As traditional benefits like health-care insurance become more and more expensive for everyone, employers have begun trying to compensate for the lack of them in recent years by offering employees a wide variety of "voluntary" benefits - the kind that require employees to pay the full tab but still cost less than what's available outside the company.
These benefits can include college-savings programs, auto and home insurance, long-term care insurance, and tax-advantaged dependent care accounts.
Yet according to the Associated Press, most workers don't take advantage of these offerings. The usual participation rate is 10 percent or less of a company's work force.
Dallas Salisbury, chief executive of the Employee Benefit Research Institute in Washington, D.C., told the AP that it all has to do with workers' perception of their own financial risks.
"Surveys of employees have shown that if you offer suggestions involving trade-offs, workers want health insurance, health insurance, health insurance," Salisbury said. "Then they want retirement savings. And don't forget paid vacations. And some disability coverage is OK.
"Everything else falls right off the cliff statistically."
The most popular of the voluntary benefit plans is the 401(k) retirement account, but even there, 25 percent of workers don't participate, while only 7 percent to 8 percent contribute the maximum amount allowed, Salisbury said.
Nevertheless, voluntary benefits are a very attractive option for some workers. Not surprisingly, big earners are among them. But so are younger ones, said Jim Gemus, a MetLife vice president who specializes in benefits.
The evidence is in a recent MetLife survey, which found that workers ages 21 to 30 purchased more products through their workplaces than other age groups. This, the study said, "suggests that over the long term, the workplace will be a growing channel for the purchase of financial products."
These employees like paying for the programs they want by payroll deduction, Gemus observed.
"They like the convenience," Gemus said. "And they like the fact that when they buy products at work, they often get a group rate."
Gemus said employees offered a variety of voluntary programs can select those they need and ignore the others. A young worker, for example, might choose to fund a college savings plan, while an older worker might go for a long-term care policy.
Links
