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Posted on February 3, 2017 by in Business, Employee Benefits

Unfortunately for American consumers and their families, identity theft continues to grow. The good news is that more employers are choosing to protect their employees and their business by including identity protection in their employee benefit plans. In fact, Willis Towers Watson found in a recent survey of employers that 70% will be offering identity protection by 2018, making it the fastest growing voluntary employee benefit, out pacing critical illness, long term care insurance and many others.

This is an important trend that we wanted to analyze closer for employers. Over the past few months, we’ve been working alongside Employee Benefit News (EBN) – a critical resource relied on by benefit professionals to navigate the complexities of employee benefit planning and delivery. In its research efforts, EBN uncovered five drivers that seem to be fueling this trend.

5 Reason’s Why Identity Protection is THE Hot Voluntary Employee Benefit

Here are the top 5 reasons, which I believe are critical factors for employers to consider as they look to improve their employees’ work-life-balance, reduce stress levels, and increase productivity:

  1. It’s a serious, escalating problem
  2. There are high-value benefits for employees; and
  3. …There are clearly important benefits for employers too
  4. Identity Theft Protection reduces liability in the event of a data breach
  5. It easily fits into an overall employee benefit strategy

The Threat of Identity Theft Has Real Impact on Your Employees

Unfortunately, the numbers show that the growth in identity theft is real. The number of incidences is staggering – 17.6 million Americans impacted annually per the Department of Justice. And the range of identity theft scams is widespread from tax return to familial to medical fraud – with average losses incurred by victims of $1,343. The victim statistics are alarming, and the fear of identity theft impacts everyone in the loss of peace of mind.

This anxiety is amplified by the frequent mainstream media coverage that can’t be avoided. Recent examples include the daily mention of cybercrime’s potential impact on the Presidential campaign and many stories in the national news like this recent coverage of debt collector fraud as a result of identity theft covered on ABC Evening News. While this fear is a real and growing issue, it highlights one of the unique benefits of identity protection. And that is that it is exactly that – protection – in other words it is a preventative benefit as opposed to a corrective one. This benefit can reduce the number of victims, the losses incurred and can improve peace of mind.

Employee Identity Protection is also Great for Business

In addition to protecting business from productivity loss due to an employee identity theft, there are several additional strategic benefits to businesses. One that resonates very well with senior management is the reduction of business liability in the event of a data breach. The FBI reports that the data breach 2016 count, as of November, was 25% ahead of last year’s count. And unfortunately, the New Year brings with it additional risks such as last year’s W-2 phishing scheme. By putting employee identity protection in place, the impact of a data breach can be significantly reduced. I know firsthand that the avoidance or reduction in liability as well as avoidance of damage to the brand is something C-level and legal executives are very excited about.

Another important benefit that aligns with the strategic goals of many HR executives that I have met with is cost containment. In 2016, the IRS began allowing a tax deduction to employers providing identity protection to their employees. While identity protection was already very cost competitive with other voluntary benefits, this ruling has provided a true cost advantage. This is further amplified when you also consider the soft costs of rolling out a new benefit. When you work with the right provider, identity protection is turnkey and fast – specifically it’s easy to educate, onboard, and roll-out as the entire process and solution is already online. And, all of this can be done any time of the year and is not dependent on open enrollment.

Given the employee demand and the ease of sign up, identity protection significantly outpaces the uptake for other voluntary benefits. This means that for organizations that consider return on investment as part of their success criteria, identity protection, with its lower cost and higher employee uptake, provides a higher return.

It’s a challenging time for HR and Benefits executives – trying to balance the goal of attracting and retaining the best people with the need to contain costs. In working with Employee Benefit News, it was our intent to help HR and Benefits executives with this challenge by helping them make a more informed decision regarding their benefit options. We truly hope you find this report helpful and would love to hear your feedback.

5 Reason’s Why Identity Protection is THE Hot Voluntary Employee Benefit
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