Preparing for Open Enrollment: Stepping Up Your Voluntary Benefits Game

The landscape of employee benefits is constantly evolving. Rising healthcare costs are driving deductibles and out-of-pocket maximums higher than ever, all in an effort to reduce costs. This is one of many trends that is increasing the demand for voluntary benefits and highlighting the important role they play in an organization’s benefit strategy. 

So what are voluntary benefits? Voluntary benefits are additional or supplemental coverages that employees can choose to pay for, typically through the convenience of payroll deduction. Unlike standard health insurance, voluntary benefits allow for greater customization to individual needs and budgets, giving employees more flexibility and control over the comprehensiveness of their own benefits package. 

With Open Enrollment approaching fast for many Arizona school districts, it’s important to look at the reasons why now is the perfect time to review your voluntary benefits strategy and offering, and to step up your game if and when necessary. 

Why Are Voluntary Benefits Gaining Popularity?

1. Employee Demand for Personalization

Employers are noticing that with four to five generations in the workforce, benefits personalization is of utmost importance to their employees. It’s vital that different age groups have access to coverages that meet their needs and the ability to select what matters most to them at the time —e.g., ID theft and pet insurance for younger workers, critical illness, life, and long‑term care for mid‑career and older employees. Traditional benefits packages (medical, dental, vision, life, etc.) can fall short of addressing this demand. With voluntary benefits, employees can select offerings that resonate with their unique circumstances.

2. Cost-Effectiveness and Flexibility for Employers

Since employers are not responsible for covering the cost of voluntary benefits, these benefits can be a cost-effective way to provide a more comprehensive, competitive benefits package without increasing the cost or richness of the plans that employers do pay for, such as medical. Many voluntary lines (accident, critical illness, legal, pet, ID theft) can be offered based on employee demographics and cited needs, with no upfront employer cost at all other than implementation cost. It’s important to note that while employers typically do not contribute to the cost of these benefits, they need to be properly marketed, evaluated, and selected just like the benefits that employers do pay for – taking important factors such as breadth of coverage (plan design), affordability (price), and accessibility (underwriting) into serious consideration.

3. Employee Satisfaction and Retention Tool

Rising medical costs, limited emergency savings, and growing household debt are pushing employees to look for more affordable ways to cover deductibles, surprise bills, and life events. Offering voluntary benefits such as a Hospital Indemnity plan that covers an individual deductible can meet this need – and in turn, boost employee satisfaction and retention. In fact, 71% of employees consider their benefits offering to be an important factor when deciding to stay with or leave their employer, according to a 2024 survey by the Society for Human Resource Management (SHRM). 

4. Competitive Advantage in Recruitment

As competition for talent intensifies, offering a range of voluntary benefits can give employers a competitive edge in attracting high-quality candidates. In fact, voluntary employee benefits are a deciding factor in recruitment, with many candidates citing benefits as a top priority when evaluating job offers.

Now that we know why voluntary benefits are on the rise among both employers and employees, it’s important to look at which are getting the most traction – and which ones you should consider offering to your workforce.

Popular Types of Voluntary Benefits to Consider for Open Enrollment

Open Enrollment is the one time a year that employees must review and evaluate ALL of their benefit options – and make decisions for the plan year based on their individual and family needs and budgets. When considering which voluntary benefits to implement during this Open Enrollment, you’ll want to look at those that are gaining popularity:

• Health & Wellness Perks: help maintain physical and mental health (e.g., gym memberships, employee assistance programs, virtual mental health)
• Supplemental Benefits: help recoup out-of-pocket expenses and stay financially afloat during times of crisis (e.g., disability, critical illness, accident, hospital indemnity, long-term care)
• Pre-Tax Savings Accounts: help pay for certain health, dental, vision, and childcare-related expenses with pre-tax dollars (Health Savings Accounts, Flexible Spending Accounts)
• Financial Wellness Benefits: Help ensure financial protection (e.g,. life insurance, identity theft protection, legal assistance, retirement planning services)
• Pet Benefits: Help cover out-of-pocket costs associated with furry family members (e.g., pet health insurance, veterinary discount plans, telehealth)

How Employers Can Prepare for Open Enrollment

While deciding to offer voluntary benefits is an important step, employers must make sure that these benefits are of value to employees and are properly implemented and communicated to employees during Open Enrollment to achieve the greatest impact and perceived value among employees. Here are a few strategies to maximize the effectiveness of voluntary benefits:

1. Needs Assessment

It’s important to determine what voluntary benefits your employees would find valuable and would enroll in if they had the option. Survey your employees, review demographics, and claims data. Insights here will help you identify which types of voluntary lines (supplemental health, financial, lifestyle) are suitable for your workforce – and which lines specifically they would like to have access to. During this stage, also take a close look at your competitors to see which voluntary benefits they offer that you may not. 

2. Carrier Selection

Once you’ve decided which benefit lines to offer your employees, it’s time to decide on the providers. Be sure to review and compare carrier options in terms of cost, plan design, underwriting, and integration with your current HRIS/ben‑admin systems. Select the carrier(s) that work well on your HRIS/ben‑admin systems, meet employee needs, and provide the most bang for your employees’ buck.

3. Leverage Technology

Don’t forget to leverage HRIS/ben‑admin systems to streamline enrollment, tracking, and adjustments, and to make it easier for employees to take full advantage of all of the benefits offered. Once a carrier is selected, we recommend continual (at least weekly) communication with the carrier and your current HRIS/ben-admin system provider to ensure implementation goes off flawlessly.

4. Clear Communication

In the weeks prior to Open Enrollment, lean on your selected carrier for customized benefit education and communication materials and enrollment resources. You’ll need to provide employees with as much detailed information about the new voluntary benefits available to them, as well as enrollment deadlines, and where to seek more information on their options, as possible, to make this initial enrollment a success. Emails, videos, flyers, webinars, presentations, one-on-one and group meetings are recommended to help employees make truly informed decisions.

With Open Enrollment fast approaching, now is the time to review and optimize your voluntary benefits strategy. Contact VSMG today at 623-594-4370 to learn how our independent consulting approach can help your organization design a benefits strategy that meets employee needs while boosting recruitment and retention efforts.

About VSMG

Built by and for Arizona public sector employers, VSMG is a leading employee benefits consultant, dedicated exclusively to serving the needs of Arizona’s school districts, municipalities, and other public entities for over 20 years. We are the largest provider of employee benefits consulting services to Arizona school districts, serving over 40,000 benefit-eligible employee lives, and the only nonprofit consultant offering these services.