For too many benefits and HR professionals, best of breed means lowest cost. However, price or premium rate is really only one piece that must be considered.

In finding a best of breed voluntary product, look at a wide variety of factors in addition to price. After all, what good is an inexpensive product if it doesn't address the real needs of the employee?

The first step is to vet the carrier and look at factors not directly related to the product itself. For example: 

  • What is the carrier's history of claims payments? Do they pay claims quickly? Do they try to find ways to pay legitimate losses?

  • How are the company's administrative processes? Do they have processes that make it easy for an employer to manage the payroll deduction and remittance process?
  • Is the carrier stable? Ratings are important, but so is the carrier's commitment to the voluntary market.

This first step is essential for all cases. After narrowing the selection based on the responses to the above questions, the broker is now ready to look at specific products. Here the evaluation of the best of breed product may vary, depending on the characteristics and needs of each specific account. The questions in this step include:

  • What benefits are offered? What are the specific benefit provisions, including any exclusions and limitations? Are there any innovative benefits or features that should be given weight in the decision?

  • Is the price competitive? The price doesn't have to be the lowest but should be comparable to other products on the market. Look at the carriers' history regarding rate increases. Do they start low and then raise rates to "catch up," or is the plan guaranteed renewable (where rate increases must be filed with the insurance department on all like policies)?
  • What type of underwriting is the carrier offering? Is it guaranteed issue? What are the eligibility requirements? What are the participation requirements?
  • Are there continuation options for employees should they leave the employer? Is the plan portable? At what cost and under what circumstances?

With smaller benefits and HR staff these days, employers are depending on brokers and in-house benefits managers more than ever to bring them the right solution from the right carrier. Make sure you look beyond price as you bring the best of breed voluntary products to the table.

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