By Paul Cuno-Booth, BusinessNH Magazine
Health coverage for pets. Identity-theft protection. Critical illness insurance that helps with out-of-pocket costs in the event of a major medical issue.
To support their employees—and keep them around in a tight labor market—NH employers are offering a variety of insurance products as part of their benefits packages.
“The companies we’re working with in New Hampshire are like, ‘I have a whole person that comes to work,’” says Michaela Scott, a strategic benefits adviser at Methuen, Mass.-based Borislow Insurance. “Their mental health, their financial health, their actual health—all of these things come to work.”
In a November 2021 survey by insurance firm MetLife, about three-quarters of employees said a wider range of benefits would make them stay longer with their current employer, and would help to reduce their stress and improve their finances. That is up significantly from a decade ago when 25% of employees were more likely to say benefits were important in picking an employer.
“Your salary is great. It’s kind of what gets you in the door,” says Janine Tadakowsky, director of operations for total rewards at Brattleboro, Vt.-based The Richards Group, which serves clients around New England. “Your benefits package, and the perks that come along with it, are what keeps you there.”
Supplementing Health Insurance
As health insurance deductibles have grown, many employers also provide other benefits to help employees offset some of their out-of-pocket costs. In 2022, according to survey data from the Society for Human Resource Management, 38% of NH employers offered critical illness insurance, which pays out in the event of a serious condition like a heart attack, cancer or stroke, helping patients pay for medical bills, transportation and basic household expenses. Meanwhile, 44% of employers offered accident insurance.
As employees face bearing more of the brunt for health care costs, they are increasingly seeking supplemental insurance, says Matt Labbe, an account executive with Concord-based The Rowley Agency. “It’s more out of necessity, because the employer has gone to the higher deductibles,” he says.
Kirsti Karpawich, a strategic benefits consultant at Borislow Insurance who’s been working with NH employers since 2004, says employees who elect critical illness and accident coverage may not always understand at the time of the claim what their policy covers.
“The upside is that there could be an indemnity cash payment that can be very helpful. The downside is that it’s on the employee to note the parameters of the policy and to file a claim.” She says health reimbursement accounts, which pay a portion of employees deductible expenses, are an alternative to limit out-of-pocket cost.
Labbe says some companies are turning to the Affordable Care Act marketplaces for health insurance—having employees buy coverage on the individual market, then subsidizing their premium. “It’s administratively a little bit easier for the employer and can help on the cost side as well,” he says.
About one-quarter of employers offered access to long-term care insurance in 2022, according to SHRM. But Karpawich and Labbe say the skyrocketing costs of long-term care over the past 15 to 20 years have largely made it too expensive to offer group plans. Instead, it’s now mostly offered on an individual basis, often in combination with life insurance.
“It’s usually more used as an executive retention tool, or the owner wants to put it in place, maybe for themselves and a couple of key executives,” Labbe says.
Identity Theft Insurance
Identity theft insurance is a growing benefit, covering expenses like notary fees, legal costs and lost wages incurred while recovering a stolen identity. Some plans also proactively monitor the web for suspicious activity, connect policyholders with specialists who can help restore a stolen identity, or reimburse funds stolen through fraud.
For some businesses, providing employees with identity-theft insurance is a way to demonstrate to potential clients that they take privacy and data security seriously, says Scott. “Really smart companies are doing that,” she adds. “They’re aligning their benefits with their core values.”
Benefits like critical-illness and identity-theft insurance are often offered on a voluntary basis, with employees covering most or all of the cost, says Eric Gulko, president of Innovo Benefits Group in Concord, Mass. But their convenience and discounted group rates make them attractive to many employees.
“If I were to go out and try to find identity theft insurance, I might not know where to start,” he says. But if an employer has already done the legwork of vetting and selecting a plan that an employee can pay for through automatic payroll deductions, “that’s really convenient.”
Paid Leave and Flex Time
One emerging benefit is NH’s new paid family and medical leave program, which employers or workers can buy into voluntarily. The program covers 60% of an employee’s wages for up to six or 12 weeks for qualifying events, including taking parental leave, dealing with a serious health condition or caring for an ill family member.
There’s huge demand among workers for such benefits, says Karpawich. “We’re seeing this across the board, that employees are asking for flexibility,” she says.
In the MetLife survey, 55% of workers said a flexible schedule, including the ability to sometimes work remotely, was a “must-have”—up from 37% just before the pandemic. And employees who liked their employer-provided leave programs were twice as likely to say they were satisfied in their current jobs.
But many larger employers decided not to offer the paid family and medical leave benefit immediately, as they are uncertain what pricing will look like over the long term for the new benefit, Karpawich says. State officials announced the program last fall, and it launched Jan. 1. “Many large employers are watching the market and waiting for the program to be fully developed before adopting it,” she says. “It was just too much too soon for them to jump in. It’s not that they weren’t interested, but they weren’t quite ready.”
Making the Right Choices
Mike Foy, president of Exeter-based Foy Insurance, says it’s important to weigh both the cost of a benefit and how much employees will use it. Identity-theft protection, for instance, is relatively cheap—it costs about $200 annually for Foy’s company of 90 employees—but he doesn’t think anyone from his company has ever used it.
Disability insurance, by contrast, might come to around $20,000 annually. “But employees, when something goes wrong, they’re appreciative that they had it,” he says.
The MetLife survey indicates that many employees want extra benefits, even when they have to pay something for them. It found that about half of employees would be willing to pay more for more benefits; which increases to 60% for millennials and Black employees.
Employers can find “these little golden nuggets of benefits that may actually be free or low cost [to the employer] that you can put in to show your population that you’re interested in their well-being and in their future,” Tadakowsky says.
Gulko adds that relatively inexpensive benefits—such as matching donations or days off for volunteer work—also matter to employees. “Sometimes the most valued benefits are not the ones that are the most expensive,” he says. “Many younger employees report wanting to work for employers who best reflect their own values.”
When deciding which benefits to offer, Tadakowsky says it’s important to consider demographics as different generations may value different benefits. For instance, pet insurance is proving popular with many younger workers. “They’re not able to move out of their homes and to live on their own just yet, because they have so much tuition debt,” she says. “From my experience younger generations are putting off starting a family and purchasing a home. Pets have become a big part of young people’s lives.”
At the other end of the age spectrum, some employers are looking at ways to help educate older employees about enrolling in Medicare. “It’s really making sure that the employee feels like they have what’s important to them at that moment,” Tadakowsky says. “What’s important to a 20-something is going to be vastly different than what’s important to a 55-plus.”
She and others recommended surveying employees about their wants and needs to make sure the dollars spent on benefits are going toward perks they’ll actually use.
“Maybe you find out that you’re a group of 50 people and only three people have pets,” Labbe says. “Maybe the juice isn’t worth the squeeze, if you will, offering pet insurance, because no one’s going to buy it anyway.”
He also warns against offering too many voluntary benefits at once, “because people have a tendency to get overwhelmed and not purchase anything.”