When it comes to benefits, is more always better?
Not necessarily, says Eric Silverman, founder of Voluntary Disruption, a
“If I’m a hair salon, I can’t afford to lose two or three people from my staff — it’s not like you can hire anyone off the street and tell them to go cut hair,” he says. “But when that hair salon’s archrival down the street starts adding benefits to attract talent? Well, then I better do it, too.”
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But benefit offerings can only go so far, Silverman says. He talked us through the changes he and his team observed in 2021, what they’re anticipating from the benefits world in 2022, and how they’re working closely with their clients to make sure that they’re putting their employees’ needs first, and not just getting charmed by the shiny new offerings of a fast-expanding benefits marketplace.
How have you seen the approach to benefits shift among employers?
What we saw in 2021 was employers adding benefits at a rapid pace. But it’s not because they can ultimately afford to pay for more benefits. They’re worried about keeping talent. But I wouldn’t be doing my job as a professional benefit adviser if I advised employees or employers to spend money on, say, pet insurance before they buy life insurance or dis- ability or accident or critical illness insurance.
Do a lot of your clients suggest going in that direction?
It blows my mind how many employers want to do that, and it’s because pet insurance sounds exciting! But at the end of the day, medical bankruptcy is still the leading cause of bankruptcy in the United States. The average American is not going bankrupt because they had to pay full price at the veterinarian for Fluffy. And they’re not going bankrupt because they’re buying clothes at Nordstrom when they should be shopping at Walmart. The majority of Americans that go bankrupt, it’s because of medical debt.
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What should employers prioritize, rather than these “sexier” benefits?
Well, these people that go bankrupt, they’re people that have health insurance, they have rich benefits. But they might only have medical, and that leaves them vulnerable. Life insurance, disability insurance, critical insurance — those are the “voluntary” benefits that will keep people from losing everything under the sun they’ve ever worked for. So I always tell employers, if you’re going to budget, and if your employees are going to budget, don’t put money toward things like pet insurance before you put money toward those more crucial programs that can really help people weather a significant financial event.
Is it difficult to get employers and employees to see it that way? I feel like consumer awareness of some of these less vital benefits is so high right now.
It’s really about how we, as advisers, lay it out. When we work with an employer, we create a three- to five-year implemen-tation strategy, and look at what’s available on the market, what they might already offer, and what they don’t. And then it’s about prioritizing, and not overloading. So year one, let’s say, we’d look at two or three or four — at most — employee benefits, insurance benefits. Year two, we evaluate, make sure those are a good fit, and maybe add in another option or two, and maybe this is where pet insurance comes in.
So it’s just about building a robust menu of offerings with intention, and over time?
A lot of employers want to do it all at once, but that’s not good for the employer, and for the employee, it can be over- whelming. It’s like eating at the Cheesecake Factory — I love that restaurant, but my god, that menu is absolutely ridiculous. It’s too big. My wife and I go there and we’ve learned to get the same thing every time, which is a perfect experience. But otherwise, it’s just too many options. And it’s the same with benefits, right? That much choice can cause confusion, which can cause paralysis.
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Once you start adding some of those additional and employee-funded voluntary benefits into the package, what are the offerings you see trending?
ID theft and fraud protection have been growing, and I think it will continue to grow. There are so many carriers out there that offer this benefit, and it’s good. It’s been around almost a decade, if not more, but it’s clear that cybersecurity is only growing in interest and concern. And another benefit I think we’re going to see grow over the next couple years is helping employees with student loan repayment and consolidation. There are so many millions of Americans struggling to pay off that debt, and this is a way employers can help them find more steady financial footing.
Where does technology fit into all of this?
Technology is just huge. At least for our hundreds of clients, self-serve enrollment technology has absolutely become the wave of the future, and it’s changed the way employees select their benefits. I don’t necessarily think enrollment firms are going to disappear, but the age of having to sit down one-on- one with an employee to stuff them full of benefits, those are the days of the past. Virtual, self-serve technology has made enrollment so sophisticated and easy for the employee — and then we as advisers can offer backup and hand- holding via an on-demand call center. Some employers worry that adopting these tech tools will be hard for their teams, but people buy stuff and get educated online every day. Benefits are no different. It’s helping get people the benefits they need, and it’s not overselling them on benefits that don’t serve them.
