Voluntary Benefits for the Multi-generational Workforce

T H E M U L T I - G E N E R A T I O N A L WO R K F O R C E

S O C I E T A L T R E N D S & V O L U N T A R Y B E N E F I T S

H OW T O L A U N C H A V O L U N T A R Y B E N E F I T S P R O G R A M

T H E R O L E O F T H E V O L U N T A R Y B E N E F I T S C O N S U L T A N T

6 trends in voluntary benefit products Trend No. 1: Student Loan Debt Repayment Assistance

THE MULTI-GENERATIONAL SAFET Y NET

6 TRENDS IN VOLUNTARY BENEFIT PRODUCTS

OTHER POPULAR VOLUNTARY BENEFITS

Student Loan Debt Repayment Assistance is a huge topic for Millennials and one of the leading financial wellness opportunities for attracting and retaining top talent. Yet only 4% of all employers offer any kind of student loan benefit. 18 How does it work? Programs vary. Some Student Loan Debt Repayment vendors use a model where the employer matches the employee student loan payment by contributing funds pre-tax into the 401(k) on behalf of the employee. The goal is a creative reallocation that frees up an employee’s budget to pay their loan while leaving more of their paycheck funds available for other necessities. Other models offer refinancing, which will turn a high interest loan into a lower interest loan. Refinancing can lower a monthly payment, and the borrower pays off the full loan amount. Another model is loan consolidation. Still another model aligns borrower with federal programs that are difficult for the individual to enroll and stay in over the long term. Most programs allow the employer to channel payroll deductions directly to the student loan financial institution. Features and benefits of Student Loan Debt Repayment Assistance may include student loan monitoring, repayment assistance, counseling, employee pre-tax contributions, employer contributions and loan refinancing. In general, the employer agrees to pay a specific amount toward the employee’s student loan debt, or reimburses the individual for up to a specified amount of what the employee paid toward the loan in a given year. The employee enrolls in a plan that aligns with their financial situation. By reducing or possibly eliminating the employee’s monthly loan payment, the employer’s total compensation package can become more competitive without having to increase wages. What to watch for: These programs can have a high per-employee, per-month cost. Also, work with your benefits broker’s ERISA attorney to ensure the student loan assistance program is compliant, especially if it involves matching contributions to a 401(k). Trend No. 2: Individual Long-term Care Individual Long-term Care Coverage helps pay for care for individuals with chronic illnesses, disabilities or other conditions over an extended period of time. Individual Long-term Care provides funds to help cover the cost of home care, assisted living, adult day care, respite care, hospice care, nursing home and Alzheimer’s facilities. Without this coverage, the patient may have to rely on family members for financial support and/or actual care, which often exacts a physical and emotional toll on the caregiver. The cost of long-term care can quickly deplete life savings. How does it work? Group Long-term Care policies are all but non-existent. Small and mid-sized employers (and even many large groups) tend to utilize Individual Long-term Care policies bundled together with a group discount. 19 Bundling Individual Long-term Care policies provides employers with greater choice in selecting a preferred insurer based on pricing, ratings and financial stability, and policy options. Because an employee can’t predict future long-term care needs, consider an insurance product that offers flexible options. Employees can purchase coverage for a direct relative, such as a parent, spouse or child. What to watch for: Individual Long-term Care is complex. Employers need a Voluntary Benefits expert to help them navigate the market. Also, the older the covered employee or dependent is, the more costly the coverage will be. While exceedingly rare, the carrier reserves the right to increase the premium in the future.

Only 4%% of employers offer Voluntary Benefits

- US News and World Report

40 million Americans provide unpaid care to adult family members.

18 US News and World Report, “Young Workers Turn to Employers for Student Loan Debt Solutions” 19 American Association for Long-term Care Insurance, “Types of Group Long-term Care Insurance Coverage”

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- AARP, “Study on Caregiving in the U.S.”