The ubiquitous “one-size-fits-all” tag in clothing is startingto give way to the more realistic “one-size-fits-most.” A similartrend is gaining momentum in the benefits industry, wherevoluntary products are addressing specific employeeneeds.

|

“The recent voluntary products, such as accident, cancer,critical illness and hospital confinement, emerged to help fillgaps not covered by major medical insurance,” says Rich Williams,senior vice president, growth markets, for Colonial Life inColumbia, South Carolina. “With health care costs increasing, manyemployers are moving to plans with higher deductibles and co-pays,leaving employees with greater financial exposure.”

|

Kathy O'Brien, vice president, voluntary benefits, for UnumNational Client Group in Chattanooga, Tennessee, has been trackingthe same trends.

|

“The interest in voluntary benefits has been on a steadyincrease for the past several years, but we are seeing more andmore interest in employee-pay products like accident, criticalillness and hospital indemnity,” she says. “More employers areinterested in voluntary benefits to supplement their benefitofferings to their employees, and it allows an employee to tailortheir benefits to fit their own individual needs.

|

“While there has been an increase in the popularity of thebenefits more related to health care, there is still a stronginterest in permanent life insurance products, which havehistorically been a key benefit for the voluntary business.”

|

This increased interest coincides with implementation ofthe Patient Protection and Affordable Care Act.

|

“We are seeing that employers are interested in providingemployees with more choice in their benefits and are askingemployees to contribute more to the cost of their benefits,”O'Brien says. “As deductibles for medical plans increase, voluntarybenefits are a nice way to supplement the out-of-pocket costs anemployee would experience with these plans.”

|

Opportunities for brokers

|

These changes present new opportunities for brokers who areprepared to take advantage of them, Williams says. As employerstake more responsibility for their health care, clear communicationand education are more valuable than ever.

|

“Most voluntary products aren't directly impacted by health carereform,” he says, “but employers and employees still need helpnavigating through the requirements, responsibilities and optionsof health care reform. Many of America's workers are taking ongreater responsibility for making decisions about and paying fortheir health care coverage and other types of benefits. They'llneed to be more knowledgeable about what they need.”

|

Selling voluntary benefits enables brokers to supplement lostincome from employer mandates and also diversify their productofferings. Williams urges brokers to seek a partnership with aprovider who can offer a diverse portfolio and the expertise tohelp educate their clients. He suggests looking for three things ina carrier:

  • “First, there's experience. Look for a company with history anda proven track record of success in the voluntary benefitsindustry. Many new players are entering the market because they seethe growth potential of voluntary benefits. However, very few ofthem can offer proven end-to-end benefit services.”

  • “Next, seek product options and service capabilities that meetthe diverse needs of your clients. Consider the services andstrategies the carrier can provide to enhance the service you giveyour clients. What does the carrier offer that can helpdifferentiate you from your competition? What can theyoffer you and your clients that can make a significant positiveimpact on your business and your clients' bottom line?”

  • “Make sure your partner has counselors who will be there toservice your account, year-in and year-out.”

O'Brien offers similar advice.

|

“Brokers should be familiar with voluntary benefit carriers andtheir areas of strength, not just the product details,” she says.“Timely claim payment and online services are important toemployees, and accuracy of billing and customer service isimportant to an employer. A broker's knowledge of services providedby a voluntary benefits carrier will help them be more consultativeand structure a portfolio that will be of benefit to their clientand their client's employees.”

|

Consolidating as many voluntary benefits as possible with thesame carrier can be helpful to employers as well as brokers.“Employees can file a claim for one of their benefits, and thecarrier could identify other benefits for which the employee mayqualify through a single claim intake,” O'Brien says. “Not allcarriers offer this service.”

|

Understanding, then meeting, client needs

|

Brokers also need to thoroughly understand what their clientsand prospective clients currently offer and how voluntary benefitscould fill any holes.

|

“Brokers need to be students of the business in order to be goodconsultants to their clients,” she says. “They need to understandhow the benefits coordinate with other benefits and the bestmethods for employee communication and participation so they canmake recommendations to their clients and the carriers who providethe overall best client experience. They can learn this businessfrom their carrier and enrollment firm partners. Having a goodunderstanding of the business will make them an invaluable resourceto their clients.”

|

“Engagement” is one of the key buzzwords in human resourcescircles these days. Employers place a high premium on ensuring thatworkers understand their options, make the right choices and thenuse voluntary benefits after purchasing them.

|

“There are many different methods of employee engagement duringthe voluntary benefits enrollment process, and a broker whounderstands these options can help customize a communication planspecific to their clients' needs,” O'Brien says “Pre-enrollmentmaterials such as electronic communications, mailings and flyersare generally available to share with employees to increaseknowledge and interest in the benefits. Many times, these tools areavailable through the voluntary benefits carrier.”

|

Perhaps the key takeaway message for brokers is that voluntarybenefits need to be part of a comprehensive, employee-tailoredpackage, not simply an add-on to traditional insurance. “Goingforward, we see voluntary benefits as an integral part of theoverall benefits solution for employees,” Williams says.

|

Brokers who understand and apply this concept will be in a goodposition to succeed.

|

“Brokers who help an employer understand the value of offering afull portfolio of benefits to their clients become more of atrusted advisor to their clients and are able to retain that clientfor a longer period of time,” O'Brien says.

|

|

Basics for businesses

|

What's in it for me?

|

This may be the most common question employers ask their humanresources professionals about voluntary benefits, and it also maybe the first question HR people ask their broker.

|

Brokers should have a ready answer.

|

“There are many advantages to including voluntary benefits in anemployer's portfolio of benefits offered to their employees,” saidKathy O'Brien, vice president, voluntary benefits, for UnumNational Client Group. “Voluntary benefits allow an employer tooffer more benefit choices to their employees without increasingthe amount of money spent on employee benefits.

|

“Because each employee has unique benefit needs, more choiceallows an employee to tailor their benefits and spend their ownmoney, through the ease of payroll deduction, for those benefitsthat have the greatest value to them and their families. When anemployee values the benefits they receive from their employer, theemployer is more likely to retain that employee.”

|

Voluntary benefits can provide significant bang for theemployee's buck, says Rich Williams, senior vice president, growthmarkets, for Colonial Life.

|

“Voluntary benefits offered at the worksite provide significantfinancial protection, and since premiums are typically deductedfrom an employee's paycheck, often on a pretax basis, they're veryaffordable,” he says. “Many types of voluntary coverage can bepurchased for as little as 90 minutes of an employee's pay.

|

“Unlike major medical insurance benefits, voluntary benefits arepaid directly to policyholders, so they can use the money whereit's most needed—whether it's for out-of-pocket medical costs, to make a car payment orto pay the mortgage.”

|

Brokers need to keep in mind that even a longtime client fortraditional benefits may do some comparison shopping for voluntarybenefits. Even in the best of relationships, brokers must be ableto sell their capabilities.

|

“A client should ask their broker for client references” O'Briensays. “A client who is happy with their existing broker andvoluntary benefits carrier and is willing to share their experiencewith another client is the best way to know if you are getting themost knowledgeable broker and the best overall client experience.”– Goforth

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.