Most American employees (88 percent) at least somewhat agree they consider voluntary insurance benefits a part of a comprehensive benefits program according to the 2014 Aflac WorkForces Report, a study released by Aflac, the leading provider of voluntary insurance in the United States. With plans such as accident, critical illness and hospital confinement, employees view voluntary benefits as a way to fill in coverage gaps. In fact, 63 percent see a growing need for voluntary benefits options in 2014 compared to previous years, and 48 percent of employees say they are more knowledgeable about voluntary benefits than they were last year.

Due to increasing health care costs and an evolving health benefits landscape, the demand for voluntary plans is on the rise. According to a LIMRA survey, voluntary health product sales were $2.6 billion in 2013, which represents a 13 percent increase over 2012.1 Additionally, voluntary products have steadily increased in popularity in the workplace. In fact, the Aflac study found from 2012 to 2013, voluntary insurance plans have seen a 10 percent growth among companies offering voluntary insurance.

"Health care reform has turned workers' attention to their personal health care situations," said Matthew Owenby, vice president of Human Resources at Aflac. "They're also looking closely at their insurance coverage to identify gaps that might leave them vulnerable to rising medical expenses. Consequently, we are seeing an increased need for voluntary benefits among American workers. One way employers can help their employees with no direct cost to the company is to offer voluntary insurance, which provides an extra layer of protection when they need it most."

Employees remain financially unprepared 

Employees' financial conditions remain fragile. A key driver that can put a strain on someone's budget is unexpected out-of-pocket costs that occur even with health insurance. The Aflac study notes that many workers are unprepared to cope with a financial crisis if faced with a health emergency. For example, about 7 in 10 workers (69 percent) at least somewhat agree they regularly underestimate the total costs of an illness or injury, and 66 percent wouldn't be able to adjust to the large financial costs associated with a serious injury or illness.

The Aflac study also reveals that health care costs could have a long-lasting effect on American workers' creditworthiness. Employees say medical costs are affecting their credit scores, keeping them from paying other bills and hindering their efforts to save for a rainy day or retirement:

• 53 percent say their benefits cost were considerably or slightly more compared to last year.2
• 42 percent are not prepared to pay the out-of-pocket expenses for an unexpected serious illness or accident. 
• 24 percent said high medical costs have negatively affected their credit scores and/or they've been contacted by collection agencies about outstanding medical bills.

Employers gain more by providing more options

Employers should consider providing a comprehensive benefits package that includes voluntary benefits options to contain health care costs while helping offset employees' increased medical expenses. Policyholders receive cash benefits to help pay for their rent, mortgage, childcare or groceries, among other out-of-pocket expenses that major medical insurance does not cover.

In fact, more employers have already begun offering voluntary benefits. The Aflac study found 35 percent of U.S. employers offered voluntary insurance to their employees in 2014, a 9-percentage-point increase from 2012. These benefits options not only enhance benefits offerings but also help employers retain and attract workers.

According to the Aflac study, when compared to workers who are not offered voluntary insurance options, employees who are enrolled in voluntary insurance are 18 percent more likely to be extremely or very satisfied with their jobs. Additionally, they are:

• 38 percent more likely to be extremely or very satisfied with the overall benefits package offered to them. 
• 19 percent less likely to be extremely or very likely to look for another job in the next 12 months. 
• 64 percent more likely to completely or strongly agree they feel fully protected by their current insurance coverage.

What's the bottom line for employers? Benefits matter. New and innovative approaches to improving benefits communication and education strategies as well as building robust benefits packages are becoming more mainstream, including a growing reliance upon voluntary benefits.