My first part-time job was cleaning rotary phones for a local telephone company in western New York.
Until I was out of college, all of my jobs were on a part-time basis, and most were awful. I delivered flowers, sold ice cream, worked at Dillard’s, and even cooked and sold Italian sausage at biker rallies and Phish concerts across the country (that wasn’t awful). If most Americans look back at their careers, part-time work likely played a role in getting them where they are today.
There are about 25 million part-time employees currently working in the United States, according to the U.S. Bureau of Labor Statistics, and most of them are not given access to benefits through their employer. I’m not talking about major medical or employer-paid disability and term life. I’m talking about a level of benefit that is affordable and helps to minimize financial risk should they or their dependents need care.
The conversation about benefits for part-timers historically has been quick, usually sounding like this: “Because you are not considered full-time and you won’t work enough hours to meet the eligibility for these benefits, they won’t be offered at this time.”
We can all debate the merits of health insurance exchanges and access to major medical should they qualify. But I’m talking about something simpler. A term that most companies have frowned upon post-ACA: limited medical. It still exists, it’s meaningful, and more should take notice of the need to offer such a program to support the millions of new and career part-time employees.
Understanding the Trends
Part-time employees deserve access to affordable solutions to help them navigate our healthcare system without being hit with financial ruin at the same time. The solution is not access to multiple discounts, standard voluntary benefits, or a robust telemedicine program.
First, understanding the part-time population is key, as they are not the same across all industries or regions. Looking back at the financial crisis of 2008 and even the recent pandemic, we saw multiple industries grow in the number of part-time positions they offered versus full-time. I recall staffing industry clients in 2008 that were booming with an influx of applicants for part-time positions and clients converting full-time roles to part-time roles. There were active conversations about how to recruit these roles and how to retain employees once they were hired.
Understanding these trends and how an employer feels about the often larger part of their employee base will help those of us on the outside of the company understand how best to serve those in need of benefit options.
I’ve sat in rooms with CFOs and CHROs of large and small companies to discuss benefits offerings and how best to improve their recruitment and retention of these key employees. What is often overlooked is the true employee need. I don’t mean this to suggest that companies don’t listen to their employees or understand their employees. Instead, I’m suggesting that we have to think like a part-time employee versus a historically full-time employee who often has too many benefit options.
Years ago, I sat with a large pet supply retailer to talk through its part-time benefits package and to understand how it envisioned improving the offering for the upcoming year. Unsurprisingly, the head of benefits mentioned “pet insurance.” I pushed back and asked, “Do you know how many of your part-time employees have pets?” Of course, the answer was no. I then asked if they would feel comfortable with a retail employee taking pet insurance over a similarly priced limited medical program. This question made them think. There is nothing wrong with pet insurance (and as a dog owner myself, I have it). But what most of their employees wanted was better access to prescriptions and better office visit benefits, access to disability insurance, and better accident benefits. The employer learned this by surveying its part-time employees and engaging them in conversation. Only then did the company learn what was important to its part-time population as opposed to assuming what leadership thought would be well received given their industry.
Demographics Often Offer Key Insights
Knowing the demographics of the population gives key insights into purchasing habits. We shouldn’t assume employees will want hospital indemnity, accident and critical illness. Why? Because these benefits, while affordable, don’t always address their immediate care needs. Offering programs that help part-time employees understand access to telemedicine, a primary care physician, urgent care, and even convenient care clinics is the best strategy. A tiered approach through enrollment—offering a limited benefit medical plan followed by vision, dental, disability and other supplemental products—helps employees gauge the importance of the products. Think about your own benefits enrollment process. What is the first product you see? Medical. Part-time employees should be no different, as our brains are wired to view elections like this in the order of importance.
I see time and time again employers offering only voluntary benefits to their part-time employees. It’s the path of least resistance for employers, brokers and often enrollment platforms. But this strategy is flawed. It’s not showing “value” for these employees, and it’s only offering something versus nothing. It is astounding the number of employee complaints we see when employees need to seek care for their dependents due to a non-critical illness only to realize the $9 policy they bought won’t cover it. This doesn’t mean don’t offer these policies; it means you should also offer something that covers the day-to-day need versus only the accidental need.
Dollars and Cents
Like most decisions, it comes down to dollars and cents. Part-time employees are paid a range of wages, from waitstaff to high-end IT staffing. This hasn’t changed much, but it needs to be taken into consideration more often. A former boss of mine in the part-time insurance market once told me employees won’t pay for a program that costs them more than what they make in one to two hours of work per week. I thought that was crazy, but 20 years later it still holds true.
If I take a $15 per week product, how much more do I have to work a week to make up the difference in pay? Is this an extra hour or two a week or another shift? Do I need additional child care? What about transportation costs? Now think about a $30-a-week product. Every employee’s ability to afford a product or multiple products is different. But this rule of thumb has proven itself over and over again: if it costs more than what a part-time employee makes in one or two hours of work per week, they won’t take it.
Thinking Outside the Traditional Insurance Box
Supporting our part-time employee workforce with meaningful benefits takes some investigation and customization. It’s not hard and often has an ROI far greater than improved recruitment and retention while driving down hard costs. The greatest ROI is showing this often overlooked workforce that you hear them, you understand them, and you want to provide them with a meaningful and affordable benefits package.
As a carrier, broker or anyone in our industry, we owe it to this important workforce population to think outside of the traditional insurance box. Not everyone wants major medical, and not everyone will have access to it. Providing options to show that their best interest is being considered often improves morale and employee perspectives on how well their employer is treating them.
Matt LaMarche is chief distribution officer and divisional VP at Globe Life Benefits.