There's been a lot of talk about voluntary benefits, and for good reason. Brokers should be concerned about voluntary. But there’s also plenty of value if they approach the market understanding the hurdles to overcome as well as the opportunities.

First, brokers should be aware the premium revenue dollars involved in voluntary plans are much lower than medical plan revenues. At a quick glance, medical coverage is worth several thousand dollars per employee, whereas voluntary plan premiums are typically hundreds. Are these lower revenue dollars worthwhile? Yes, provided they result in good things for multiple audiences.

For the employee, voluntary benefits provide financial security for workers and their families at a reasonable cost, leveraging the convenience of access at the workplace and payroll deduction premium processes. For the employer, their benefits offering is expanded, and valuable protection is available. For the broker, their role is expanded in a new direction and their organization has an additional source of commission revenue.

But the voluntary product can be confusing because there are so many options, commission schedules and enrollment methods to be considered. Brokers should carefully select product providers that fit the gaps in the employer’s benefit plans and employee needs. In general, commissions have a broader range in voluntary than in employer-financed group plans (ranging from very low-level group commission rates to very high front-end whole life type rates). In general, the compensation plan selected by the broker should take into account the price point for employees, the scope of enrollment expenses, product needs, and so on.

Understand the importance of creating and installing a voluntary plan. All too often brokers focus on products but not process, and that’s when it’s likely that the plan will fall short of expectations. There are many resources available from carriers, enrollment communications companies and voluntary specialists to help create an effective plan. It’s also important that a voluntary campaign is not a single enrollment event, it should be part of an ongoing benefit management program.

Let’s consider two case studies. A food service specializing in sports arenas presented the enrollment challenge of broadly dispersed employees (multiple locations in multiple states) compounded by a perception on the part of management that their associates didn’t need voluntary life insurance. Along with the broker, we convinced the client to let us create an enrollment campaign using tools including pre-enrollment communications, personalized enrollment materials and bilingal enrollment sessions. The result was 47 percent participation, and best of all, the organization’s benefit management team became believers in voluntary. 

The second is a grocery store chain with unsuccessful past experiences. We used our online system, plus a series of planned communications to employees, accompanied by careful tracking of enrollment results. The campaign included three products, and the resulting participation was 47 percent on voluntary term life, 45 percent on voluntary short term disability and 36 percent on voluntary long term disability. Total placed premium on each case was well over $200,000.