Benefits ‘seismic shift’ means great opportunity

There are seismic shifts happening in the benefits industry today, creating tremendous opportunity that will not be seen again in this lifetime, said a speaker at the Employee Benefit Adviser Summit in Phoenix Monday.

Those changes are coming as employers shift more and more of their health plan costs to employees through high-deductible plans. This opens the floodgates for advisers to sell the employers on voluntary products they can offer to their employees, says Chris Hill, CEO of benefits technology provider Spotlite, at the 7th Annual Summit.

“When it comes to change, those … advisers who can embrace that change, there is an opportunity to create a lead over competitors,” he said to a room full of brokers and advisers. “Winners will be created. Losers will be created. It’s on everyone in this room to think, ‘How will I capitalize on this opportunity?’”

Hill recognized that health care costs are getting out of control. In 2005, the average premium for a family plan was just under $11,000. That jumped to just over $15,000 in 2011, and Hill estimates it will be nearly $30,000 in 2021.

“That’s huge, that’s not sustainable, so how will employers cover these costs?” he asked. It becomes harder for companies to hold on to employees and hire new ones when health care costs are that substantial.  That’s why employees turn to voluntary benefits, those paid for by employees, to fill the gap.

“When [an] employer wants to shift cost, HR can’t come in and say, ‘Deal with those expenses.’ They need to keep their employees happy, to attract new employees, otherwise they are screwed,” Hill said. “… The demand [for voluntary] is logical, people need these products.”

It is advantageous, Hill said, for the employee to buy such supplemental benefits through an employer, who can provide a lower rate as a group, often at guaranteed issue and with portability.

According to Hill, in 2011, group sales of voluntary products increased 15%, while individual sales decreased 6%, “seeing the power of group.”

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