Outside the portfolio

Every broker is familiar with the contents that make up the standard benefits portfolio. Core packages and various voluntary products such as short term disability, critical illness, whole life and cancer insurance are common. It's imperative to have these and other similar products just to keep up with the competition.

Most want to separate themselves from the pack even further. An effective way many benefit specialists manage to do this is by including products that might not classify as a workplace benefit.

With the growth potential of voluntary benefits, a growing number of insurance carriers and non-insurance companies have begun to embrace payroll deduction as an effective way to sell their products.

While many of these entries can fit into today's standard benefit model, many do not. With everything from the ability to buy computers through payroll deduction, to concierge and travel services, there is a plethora of alternative benefits already on the market.

Opinions on these emerging product lines vary widely.

"It takes away from the primary benefits," one producer said. "There are only so many dollars to spend."

Another advocated the practice, arguing, "It brings seats to the table, which allows us to present an entire benefit package."

Others remain stranded in the middle, saying, "They can be an added benefit, but only as a second or third option or a re-enrollment. Get health insurance, disability and critical illness in the case first."

Evolution takes time

When looking at a new benefit -- one outside the norm -- today's odd product could be tomorrow's common benefit. Some of today's most popular products started out as peripheral offerings. For example, critical illness once drew frowns from many as something too hard to explain in a 15-minute enrollment. Life insurance policies with critical illness riders also drew cries of protest as too radical.

One product quickly becoming accepted in the broker's portfolio is legal insurance. The majority of brokers once considered legal plans as inappropriate for the workplace, an opinion that's clearly changing.

"Legal plans have been an essential employee benefit among those corporations that provide an array of benefits for years. Employers of all size companies have now realized how much time and money employees waste looking for the right lawyer to handle their legal problem," says Robert Heston, president and CEO of Houston-based Legal Access Plans.

In fact, some brokers and other insurance professionals recall when payroll deduction itself earned derision as a superfluous addition to core benefits and was dismissed by more serious insurance people.

As times change, and the market evolves, what becomes accepted by the insurance professional as a legitimate benefit changes. The market generally alters that perception, but the canny benefit broker can help determine where the curve leads. After all, had a few brokers not taken the chance on a term life insurance product with a critical illness rider, or recognized the wisdom in offering supplemental insurance benefits through payroll deduction at work, HR directors probably would not have been so eager for it.

The growth of a product from obscurity to the standard platform tends to follow a pattern of trial first by adding it at re-enrollment or as secondary or even third option -- before moving it into the initial enrollment or as a lead product.

The overriding factor with most brokers, however, is not only how well received the product is, but that it is a valuable part of an employee's well being. One would be hard pressed to find a broker that would offer cartons of cigarettes as part of their payroll deduction package even though they might get decent participation.

The growing number of different products in the benefits arena gives the broker that is trying to differentiate himself from the competitor a ripe opportunity. If the broker is not judicious, however, and tries to use everything that crosses their desk, they might just paralyze themselves, and their clients.

Paul Crow and William Allison, president and vice president of Crow Allison and Associates, were early proponents of critical illness and believe in diversification, but too much can dilute the broker's influence.

Trend watchers

Industry trends often can be a good indicator as to what may have some success with clients.

For example, as the call in the industry for consumer-driven health care continues to grow, many alternative benefits are appearing. One innovation, membership into a nationwide chain of massage centers, fits into this category.

John Leonesio, chief executive officer of Scottsdale, Ariz.-based Massage Envy, believes he can boost the company's near $100 million in annual sales by jumping into the benefits world.

"We believe we're a good fit for insurance carriers, benefits brokers, EAPs and TPAs. We have had HR directors and brokers informing us that massage therapy is now part of their group benefits plan, and we feel our program can help benefit brokers and the like to retain their clients as well as draw new ones. We can provide an additional marketing tool," Leonesio says.

According to the American Massage Therapy Association, this multi-billion dollar industry is the fastest growing segment of the U.S. wellness industry. Many carriers work with other benefit providers to embed products such as these with their own. This approach provides an easy entry point for additional services that might otherwise struggle to gain acceptance with the broker community.

Societal trends outside the industry also can determine success inside it. There is a good deal of buzz about identity theft in the headlines and some brokers believe that helping defend against it will be a requested and an increasingly popular product.

"Identity theft is a huge problem in this country, if not worldwide," Allison says. "As people learn more about the dangers, identity theft protection is going to be one of those things everybody is going to want at enrollment."

More and more companies showing up at trade shows today are touting identity theft protection products.

The benefits market remains fertile ground for non-traditional opportunities. It is hard to predict whether identity theft, massages, computer sales, pet insurance or something else entirely will become the next successful mainstream benefit. What is easier to figure out, however, is that as the convergence of core and voluntary accelerates, new companies, concepts and services will continue to flood the marketplace.

By embracing innovation, discovering new concepts and introducing products that will eventually come into their own, a benefit broker can differentiate himself from his competition, get a foot in the door and boost the traditional product enrollment.