The first domino has fallen: accelerating the death of payroll deduction

Mark the date: October 16, 2018.

A few years ago, my friend, Nelson Griswold, wrote an article entitled, “The death of payroll deduction.”  In the article, he talked about how the traditional payroll deduction model, complete with a soul-crushing employer billing and reconciliation process, has a shelf life.  It’s a messy and complicated process.  As Nelson wrote, “Billing problems stemming from payroll deduction of voluntary benefit premiums remain the top reason that employers drop voluntary plans.”  In a recent survey, 53 percent of account defections cited “billing issues” as the primary reason for dropping coverage.

Every day, businesses large and small make the decision to discontinue offering voluntary or enhanced benefits.  And in a market where 58 percent of all sales are takeover sales, the thread of discontent most employed by agents and broker is to simply ask the client, “How’s your billing situation with your current provider?”  Talk about opening a can of worms; and cue the competitive takeover.