The Value of Voluntary Benefits

David Port
Wednesday, April 22, 2009; 12:00 AM

As a small-business owner confronting the realities of a sagging economy, Steve Roper knew he had to cut costs someplace, and employee benefits were a logical target. But he was loathe to roll back coverage without giving his employees something substantial in return--a carrot to keep his core staffers content in their jobs, and one that might even add perceived value to their benefits packages at little to no extra cost to his company.

That's when Roper, himself a veteran workplace benefits broker and the owner of Roper Insurance & Financial Services in Denver, decided it was time to offer his employees voluntary benefits. Now, he says, more small business owners are following suit. "Lots of small companies are saving money by increasing deductibles on their health-care plans and offering voluntary benefits to bridge the gap."

Difficult economic times mean tough either/or choices for small-business owners. For many, adding voluntary benefits to compensate for cutbacks elsewhere in a benefits package or to enrich an existing core benefits plan--particularly one with a high deductible--makes more sense than making cuts in critical areas of a business, laying off key employees or losing them to a competitor with a richer benefits package.

Instead of paying for disability insurance, life insurance, dental insurance and the like as core employee benefits, small-business owners have begun to see the wisdom of providing those kinds of benefits on a voluntary basis, a la carte-style, where employees can pick and choose among them and pay for the ones they want and can afford. Not only does offering voluntary benefits cost small employers virtually nothing and help level the benefits playing field with larger companies, it also affords employees access to various types of insurance coverage, typically with looser underwriting requirements and at group rates that are "lower than if they went out and got coverage on their own," points out Bernard DiFiore, president of BenefitMall, a Texas-based benefits wholesaler.

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