The voluntary business is thriving and willcontinue for the foreseeable future. Brokers plan to start orexpand their voluntary efforts across the board as 100 percentemployer-paid business shrinks and gives up benefit marketshare.

As the industry marches forward, our definitions need to keeppace with marketplace developments.

In the early 1990s, Eastbridge created the standard industrydefinition of voluntary as “benefits that are 100 percentemployee-paid and paid for through payroll deduction.” While thatdefinition will work for the majority of sales for the next severalyears, the growth of defined contribution strategies will challengethe industry to update the definition when the time is right.

Consider a private exchange with a defined contribution strategyas the driver. The employee signs in, and sees the employerallocation ($100 a month for example). The employee then choosesher medical plan, disability, and maybe life and CI. The total costmight be $150 per month, with the remaining $50 to be payrolldeducted from her paycheck.

Do we allocate the employer portion to medical first,considering it employer-paid, and consider the rest to be voluntarycoverages? Or do we spread the premium, considering all coveragesto be contrib? And in that case, since none are 100 percentemployee-paid, are none of them “voluntary”?

The key could lie in the decision-makingprocess. The essence of voluntary is that the employee is choosingwhether to make a purchase, and is then allocating dollars that shecould have spent on other products, to pay 100 percent of the cost.Regardless of whether those dollars come directly from the employeror whether they pass through the employee's paycheck, they arestill hers to spend (or not), as she sees fit. By that definition,all products offered in a defined contribution environment become,by definition, voluntary.

Brokers are planning a major resurgence—either through initialentry or by doubling down on current efforts—into voluntary, whichwill certainly add to the continuing growth trajectory of voluntarysales.