BIP Summer 2024

Beware of the dark side of trendy benefits Help employees become true consumers of healthcare. By Eric Silverman

We play a crucial role in shaping employers’ benefit packages. While more comprehensive and customizable offerings seem beneficial, it’s essential to consider the potential challenges and unintended consequences. One issue is the financial burden associated with expanding ancillary benefits. While attractive on paper, these benefits can strain a company’s finances. It’s our responsibility to help clients understand the long term financial implications. As advisors, we should en courage employers to consider a more tailored benefits strategy that aligns with the diverse needs of their workforce. One way is to assist employers in customizing their benefits through an em ployer-funded “shopping spree,” a defined contribution model. Each employee receives a fixed monthly amount to spend on any non-medical benefit they choose. Employees must under stand that these funds are “use it or lose it” and that they do not have the option to convert unused amounts into paycheck increases. Any excess spending results in a payroll deduction, while unused funds do not in crease their paycheck. The flexibility offered by enhanced benefits, also known as voluntary benefits, is appealing, but it comes with its own set

critical in today’s workforce, focusing too heavily on them can unintentionally sideline other vital areas, such as professional development and mental health support. This oversight might alienate employees who do not directly benefit from such initiatives. Additionally, diversity, equity, and inclusion (DEI) initiatives are vital, but there’s a risk they could be treated as superficial additions to benefits packages. We must encourage clients to implement meaningful, substantive DEI practices rather than cosmetic ones. This helps ensure these initiatives genuinely improve workplace culture.

of challenges, notably decision fatigue. The array of options can be overwhelming, leading to underutilization or suboptimal choices. We must assist employers in structuring these programs to simplify decisions and maximize employee engagement and satisfaction. Moreover, the employee funded nature of these programs can lead to disparities in who can afford to opt in, potentially creating inequities within the workplace. We must guide our clients in exploring ways to make enhanced benefits more accessible to all employees. For instance, while family-friendly benefits are Eric Silverman owns Voluntary Disruption, a non-medical employee benefits technology, communications, and engagement firm with in-house distribution and enrollment capabilities. The firm serves advisors, brokers, and consultants.

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Our role is to help clients critically assess their benefits strategies to avoid potential pitfalls and truly meet the needs of their employees.

The shift toward more comprehensive and flexible benefits packages is generally positive, but it comes with challenges that require careful navigation. Our role is to help clients critically assess these trends and tailor their benefits strategies to truly meet the needs of their employees.

Summer 2024 bip magazine 19