You’ve heard it time and time again: Small businesses drive the American economy.

But are you underestimating the role that the nation’s smallest businesses can have on your own financial wellbeing?

Small employers (those with between 10 and 100 employees) account for 92 percent of all American businesses and employ more than 27 million people, according to the U.S. Census Bureau.

While these employees have the same needs as their larger-firm counterparts for financial protection, they are less likely to get them in the workplace, as many employers never offered them and others have started sending employees to the health exchange.

Only 54 percent of the country’s smallest employers (those with between 10 and 50 employees) offer at least one voluntary product (including life insurance, accident insurance and disability insurance). That figure shoots up to 86 percent for employers with between 50 and 100 workers, according to Eastbridge Consulting Group. [i]

But opportunities abound, as both groups said they would be looking to add voluntary benefits in the workplace in the coming years. Some 20 percent of small employers (50 to 100) said they were likely to offer a new voluntary benefit and 21 percent said they would likely move a current benefit to voluntary. For very small employers (10 to 49), the numbers were 11 percent and 15 percent, respectively, according to Eastbridge. i

Employers surveyed say they offer voluntary benefits to employees in order to achieve cost savings to the company (as compared to having to pay for these benefits), to respond to employee interest in the products, to take advantage of the ease of administration and to aid in recruiting and retaining employees. i

The top voluntary product offered by small employers is accident coverage. But only 47 percent of small employers and 26 percent of very small employers offer this type of insurance. Other top benefits options at small employers are critical illness, term life, hospital indemnity, short-term disability and accidental death and dismemberment insurance. At very small employers, dental coverage and long-term disability are also popular offerings. i

Voluntary benefits at these small employers are big business. Voluntary sales to accounts with 100 or fewer employees totaled $1.56 billion in annualized sales premium in 2013, with $811 million coming from firms between 26 and 99 employees, according to Eastbridge. i

“This presents a huge opportunity for advisors who are able to demonstrate their value,” said Mary Boyce, associate analyst at LIMRA Insurance Research. “Helping both employers and employees understand the options available within and outside the exchanges will be a new way for advisors to grow their business.” ii

More importantly? Small employers know they need your help and brokers are poised to bridge that gap and find success in helping smaller firms.

A huge percentage of business owners (94 percent) with fewer than 100 employees say the need for advisors is remaining strong or increasing, according to LIMRA[ii]. But only half of these firms currently use advisors for business or personal needs.

Choosing the right benefits partner is key for brokers to take advantage of the great opportunities for voluntary products in the small-case market.

Small employers are looking at a number of factors when choosing a carrier for their benefits. Price is often cited as the top factor in choosing a benefits partner. But it’s important to keep the other factors in mind as well, including employees’ ability to submit claims online, employees’ online access to claims forms, carrier reputation, and online access to claims status and documentation.

But you have a list of things you’re looking for as well, including competitive compensation schedules, quality VB products unaffected by PPACA, and turnkey benefits counseling and enrollment services.

Online access is clearly important, but technology can be critical in a variety of other ways. Be sure you understand what possible benefits partners can do to help you:

Ease the burden of finding potential new customers through apps and online access
Save you time and effort by helping you communicate and enroll employees into enrollment solutions while you can focus on finding new business

Picking a partner that develops products and services that are simple, modern and personal can be key to satisfaction for employers, employees and your wallet.

About the Author

Gil Youmans is the director of small market solutions at Colonial Life & Accident Insurance Company. Colonial Life is a market leader in providing financial protection benefits through the workplace, including disability, life, accident, dental, cancer, critical illness and hospital confinement insurance. The company’s benefit services and education, innovative enrollment technology and personal service support more than 80,000 businesses and organizations, representing more than 3 million of America’s workers and their families.

For more information about Colonial Life’s products and services, contact Youmans at 803-678-6574, e-mail him at jyoumans@coloniallife.com or visit www.ColonialLife.com. Or connect with Colonial Life at www.facebook.com/coloniallifebenefits, www.twitter.com/coloniallife and www.linkedin.com/company/colonial-life.

Instant Insights /

For brokers, very small businesses can mean very big bucks

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