Voluntary benefits have been a growing trend for almost 15years. One way employers have responded to the poor economy andrising health care costs is by shifting the costs of certainbenefits to their employees.

According to a 2011 LIMRA study, 30 percent of U.S. employersare considering adding a voluntary benefit to replace employer-paidand contributory benefits within the next two years.

Most likely, the concept of employee-paid benefits isn't new toyou. You may be selling some now. What you might not realize is themagnitude of this marketplace and how much it can impact yourbusiness.

Follow the money

Voluntary premiums are growing as much as 10 times faster thanemployer-paid premiums, according to 2011 analysis by McKinsey. Infact, voluntary benefits are estimated to contribute more toindustry profits than those that are employer-paid by 2015. Inother words, the majority of the marketplace could flip in lessthan three years.

As a producer, you have a tremendous opportunity to guide thetransition from employer-funded benefits to a more consumer-centricapproach. 

Helping both employers and employees with this transitionrequires an approach that's consultative and product savvy, whichincludes finding ways to ease the administrative burden on theemployer and educate the person ultimately making thepurchase. 

Meet the new boss

When aiding a transition from traditional benefits to voluntary,you must consider the “new boss”—the employee.

Your new boss requires a more individualistic and educationallyfocused approach to their protection needs. Employees consistentlypoint to benefits communications as an area that needs to beimproved. 

For example, the Hartford's 2011 Benefit Landscape Survey findsonly 25 percent of workers completely understand disabilityinsurance. You, as a producer, can help employees understand theirdual protection needs—the need to protect both their physical andfinancial well-being. 

In order to better assist your employer client, you shouldunderstand their benefits challenges.

Challenge 1: Benefits administration in the face ofreduced HR support.

Employers have reduced their HR teams. That means employerstoday require more administrative support for roles traditionallyplayed by their HR personnel. They're looking to carriers andthird-party administrators to ease this burden by taking onresponsibilities, such as benefits enrollment, billing and employeecommunications.

The real key here is data management. The volume of dataavailable to employers today can drive a much more efficient andaccurate benefits administration. By recognizing these potentialadvantages, more employers are making a concerted effort to connecttheir digital environment with that of their vendors for gains inefficiency.     

Challenge 2: Connecting with employees, particularlyremote workers.

The time and effort involved in communicating with employees isa real challenge for employers of all sizes, especially those withremote workers. Forty-five percent of the U.S. workforce holds ajob that is compatible with at least part-time telework, accordingto a 2011 study by Telework Research Network. The trend is helpingdrive the need for digital communication tools, as well as the needfor targeted communications.

Your role

Market trends all point to voluntary benefits as a strong choicefor brokers who are interested in growing their book of business.The question is, are you ready to take advantage of this trend?

If you said yes, one of your first steps would be to carefullyassess your book of business to determine where you will have thebest opportunities.

Consider these questions:

How many of your current accounts are considering reducing theirbenefits package due to the economy and/or health reform?

Are your clients' benefit plans competitive with the industry?To make the benefits package more robust, are your clients open tooffering voluntary benefits to attract and retain employees?

Have your clients evaluated the entire benefits packageholistically? A well-rounded benefit program should include thebasics, such as life, disability and medical gap coverage thatcomplement employer-funded coverage?

Once you've targeted the right types of employers, the next stepis careful planning with their benefits teams to ensure successfulimplementation and communication strategies. From there, asuccessful voluntary benefits program is defined by strong employeeparticipation in the benefits being offered.

Keys to successful participation include:

Targeted education campaigns. Your carriershould work with you to determine which segments of the employeepopulation are the best targets for voluntary benefits. Thisanalysis can be backed by a marketing campaign that includesdynamic educational tools accessible via e-mail or intranet andsupporting testimonials that affirm the buying decision.

Communication. The most successful cases arethose where a plan of clear consistent communications is acollaborative effort between employer, producer and carrier. Withgeographically diverse work forces, a range of schedules and afocus on productivity, more and more often digital communicationstools supplement the traditional group meetings, benefit fairs and“lunch and learns.” This enables greater flexibility and morepersonalization.

Simple and flexible enrollment. Be sure toexplore whether paper or online enrollment best meets employees'needs. Employees prefer—and often expect—online enrollment. Theirexpectations also include a personalized approach on best-in-classplatforms that are easy to navigate.

You can help by partnering with a carrier that cansimultaneously address the employer's needs, as well as theemployee's need for integrated educational tools and communicationsthat help them make informed choices.

Mike Fish is vice president of product, marketing andvoluntary benefits for The Hartford's group benefits. He can bereached at [email protected]or 860-843-6249. He will be speaking at the Benefits SellingExpo in May.