Voluntary benefits vs. inflation: 4 considerations for employees

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Key takeaways

Voluntary benefits may help mitigate financial fragility amid uncertainty.

Chances are, inflation is a hot topic in your boardroom and your breakroom. In fact, the public views inflation as the top problem facing the United States—and no other concern comes close.1

With consumer prices up 9.1%, food at home up 12.2%, gas prices up 60.2%, and electricity prices up 13.7% over the year ended June 2022,2 inflation is leaving a big dent in employees’ wallets. For many, the natural response is to tighten the purse strings and cut unnecessary spending.

For many employees, voluntary benefits offered at work are a “nice to have,” not a “must have”—especially when their dollars are already stretched thin. However, opting out of voluntary supplemental health and life insurance may lead to even greater financial challenges down the road.

If your employees are thinking about opting out of voluntary benefits due to cost concerns, here are four important considerations you can share:

1. The risks of critical illness, injury, and loss of life are ever present.

An employee has a 6% chance of having a homeowner’s insurance claim,3 while their risk of developing cancer in their lifetime is around 39%.4 They wouldn’t go without homeowners’ insurance, so why risk going without supplemental health insurance (which costs much less!)? Here are more eye-opening statistics about the risks of illness and injury:
  • There are 5,200 new cases of cancer diagnosed every day in the U.S.5
  • About 805,000 people in the U.S. have a heart attack every year.6
  • 1 in 6 Americans seek medical attention for injuries every year.7

Should the unthinkable happen, voluntary benefits can help through cash benefits that are paid directly to employees.

2. Medical costs are on the rise, too.

Most employees are keenly aware of rising grocery and gas prices, but they may not realize that high inflation rates affect medical prices, too. If employees pay coinsurance—a percentage of covered healthcare services paid after the deductible is met—even a short stay in the hospital could leave them owing thousands of dollars out of pocket.

Cash benefits from supplemental health insurance can help cover coinsurance and other out-of-pocket expenses like deductibles and copays.

3. Living expenses add up fast.

If an employee is ill or injured and must take time off work to recover, will they be able to cover rising living expenses without their income? Because supplemental health insurance pays cash benefits directly to employees, the money can be used for any purpose—including groceries, gas, or rent and mortgage payments.

4. Voluntary benefits are relatively inexpensive.

Supplemental health and life insurance are far more affordable than most people think. Premiums for supplemental insurance typically cost just dollars a paycheck—far less than the cost of nonessentials such as takeout coffee, restaurant meals, and cigarettes. Premiums can typically be paid via automatic payroll deduction and flexible funding options.

Optavise is here to help!

Optavise can help you guide employees to make informed benefits decisions in the face of inflation. Learn more about our services by contacting us here.

1Pew Research Center, By a wide margin, Americans view inflation as the top problem facing the country today,https://www.pewresearch.org/fact-tank/2022/05/12/by-a-wide-margin-americans-view-inflation-as-the-top-problem-facing-the-country-today/, May 2022.

2U.S. Bureau of Labor Statistics, Consumer prices up 9.1% over the year ended June 2022, largest increase in 40 years,https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm, July 2022.

3Insurance Information Institute, Facts + Statistics: Homeowners and renters insurance, https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance, 2022.

4American Cancer Society, Cancer Facts & Figures 2022, 2022, p.2.

5American Cancer Society, Cancer Statistics Center, https://cancerstatisticscenter.cancer.org/#!/, 2022.

6CDC, Heart Disease Facts, https://www.cdc.gov/heartdisease/facts.htm, 2022.

7National Safety Council, All Injuries Overview, https://injuryfacts.nsc.org/allinjuries/overview/, 2022.