With major medical premiums jumping 10% to 15% or more at renewal, more brokers are turning to vision care as a way to ease the pain their clients are feeling. The reason: vision is a low-cost way to add a benefit that employees and their dependents actually use and value highly.
"Many times I'm going into a situation that's either competitive, or a customer is looking for added value, or has gotten a huge rate increase," says Patsy Akridge, owner of Akridge Insurance & Financial Services in Martinsville Va. A vision care plan works well at clients who have just been hit with a rate increase because, especially when vision is sold as a voluntary benefit, the cost of the care as a voluntary benefit is low compared to other medical benefits, and the return on investment is so great, she points out.
"It's hard to sell a benefit when you're talking about an increase," Akridge says. "So now you're going to the client with an increase of, say, 10% and asking them to buy vision on top of that. What you have to do is reverse it out and say, 'This is going to cost you X number of dollars; however, the return on your investment is going to be Y. They ask how, and why - and that's when I go into my sales pitch." Akridge's book of business includes groups up to 2,500 employees.
Vision care remains a high-value product at relatively low cost because of the deep discounts that ODs and MDs and big-box retailers can provide, points out Tim Falanga, executive vice president of AmWINS' managing agency group. "We spend a lot of time trying to help our brokers show value to their clients, which is kind of a tough thing to do these days, says Falanga. "With medical, an employee pays a lot of money and hopes they don't have to use it; while in a vision care plan, for a low cost employees get a benefit that saves them a lot of money. We think there's a lot to be said for that."
Eye exams lead to prevention
With 410 employer groups comprising 11,000 lives - an average of about 27 lives each - Falanga's focus is on serving the small group market. In larger accounts where experience rating is more prevalent, Falanga points, out, today's hot button in the vision care market is its value as a complement to a wellness program. In large measure this development was sparked by the wellness provisions in the Patient Protection and Affordable Care Act. Under the law, routine exams are now covered at 100%.
This is significant because employees are more likely to have an eye exam than a physical exam, Falanga points out. For a larger employer, if more employees go in for a routine eye exam, the result can be more early detection of high cholesterol, hypertension, and many other conditions that might otherwise go undetected. And of course, early detection followed by early intervention helps keep medical costs down. "CFOs and HR folks in particular like this," Falanga says. "They want their employees to have prevention; they understand that it will keep their costs down on the front end."
Rising participation rates during a time of economic uncertainty indicate that employees value their vision care plans too. For example, a 2010 survey of 88 million people (out of the estimated 155 million people with a vision care plan) who had vision care plans through members of the National Association of Vision Care Plans found that participation increased about 3.2% from 2008 to 2009 - at a time when economic conditions were at their worst.
And as Baby Boomers age, more people suffer from myopia, which translates to greater demand for vision care plans through work, notes NAVCP president Richard Sanchez. While it's not at the level of dental - about 56% of companies currently have a vision plan, while dental is in the 80% range - demand is up for vision care plans, according to Sanchez, who is the president and CEO of Advantica, the nation's sixth-largest vision plan company.
More importantly, he says, there's more receptivity to vision now among brokers. "Brokers who are tired of talking about 20% increases in medical costs can now start the conversation by talking about a wellness benefit called vision care," Sanchez says. "The brokers we've observed tell us that wellness is very important as they put together programs for their clients." The key strategy, he says, is to promote a vision benefit because of its wellness component.
More employers should view eye care as part of their wellness benefit, says Susan Egbert, director of eye health strategies at VSP. "Wellness and early detection really go together - keeping people healthy and early diagnosis, especially of problems that are preventable, can help manage conditions better," she believes. "That's really what needs to happen to reduce health care costs and increase productivity."
By and large, the vision care industry "has spoken in a fairly consistent voice" about the connection between eye health and overall health - meaning the eye exam component of a vision care plan - according to Pat Huot, director of managed vision care at Transitions Optical, a leading provider of prescription lenses. Specifically, he says, "People talk about the value of exam as a detector of diabetes, hypertension and other conditions. We hear that from the carriers we partner with, in the interactions we have with brokers - whether it's a specific broker at a CE event or if they're in a partnership with one of our carriers."
The diagnostic value of eye exams plays a big part in her sales strategy, says Akridge. For example, when she identifies the high-risk conditions in a particular group, the top three are always the same: diabetes, eye disease (usually glaucoma) and high blood pressure.
"I tell them that those issues can be detected early, in an eye exam. So now we're into the preventive value of vision care," Akridge says. "That's when you really get their attention - at that point they are not concerned about the cost of vision care, they're concerned about reducing their claims utilization."
Workers comp claims also can be mitigated through a vision care plan, Akridge points out. In workplaces where employees are sitting at computers all day, she says, she is seeing a lot of chronic fatigue symptoms - a condition that can quickly turn into a workers comp claim.
