Getting benefits through workplace may not be best

Joann Visconto was considering buying life insurance that was offered through the bank where she works. But the policy had a premium that could rise every year, and it wasn't portable, so she would lose coverage if she changed jobs. So Visconto, who is over 40, called an agent and bought a guaranteed level-premium policy for a similar price.

"When you go with a broker," says the Burlington, N.J., resident, "you can tell him this is what I want, and he is going to get it."

Increasing numbers of Americans are encountering similar choices as employers ask them to buy their own benefits, including disability and life-insurance policies, medical and dental coverage, and even benefits not normally found in the workplace like homeowner insurance and identity-theft coverage. Few businesses are actually replacing employer-paid benefits with these so-called voluntary benefits — "voluntary" because you pay for them yourself. But some experts predict that eventually, American workers will have to buy many of the benefits they now get free at work, much the way most of the burden of funding retirement savings has shifted from employers to employees in recent years.

For now, many small businesses that could never afford to subsidize benefits are contracting with insurance companies to offer them to workers at a group discount. And large companies are adding more such benefits, figuring that the discounted rates help to offset the pain for employees who are being asked to pay a bigger share of their major medical coverage. Employees can usually buy such benefits at a discount of as much as 25 percent to what they would typically have to pay on their own.

But as Visconto's experience shows, voluntary benefits sold through an employer aren't necessarily the best — or the cheapest — alternative. While it's often hard to beat workplace deals on essential health benefits, consumer advocates caution that employees should weigh any benefit offered in

the workplace against similar products they can buy solo. Young, healthy employees, for instance, might find term life insurance on their own that is cheaper than discounted life insurance in the workplace.

Danny Sparks, plant manager at Willacoochee Industrial Fabrics, says the Georgia manufacturing concern has always paid the bulk of the health-insurance premiums for its 55 employees. For the company to continue to afford that, Willacoochee's other benefits, including disability and accident insurance, are only made available for workers to buy themselves. "Our major medical continues to go up, and instead of passing along that increase to our employees, we keep absorbing that in," Sparks says.