Group health benefits brokers used to look at Gary Ware withsympathetic eyes.

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As traditional brokers saw it, said Ware — a voluntarybenefits specialist — selling voluntary products is alabor-intensive task that requires scores of individual sales tosee a meaningful return on all of that effort.

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“The perception has always been that those of us specializing inthe voluntary space have a much harder sale to make, and a muchharder time making a good living,” said Ware, a voluntary benefitsspecialist.

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But in the modern health care market, that perception could notbe further from the truth.

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Ware provided his career as evidence.

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After spending more than two decades rising through the ranks ofone of the largest voluntary providers around and ultimatelyoverseeing sales and distribution for the entire state ofCalifornia, he retired when he was relatively young

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“I knew I would go back in some capacity, but wasn’t sure inwhat way,” said Ware.

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About seven years ago, that way revealed itself when theprincipal of a successful independent insurance agency with ahealthy book of major medical group business approached him. Theyneeded help developing their voluntary, ancillary and supplementallines of business.

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And it was there that Ware’s next venture was born.

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The Ware Group, a Champaign, Ill.-based independent brokeragethat specializes in voluntary, ancillary and supplemental insuranceproducts delivered through the worksite, now services more than 500group accounts, which range in size from five to 6,000 lives.

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In one sense, brokers were right in their original view of thevoluntary market. It is labor andinvestment-intensive, said Ware. But “there is so much money to bemade in the voluntary market.”

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The “perfect storm” of the Affordable Care Act and consumers’mounting out-of-pocket health care costs have forced group healthbrokers to reexamine the value proposition of the voluntary market,not only for consumers and sponsors, but also for theiragencies.

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“Brokers know they can’t ignore the voluntary market,” saidWare. “They want to do this. But the question is, ‘Can they?’ ”

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Strategic partnerships

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The Ware Group’s success has been built on its partnerships withgroup brokers.

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When sponsors choose to partner with his team, they are notpicking a specific carrier or a specific voluntary suite ofproducts; they are selecting a provider of turnkey voluntarysolutions and services.

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That involves far more than simply placing a voluntary agentalongside a group broker during enrollment season, said Ware.

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“With voluntary products, it is absolutely essential for brokersto get out of the mindset that you are selling a product to makemoney, and transition to a mindset that asks what makes sense foremployers, what makes sense for participants, and what are the mostresponsible products to offer,” he explained.

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Failure is all but guaranteed if voluntary brokers can’tsimplify life for internal human resource teams. While thevoluntary pitch can be attractive to sponsors, who often don’tcarry contribution costs, enrollment can be time- andlabor-consuming.

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Mitigating that reality is the voluntary specialist’s firstjob.

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“The key is to reduce the work for employers and HR specialistsso they can focus on their core responsibilities,” said Ware.

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To do that, Ware employs a sales team, a separate enrollment andimplementation team, and another back-office entity that givesparticipants a human touch point when claims arise.

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In all cases, Ware said, he relies on seasoned voluntary pros.For the sales force, it’s essential to understand the nuances andvariances between policies from different providers. From there,the sales force coordinates with the group broker partner to fullyunderstand major medical coverage.

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The latter is the only way to ensure they’re presentingparticipants with the most responsible suite of voluntaryofferings. Ware uses the example of accident policies. Most ofthose policies are sold as “24-hour coverage” — meaning workershave protection both on and off the job.

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But that can be unnecessary compared with off-the-job-onlyprotection, as existing property and casualty and workers’ compcoverage usually covers workers adequately while they are on thejob.

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Ware said most of the accident policies his group markets areoff-site-only policies. That means employees are not at risk ofbuying redundant coverage, which reduces their costs and ultimatelyencourages more participation in accident policies.

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Keep accounts fresh

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Upon enrolling a group, Ware’s team leaves the technology to thesponsors, which is to say that HR teams have the technologicalcapability — at no new cost — to address ongoing enrollmentneeds.

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Beyond that, Ware deploys a separate sales force to follow upwith employers, creating on-site touch points for participantsafter open enrollment and throughout the subsequent year. Thatapproach allows employers to stay on top of the needs of new hiresand address portability questions when workers leave.

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By being physically present, Ware said his team limits the laborfor internal HR departments and creates new opportunities to addlives to voluntary lines.

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“You have to keep accounts fresh by maintaining a high number oftouch points with sponsors and enrollees,” said Ware, who addedthat his agency earns a substantial amount of sales revenue fromfollowup after open enrollment.

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But more importantly, said Ware, is the activity afteropen enrollment, which in turn limits carriers’ adverse selectionrisk. That results in more favorable price points on voluntarypolicies.

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“Because we get deeper penetration we run into less adverseselection,” he said. “Carriers love that, and it’s why we can getguaranteed issue policies for groups with as few as two enrollees.Carriers want to work with us because we offer a full-serviceenrollment capability.”

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In the end, having a full-service capability makes groups withfewer than 50 lives more attractive to voluntary carriers, who havehistorically strayed from small groups to avoid higher adverseselection risk.

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No 1-800 numbers

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For all the Ware Group invests in implementation and follow-upservices, the agency’s back office customer service departmentyields the most references from policyholders.

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“The value in getting workers answers to their questions withoutputting them through the call center wringer has proven to be arevenue generator for us,” said Ware.

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His bottom line: To make money in the voluntary market, one hasto spend money.

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Some brokers can do both core medical and voluntary, he said,but many are happy to have a voluntary partner with turnkeycapabilities.

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“We can split 50 percent of eligible compensation with the majormedical broker and still make money. And of course they are addingto their revenue stream without making any investment,” saidWare.

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“It’s a smart move for a lot of brokers, and it makes for a goodmarriage,” he added.

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