Few will be surprised to hear that voluntary market sales are onthe rise.

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In April, LIMRA’s review of 46 voluntary insurance productproviders showed sales increases for the fifth straight year. Halfthe companies surveyed said sales rose by 12 percent or more.

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In part, the brisk pace of voluntary sales tells the story ofthe United States’ post-ACA group health landscape.

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But peel back a few layers, and the numbers show something else:As more cost-conscious employers welcome voluntary products intotheir benefits packages, group plan participation overall remainsstagnant.

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In 2010, LIMRA’s data showed that voluntary benefitparticipation rates increased in 27 percent of the groups surveyed.Four years later, it had increased in 30 percent — relatively flatgiven the overall uptick in voluntary sales. And 9 percent of firmsactually reported less participation. This is gathered inthe association’s “2015 Keeping up with the Times Study.”

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The report’s three-year projection shows that 27 percent offirms can expect higher enrollment numbers, while 11 percent maysee less participation.

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So does this mean that the voluntary market has reached asaturation tipping point?

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Absolutely not, says Nick Rockwell, a senior consultant atConnecticut-based Eastbridge Consulting Group Inc. In fact,Eastbridge’s 2015 U.S. Voluntary/Worksite Sales Report shows salestopping the $7 billion mark for the first time in 2015 -- a 3.6percent increase over 2014. But, he adds, the numbers do suggestthat brokers will have to change their marketing strategies to winnew business.

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Eastbridge hired Rockwell, who previously ran LifeLock’sbenefits solutions group, at the beginning of 2016 to helpvoluntary providers and new market entrants develop and implementmore effective worksite enrollment strategies.

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Seven years ago, most independent group brokers eschewed thevoluntary market. But as the ACA began to encourage more healthcare consumerism, traditional brokers were forced to adapt – andquickly – to stay viable.

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As a result, 60 percent of voluntary products today are sold bytraditional group health brokers. “Growth in voluntary sales in thenext five years is not going to come from more brokers entering thespace—most already offer the products,” says Rockwell.

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Instead, it will be enrollment expertise that moves thepenetration needle.

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As they entered the voluntary market, traditional brokersbrought traditional marketing strategies. Chief among these tacticsis the so-called “takeover market” -- brokers approach sponsors,offer to take a plan to market, and then attempt to win thebusiness on price alone, Rockwell explains.

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In a commoditized benefits world, that strategy can work. But asthe health care market evolves and a growing number of voluntaryoptions emerge along with the need for more nuanced benefit design,the takeover approach has failed to move the enrollment needle.That, in turn, explains the lackluster participation rates, saysRockwell.

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“When a broker competes to take over a group’svoluntary business, the enrollment, in many cases, has alreadyoccurred,” says Rockwell. “So competing for that business did notnecessarily require a high level of enrollment sophistication. Ineffect, taking over a group’s voluntary business involved aconversation with only the employer, and not the employees.”

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To grow voluntary business in the future, then, brokers willneed to revise their approach.

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“Executing a sophisticated and efficient voluntary enrollmentprogram is not an easy thing to do,” says Rockwell. “Ultimately,voluntary benefits are not bought, necessarily; they are sold. Thatmakes for a very different proposition from the marketing oftraditional group benefits.”

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From Rockwell’s perspective, brokers will have to becomestudents of enrollment efficiency. In order to grow and keepbusiness, in other words, they’ll need to improve their ability toengage participants and maximize enrollment.

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A product-by-product breakdown shows that voluntary enrollmentlargely varies by group size.

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LIMRA’s data shows that vision insurance plans with 10 to 99participants experienced 19 percent uptick, compared with 35percent in plans with 100 to 999 participants.

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Life insurance participation was only 17 percent in the smallplan market, compared with 48 percent in plans with more than 1,000participants.

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Even for voluntary dental, which experienced the highestpenetration rates among all plan sizes, total participation wasonly 24 percent, according to last year’s numbers.

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It stands to reason that larger plans have greater resources andtime to invest in technology that delivers comprehensive benefitsinformation, resulting in higher participation rates than smallerplans.

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That said, the emergence of tech-based solutions should helpbrokers deliver efficiencies to small plans, says Rockwell.

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“What’s worth doing is worth doing right,” he says. “Employeesare paying more for their benefits and they want more choice — thatmuch is clear. But without the education needed for them tounderstand all of their voluntary options, they will not buy.”

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One recent study from Transamerica shows that 47 percent ofemployees have not been offered a new voluntary product since 2010,when ACA was first passed. And now that small groups are requiredto comply, there’s an even greater opportunity for brokers todevelop new markets: Ninety-eight percent of the country’semployers have fewer than 100 workers, accounting for 35 percent ofthe labor force, according to the U.S. Census Bureau.

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“We are definitely seeing signs that traditional brokers aregetting better with their enrollment strategies, but theirevolution into the voluntary market is still early,” notesRockwell. “The key will be delivering education to participants.When brokers get that, we’ll see participation rates on therise.”

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.