RADNOR, PA — Lincoln Financial (NYSE: LNC) has identified a gap between employer perceptions of voluntary insurance benefits and their adoption, with new research finding that just 11% of surveyed employers offer accident, critical illness and hospital indemnity coverage together despite widespread recognition of their potential value in retaining workers.
The findings come from a three-part national study conducted with the Employee Benefit Research Institute (EBRI), examining how employers, insurance brokers and employees evaluate supplemental health, dental and vision benefits.
The research surveyed 408 employers, 170 brokers and 1,130 benefits-eligible employees, providing Lincoln with data on workplace insurance preferences as companies prepare for annual benefits enrollment.
Among employers offering voluntary benefits, 74% reported positive effects on recruitment, retention and employee performance. Yet fewer than half of surveyed employers offered any individual supplemental health insurance product.
The study also found differences in reported workforce outcomes based on the breadth of supplemental coverage.
Among employers offering accident, critical illness and hospital indemnity insurance, 86% reported a positive effect on employee retention from their benefits strategy, compared with 72% of employers offering none of those supplemental health products.
Similarly, 46% of employers offering all three products reported a positive effect on absenteeism, compared with 29% of employers without supplemental health coverage.
The results indicate an association between broader benefit offerings and employers’ perceptions of workforce outcomes, rather than establishing that additional insurance coverage directly improves retention or attendance.
The findings are relevant to Lincoln’s workplace benefits business, which provides insurance products intended to supplement employer-sponsored health coverage and help employees manage expenses not fully covered by primary medical insurance.
Jimmy Reid, executive vice president and president of Workplace Solutions at Lincoln Financial, emphasized the importance of explaining coverage options to employees.
“Making benefits clear and relevant can give employees greater confidence as they choose coverage for themselves and their family members,” Reid said.
The study identified limited employee engagement during annual enrollment as another challenge.
According to the survey, 86% of employees spend four hours or less reviewing enrollment materials, leaving employers and insurance providers a relatively narrow opportunity to explain coverage options.
After reading brief descriptions of available products, more than three-quarters of surveyed employees expressed interest in dental, vision and critical illness insurance.
Insurance brokers also reported that employee demand influences benefit selection, with 60% identifying demand as a driver of employer decisions.
Those findings suggest that awareness and communication may influence how employees evaluate supplemental insurance products, particularly when coverage is optional and requires additional spending.
The research covers five insurance categories: dental, vision, accident, critical illness and hospital indemnity coverage.
Lincoln Financial offers workplace insurance products across these categories and provides educational materials intended to help employers explain coverage choices during enrollment.
The company has made the study, Benefits in Focus: Supplemental Health, Dental and Vision Perspectives, available at LincolnFinancial.com/BeyondBenefits, along with interactive data and recommendations for employers and insurance brokers.
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