"With a vision care plan, I can say, 'Let me give your employees healthy eyes. That will reduce your workers comp claims, and that turns into dollar savings.' I explained this to a client recently and his reaction was, 'Wow; I never thought of that.' If he had never thought of that, how many other employers have not thought of it?" Akridge asks.
"That's what a lot of brokers are missing," she declares. "They're thinking, 'This is a small benefit; I can't make a lot of money on the commission.' But they're missing the boat with prospects in being able to bring more value to the customer."
Boosting utilization
Just because employees now have greater access to a low-cost eye exam, it doesn't necessarily mean that they will actually utilize the benefit. For example, according to data from Transitions' 2011 "Employee Perceptions of Vision Benefits" survey, nearly 50% of employees do not take advantage of their employer's vision benefit. The survey found even lower utilization of vision benefits among covered children (46%) versus their parents (35%).
"So on one side of the coin you have everybody who seemingly 'gets it' from a preventative connection," says Huot. "But the real problem now appears to be that half of the employees aren't taking advantage of it - whether it's the 24% who don't enroll when it's available, or the 32% who enroll but never use it. So the full preventative benefit of a vision plan is not being realized."
Sanchez suggests a possible solution to underutilization of eye exams: focus more on the eyewear part of the plan. The NAVCP's 2010 survey found that utilization of an exam was about double among people who had an eyewear benefit, compared with those who did not. Says Sanchez, "A wellness component could be, 'Let's just add an eye exam and a discount on the eyewear.' But you're not going to get the utilization or participation unless you have a funded eyewear benefit."
So to Sanchez, it's very important that brokers look not only at the eye exam benefit, but also at the eyewear benefit as well. "At the end of the day, vision is becoming an important component of wellness - a preventative benefit, versus an ancillary benefit.
In designing a plan, it's important to include the eyewear benefit - otherwise I don't think you're going to get the wellness value or the best participation in the program," he says.
Voluntary vs. employer-paid
The Transitions study that gauged employee engagement with their vision plans also found significantly lower enrollment among employees with voluntary plans (50%) versus employer-paid plans (86%). But the data on employee satisfaction, Huot believes, shows the trend is moving more towards voluntary. When researchers looked at how satisfied employees are with their employers' communications about their vision plans, he says, they saw a significant difference in terms of a satisfaction in voluntary versus employer-paid plans: 62% of employees with access to an employer-paid benefit were satisfied, versus 51% of employees with access to a voluntary vision benefit.
"Neither number is as high as they could be," says Huot, "but the gap between the two says something in terms of the need to consider a communications strategy that puts as much emphasis on voluntary benefits as we do on employer-paid benefits."
At Transitions, Huot says, they're starting to see some movement away from just ordinary lenses and a basic frame discount. "Carriers are recognizing that with more and more voluntary, they need to have a little more in there to encourage employees to not only enroll, but to go out and get the exam so we can start to realize some of the clinical savings from the benefit," he says.
One of the first steps in helping brokers make a vision care sale, says AmWINS' Tim Falanga, is to make sure the broker knows whether or not vision is imbedded in a prospect's or a client's medical plan. "If it is, then the client is already paying for vision. But if it's not, that opens the door to sell our product," says Falanga. "In that context it's an easy product to write and sell - you do an application, you get a census of employees, you collect a check and you're done."
At AmWINS, their vision care enrolled lives and business has grown by about 6% so far this year, says Falanga, and remains one of their "stickiest" products in terms of persistency. The wholesaler's Employer's Vision Trust product, which is insured by VSP, has seen just two rate increases in 20 years. AmWINS performs all underwriting, issue and billing functions, and VSP pays claims. "The best part of having a strong network like VSP's is that it's going to keep your cost down," he says.
In the vision care space, Falanga says, "One thing we do find is that everybody talks about their network. VSP, for example, has more ODs and MDs than anybody else - which is good for somebody who wants to go to their own private practitioner."
But AmWINS also writes business with Superior. "We like them because they get into more of a blue- and grey-collar marketplace," according to Falanga. "Some people prefer to go to Walmart and Costco - the big-box stores - for their eye care, and I'm finding that even though for many years I've been a proponent of the high-end practice approach, we're finding traction with the more economical Superior plan."
Akridge sees a trend toward greater acceptance of vision care among employers and other brokers, in both voluntary and employer-paid. In the past, vision care programs "were always like a side note," she says. "But now vision care incorporated into a sale is a necessity. Sometimes it's as a voluntary benefit and sometimes it's part of the core package - it depends on the size of the customer and what I'm trying to accomplish."
Brokers should not neglect the fact that a vision care plan helps not just employees, but their dependents as well, says Akridge. For example, making sure that kids have the proper eyewear can help them do better at school. And advances in technology - like photochromatic lenses - can help protect kids from eye damage caused by UV rays. Not many people know that Transitions gives free lenses to all children covered under the contract, she points out.
"As health care professionals, we can do a better job just by educating people about the things we should all be doing, like protecting our sight. We don't want to miss that boat," Akridge declares.
