Though employers with more than 2,500 employees typically account for the largest volume of worksite voluntary benefit sales, participation rates are higher among middle-market employers, research shows.

The most penetrated market segment for voluntary benefits in 2012 was the 500-999 employee segment, according to Avon, Conn.-based Eastbridge Consulting Group Inc., a marketing advisory firm serving insurance and financial services organizations in the United States and Canada.

The second-highest penetration rate was the 1,000-2,500 employee segment, Eastbridge's annual “U.S. Worksite Sales Report” showed.

These higher penetration rates are due, in part, to the fact that midsize employers typically provide more one-on-one education and communications to employees during open enrollment, said Dale Alexander, president of Woodstock, Ga.-based Alexander & Co., a member of United Benefit Advisors L.L.C., a network of more than 140 independent employee benefit advisory firms serving mostly middle-market clients in North America and Europe.

“Smaller and midsize employers do have a tendency to perform better than larger groups,” said Dennis Healy, vice president of group sales at ARAG Insurance Co., a Des Moines, Iowa-based provider of legal insurance. “They usually have more comprehensive communications and a central location where employees talk around the water cooler,” he said. “When you've got greater geographic dispersion, communication gets more difficult.”

At midsize employers, “voluntary benefits are sold, not bought,” said Craig Hasday, chief operating officer of New York-based Frenkel Benefits L.L.C. “Most middle-market employers have in-person enrollers,” he said.

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Moreover, “the human resources people take a much more one-on-one direct interest.” In some cases, “they've seen situations where these benefits have been needed,” Mr. Hasday said.

“Typically, the middle market has adopted voluntary benefits faster than the jumbo market,” said Beth Grellner, St. Louis-based co-chair of the national voluntary benefits and services group at Towers Watson & Co.

Certain “gap policies,” such as cancer or critical illness cover and hospital indemnity, are more likely to be offered by small and midsize employers, according to the “2012 National Survey of Employer-Sponsored Health Plans” by Mercer L.L.C. (see chart).

A breakdown of data from that survey provided by Mercer to Business Insurance shows that cancer/critical illness insurance is offered by 37% to 46% of midsize employers. However, only 30% of jumbo employers, defined as those with 5,000 employees, provide cancer/critical illness insurance as a voluntary benefit.

In addition, hospital indemnity insurance is offered by 20% to 26% of midsize employers, but just 12% of jumbo employers.

Mike Thompson, Atlanta-based small and mid-market practice leader at Mercer, said the data reflects “simple economics.”

“Smaller employers are frequently not able to match the breadth and depth of benefits that larger employers might. As a consequence, mid-market and small-market employers look to voluntary benefits as a way to offer broader choice,” Mr. Thompson said.