In the 15-plus years he's sold voluntary benefits, Joseph Alfonsi has seen industry jargon evolve along with tectonic shifts in the health care marketplace.

Take the concept of bundling. Depending on which broker you ask, Alfonsi said, you may get several different definitions of this approach.

Traditional group health brokers consider “bundling” the act of pairing major medical with ancillary products like vision and dental.

Brokers looking to tap into the voluntary market – a market that, in 2015, topped $7 billion in sales for the first time ever, according to Eastbridge Consulting data – view “bundling” as offering a packaged lineup of voluntary products, all from one voluntary carrier.

To Alfonsi – co-founder of TriBen Insurance Solutions, a niche Philadelphia-area consultancy specializing in building and administering supplemental and voluntary benefits programs — bundling is an old concept that's taken on new meaning in today's contemporary benefits market.

ACA forces bundling in new direction

After a career in law enforcement, Alfonsi was hired by Unum in 2001, where he was immediately thrown to the wolves: As a rookie, he was expected to write nearly $500,000 in premium his first year — nearly twice what his entire office wrote the previous year.

Despite the odds, he survived that initial test, and spent the next 12 years selling, implementing and servicing more voluntary benefits employer groups than any other account rep in the company's history.

According to Alfonsi, the meaning of bundling has “gone in a new direction” in the wake of the Patient Protection and Affordable Care Act. Since 2010, major medical carriers like Aetna, Cigna and United Healthcare have begun moving into the voluntary benefits market, either by acquiring voluntary providers or by rolling out new voluntary lines to be marketed alongside major medical plans.

This shift has enabled brokers and employers to bundle products from all three health insurance silos — major medical, ancillary and voluntary benefits — under one provider.

There are many advantages to this approach, said Alfonsi. Both employers and employees benefit from one administrative point of contact, and benefits brokers gain bargaining power by leveraging more lives for carriers to manage.

But for brokers offering these uni-carrier bundles, there are plenty of pitfalls, too, Alfonsi added.

“Usually, when products are bundled, it's all or nothing with the employer,” said Alfonsi. “If, at renewal, there is a massive increase with one policy — say, the group's life policy — then employers may want to get rid of the whole bundle.”

While this scenario isn't necessarily commonplace, Alfonsi said, it should be considered when weighing the pros and cons of bundling.

“Employer-funded premiums can be so volatile for certain group demographics,” he said. “Think of a small law firm that has a highly compensated employee with a disability claim — one claim, and that plan can be underwater for years. When carriers raise rates, it's not out of choice. It's because they have to.”

'You can't just jump into voluntary benefits'

In 2013, Alfonsi left Unum and began working with two carrier veterans who specialized in group disability – Brian Grandieri and Augustino Russo. Together, they founded TriBen.

“We saw an opportunity for specialization in group disability life, voluntary benefits and absence management programs,” said Alfonsi. “In our former carrier careers, those products were too often broad-stroked by traditional medical brokers, who would give a few minutes to those lines at the end of a two-hour benefits presentation.”

All told, Alfonsi and his staff have sold and serviced more than 1,000 group plans in their careers. As independent consultants, they now work with groups with anywhere from 10 to 10,000 employees.

From his point of view as a voluntary specialist, Alfonsi said TriBen has grown despite the fact that more than 60 percent of voluntary benefits are now sold by traditional major medical brokers.

In fact, this voluntary market shakeup has probably aided TriBen's cause.

“A lot of brokers are jumping into the voluntary market with both feet and no experience,” Alfonsi said. “But you can't just jump into voluntary benefits. That would be like us trying to become major medical experts overnight.”

TriBen, which does most of its business in Pennsylvania, New Jersey, Delaware and New York, has never had to engage in cold calling – or, as Alfonsi calls it, “smiling and dialing.”

Instead, they've kept the firm busy by building relationships with strong major medical brokers and cultivating a reputation for delivering true value to groups and employers.

“There are a lot of consultants on the voluntary side who only work with one carrier, whereas we test the underwriting, cost and product guarantees of policies across multiple carriers on the front end,” said Alfonsi. “That all but guarantees we are putting a competitive product in front of our clients.”

Alfonsi estimated that, five years ago, 40 percent of employers offered voluntary benefits. These days, it's more like 70 percent.

“That doesn't mean they are all good plans,” said Alfonsi. “A lot of traditional brokers are selling a voluntary line and just letting it sit. We commonly see programs with single-digit participation, which signals to us something is wrong with the programs — either pricing, administration or enrollment. As more brokers are selling voluntary, more groups are failing the test.”

That has created ample opportunity for takeover business, which Alfonsi said will likely grow. He expects 75 percent of new clients over the next year to come from replacement business, where TriBen brings enhancements to existing programs.

“We're seeing fewer and fewer first-time implementers,” said Alfonsi.

Instant Insights /

The voluntary broker&rsquo;s guide to product bundling

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