In October 2014, more than 7 million U.S. workers worked part-time due to “financial reasons.” Although they’d prefer to work full-time, these individuals work only part-time due to slack business conditions or the inability to find a full-time job. Although these figures represent an improvement of 10 percent over 2013’s figures, reluctant part-timers still comprise a significant portion of the U.S. workforce.
Unfortunately for part-timers, employers are much less likely to provide benefits to part-timers. This leaves many young and underemployed workers with no access to affordable life, health and other benefits. According to Bureau of Labor Statistics figures, a significant gap exists between the benefits part-time workers in private industry have access to* versus their full-time peers:
- Medical insurance: Among full-time private industry workers, 86 percent had access to employer-provided medical insurance in 2014. By contrast, only 23 percent of part-time workers had medical care benefits available.
- The Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent (FTE) employees to provide affordable health insurance to FTE employees or pay a penalty. ACA defines full-time workers as those who work an average of 30 or more hours per week, so many workers formerly considered part-time now have access to employer-paid medical insurance.
- Retirement benefits: These follow a similar pattern to medical care benefits. In private industry, 74 percent of full-time workers had access to a retirement plan, significantly higher than the 37 percent of part-time workers who had access.
- Life insurance: Seventy-two percent of full-time workers had access to life insurance benefits. In contrast, only 13 percent of part-time workers in private industry had access.
- Dental insurance: Among full-time workers, 56 percent had access to dental insurance, versus 13 percent of part-time workers.
- Vision insurance: Thirty percent of full-time workers had vision benefits; 7 percent of part-timers did.
- Short-term disability coverage: Forty-nine percent of full-time private industry workers had access to this benefit; 15 percent of part-timers had it.
- Long-term disability: Among full-time workers, 44 percent had coverage versus 5 percent of part-time workers.
- Long-term care insurance: Twenty percent of full-timers had long-term care benefits; only 7 percent of part-timers did.
What Are Voluntary Benefits?
Under a voluntary benefit program, the employer offers employees a menu of benefits; employees pay for the ones they want through payroll deduction. The employee pays the cost and the benefits provider handles all administration and provides all needed education materials.
With a voluntary benefits program, part-time workers can have access to the benefits they might lack otherwise. Voluntary medical plans, such as cancer insurance, have no minimum participation requirements, unlike employer-sponsored medical coverage. And with a voluntary plan, employees whose health might disqualify them from individual coverage can often get at least minimal coverage.
The most popular voluntary benefits include:
- Life insurance. Options include term life insurance, interest-sensitive whole life (variable life) and dependent life coverages.
- Dental insurance.
- Vision insurance.
- Supplemental health coverages, including cancer/specified disease insurance, critical care insurance and hospital indemnity plans, which pay specified flat amounts.
- Long-term care insurance.
- Short-term disability insurance.
- Long-term disability insurance.
- Accidental death and dismemberment insurance.
- Group auto and homeowners insurance.
- Nontraditional benefits, such as prepaid legal services, pet insurance and more.
Advantages of Voluntary Benefits
Results from the MetLife 2014 Study of Employee Benefit Trends indicate that voluntary benefits should play an important role in any employer’s benefit program. Between 2012 and 2013, the percentage of employees who strongly agreed with the statement, “I am looking to my employer for more help in achieving financial security through employee benefits” increased dramatically, from 29 to 40 percent.
Employees are also willing to pay for their benefits. Sixty percent said they’d be willing to bear more of the cost of benefits to have a choice that met their needs. A whopping 80 percent strongly agreed with the statement, “I would value more personalized benefits geared to my individual circumstances and age.”
Why should employers care about these emerging employee preferences? Research indicates that benefits are a strong driver of employee loyalty. The MetLife researchers found that “…employees who are very satisfied with their benefits are more likely to feel loyal to their company and to believe their company is loyal to them.” And 65 percent of employees surveyed strongly agreed with the statement, “Having benefits customized to meet my needs would increase my loyalty.” Voluntary benefits let employees do just that.
* A worker with access to a medical or retirement plan is defined as having an employer-provided plan available for use, regardless of the decision to participate or not. Statistics from the National Compensation Survey, http://bls.gov/ncs.