The future of benefits is going to be driven by technology and voluntary product sales, says Aflac’s Executive Vice President and Chief Operating Officer Daniel J. Lebish. But are brokers ready for the next step? Lebish sat down with EBA for a Q&A in Colorado Springs, Colo., at The Council of Insurance Agents & Brokers Employee Benefits Leadership Forum.

Daniel J. Lebish

EBA: Are brokers ready for the future?

Lebish: I think they are. They are getting more and more ready all of the time. When I look at it now, brokers and consultants are really beginning to understand and focus on how they can be consultative. When we did a recent study one of the things we recognized and saw was that the next-generation consumer is going to want the same sort of experience around insurance, benefits and health care delivery as they want for anything else that they purchase — a real retail-like experience.

There is becoming a real focus on convenience, speed and transparency. What they want is online tools. In our survey, more than 50% of consumers are anticipating the use of online tools to provide them more information about the cost of healthcare, quality of healthcare and more information about their coverage as well.

One of my concerns has always been that if we just rely on technology alone that is not going to be sufficient. It needs to be supplemented with consultation. That consultation can come through a broker, an agent, a carrier and be supported with information from a provider and the Internet.

EBA: Who pays for and invests in this technology?

Lebish: It is a mixture of folks. There are technology firms who are investing in it. Just go down the hallway here at CIAB’s Employee Benefits Leadership Forum and look at the vendors. You’ll see how many technology firms are springing up all over the place. There are carriers who are doing it, such as Aflac through our Everwell platform and the investment we are making in Aflac Group on a stronger web service-based platform. And brokers themselves are investing in this. Everyone in investing in this at the same time.

EBA: What is the short-term future of voluntary benefits?

Lebish: I was in the major medical world for 17 years. What I began to see there is the fact that we were beginning to create solutions for employers that weren’t solutions for employees. We were definitely helping with the cost of healthcare for the employer, but the way we were helping was shifting more of the cost of that healthcare to the employee.

I began to view the voluntary/supplemental world as the solution to that. I could see these benefits would fill those gaps and I started thinking about it: Why is it that so few employers, percentage-wise, offer critical illness benefits? Thirty-percent of them offer it as a voluntary benefit to their employees, but 95% offer dental and 83% offer vision, according to the Aflac Workforces report.

When I started to think about it, I believe it was because we were not positioning these voluntary benefits in the right way and are not helping people truly understand the risk.

We commissioned a white paper study last year and we wanted to show what is the real risk of financial ruin that is being protected through a vision or dental policy versus a critical illness policy. There is nothing wrong with dental. It is good insurance for covering predictable things and is more like a prepaid coverage. It has its place. But if you really think about it from financial gaps, 65% of people don’t have $1,000 in their savings account. Then you recognize all of a sudden there is a real need.

The white paper told us that:
1) There is a 1-in-10,000 chance over a 10-year period that you will have $3,000 of vision claims paid back to you if you have vision insurance.
2) There is a 1-in-1,000 chance you will get $5,000 in dental claims paid back to you over that same 10-year period.
3) There is a 1-in-10 chance you will a $34,000 out-of-pocket experience because of a critical illness during that same time period.

If that is the case, why is it that so many employers offer vision and dental insurance, but so few offer critical illness insurance? All we could come up is as an organization is that we weren’t giving them the information and sharing it transparently. That brings us together as brokers who want this information and who want to position these benefits together and a carrier who can deliver it.

We’ve been working very hard and very passionately on this whole idea that these benefits should not be positioned as supplemental or optional but they should be positioned as fundamental.

You are seeing it now. More and more brokers are offering voluntary benefits. More than 50% of brokers plan to increase the amount of voluntary benefits they are going to have as revenue in their firm in the next 12 months. Forty-percent think the value proposition of voluntary will increase in the next 12 months.

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