Are Employee Benefits Heading Toward a Buffet?

There is little doubt that employers are scrambling to find ways to hire and retain employees. Benefits are always on the table. In fact, employers are looking at all sorts of new benefit options that they hope will make a difference. With things like pet insurance and student loan payment benefits now being considered, are employee benefits heading toward a buffet model?

A May 23, 2022 article published by the Las Vegas Business Journal points us in that direction. The article’s author, HR expert Fred Lovingier, suggests dividing employee benefits into four categories: work, health and wellness, financial security, and lifestyle/personal benefits. His rational is one of personalization.

• Personalized Everything

If there is one thing digital technology does very well, it is personalization. People can personalize everything from their streaming content to the food they have delivered to their homes. They can bring up a mobile app and have a ride waiting at the door in minutes. They can take advantage of on-demand healthcare. It is amazing just how personalized the world has become.

As a general agency representing more than one hundred carriers and thousands of benefits brokers around the country, Dallas-based BenefitMall says that employees want the same type of personalization with their benefits packages. They want as many choices as possible. They also want the ability to mix and match according to their needs.

This supports Lovingier’s idea of dividing benefits into categories. If you read his piece carefully, you might come away with the idea of filling categories with a variety of benefits and then allowing employees to pick the ones that are most suited to them. It is essentially a benefits buffet.

• Not All-You-Can-Eat

Sticking with the buffet illustration, the one thing employers would have to be cognizant of is the temptation to offer an all-you-can-eat experience. The benefits buffet would have to be controlled to some degree or companies would risk spending way too much to keep everyone happy. There needs to be limits.

Another big challenge would be determining which benefits to put into each category. Take pet insurance. It is something BenefitMall is encouraging its brokers to pitch. It would make sense to add pet insurance to the lifestyle/personal category. It might be offered alongside childcare assistance. What else would be in that category?

• More Difficult Benefits Administration

Offering employees the equivalent of a benefits buffet might very well thrill them beyond measure. As the epitome of personalization, it would allow employees to design their own benefits, within certain constraints. But not everyone would be happy. In fact, it is not hard to imagine company benefit managers and brokers finding the buffet model nothing short of a nightmare.

It’s already difficult enough to administer a benefits package offering standard health insurance along with dental, vision, and a retirement plan. Throw in life insurance and long-term illness coverage and administration gets harder. Imagine what it would be like for a company with several hundred employees who all have access to a benefits buffet?

• Good to a Degree

Benefits personalization is good, to a degree. Employers are acknowledging as much by trying to create more adaptive benefits packages. But if benefits are headed for the buffet model, it is not going to be pretty. Choices are good. Too many choices, not so much.

It remains to be seen just where benefits end up a few years down the road. The desire for personalization could ultimately mean a benefits buffet. On the other hand, employers could eventually stand up and say enough is enough. They may take personalization only so far before they draw a hard and fast line.