions at that time.

• Baby boomer retirement and health care reform will most influence benefits decisions for employers and insurance brokers. HR managers rate health care reform as the most important event; it's a strong second for brokers, who see the coming mass exodus of baby boomers as the biggest driver.

• Employees are more optimistic than their employers or brokers about the future role of benefits at the workplace. The majority of employees currently enrolled in benefits (57 percent) say the role of their or their spouse's employer in providing benefits won't change, but 42 percent of brokers and 37 percent of employers expect employers to play a smaller role in the future.

The complete white paper, "Workplace Forecast: Perspectives on Benefits in the Next Five Years," is available at coloniallife.com/Latest News.

About Colonial Life

Colonial Life & Accident Insurance Company is a market leader in providing insurance benefits for employees and their families through the workplace, along with individual benefits education, advanced yet simple-to-use enrollment technology and quality personal service. Colonial Life offers disability, life and supplemental accident and health insurance policies in 49 states and the District of Columbia. Similar policies, if approved, are underwritten in New York by a Colonial Life affiliate, The Paul Revere Life Insurance Company. Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group. For more information about voluntary benefits, call Colonial Life at (803) 798-7000 or visit www.coloniallife.com.

Harris Interactive Survey Methodology

Harris Interactive® administered the online study on behalf of Colonial Life between June 3 and 7, 2010, via its QuickQuerySM online omnibus service. Harris Interactive interviewed a nationwide sample of 2,071 U.S. adults aged 18 years and older. Of those, 724 were employed full-time and enrolled in an employer-provided or spouse's benefits plan including at least one from the following: health insurance, life insurance or disability insurance. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.  

1 Colonial Life & Accident Insurance Company/Harris Interactive Survey, June 3-7, 2010.

2 Employee Benefit News magazine and Employee Benefit Adviser magazine surveys, June 2010.

SOURCE Colonial Life