Employers looking to reduce their risk when it comes to benefits plans should consider voluntary options, said Robyn Gray, a consultant for Strata Benefits Consulting Inc.
During a webinar organized by Benefits Canada, experts in the field discussed the merits of shifting the design of programs to include more employee-pay-all benefits.
“Any employer looking to enhance its benefits programs without incurring additional costs looks to this,” Gray said.
Most plans already include some voluntary components, such as optional coverage for life insurance, accidental death and dismemberment, critical illness, even certain retirement products.
Employers are usually able to offer competitive wholesale rates, providing incentives for employees to sign up. It’s almost always cheaper to enrol through the company than it is through an individual plan.
During the economic crisis, Magna International ramped up its voluntary benefits component as a way of managing risk. The auto parts manufacturer suffered 5,000 job losses but still saw an increase of participation in voluntary benefits programs.
It’s an example of how managers must be willing to think creatively to effectively cut costs, said Wendy Jackson, program manager of Magna’s Canadian benefits.
Voluntary benefits are generally 100% employee paid, with discounted rates and little maintenance required.
They can also be an effective marketing tool for employers looking to court a picky gen Y workforce.
“When we look at the new generation that is entering the workforce, [they] are a lot more discerning in terms of what benefits their potential employers are offering them. And I think employers are going to need to do more to differentiate themselves from one another in what’s going to be a tight labour market,” Gray said.
Jackson added that voluntary programs will become more popular as the mentality of the labour force starts to shift.
“As we move forward, it’s clear that benefits are changing, economies are changing,” she said. “I think people are becoming more aware that benefits are a privilege, not a right.”
Furthermore, there is no legal obligation for an employer to offer a benefits program.
“[Sometimes] the only way to keep offering the program and keep it well rounded is that some of that push is going to have to go back to the employees to pay for it.”
