If you previously have avoided worksite voluntary benefits as just a one-dimensional product play, this strategy is likely to change your mind about these valuable and highly versatile employee benefits. If you have been offering WVB but want some new ways to leverage voluntary as a solution for your clients, you will love this strategy.
I recently wrote about how the Affordable Care Act is moving the benefits industry toward a consumer-centric model, where the benefits decision maker will no longer be the employer, but the employee. Some visionary brokers are opening retail stores to serve these new insurance customers. But you don't have to open a storefront to adopt a more consumer-centric business model.
Your opportunity is to communicate directly with employees to educate them on cost-effective voluntary benefits that offer them the financial protection they and their families increasingly need.
Bridging the benefits gap
Employer-sponsored plans continue to increase the deductible and employee's out-of-pocket exposure. Additionally, it's projected that the majority of employees who go to the public exchange will enroll in the bronze health plan, which has a 40% out-of-pocket exposure for the insured, with a likely deductible of $2,000-$4,000. That's more financial risk than most employees are accustomed to taking on. Worksite voluntary health benefits - accident, critical illness, medical gap, hospital indemnity, short-term disability - allow employees to insure against that high medical exposure with extremely affordable premiums.
WVB inherently are consumer-centric benefits - by definition, the employee always has been the decision maker with voluntary benefits. Moreover, an effective voluntary benefits program requires that the broker or, ideally, a highly trained benefits counselor, meet with the employee one-to-one to educate on the value proposition of the benefits. To bring value to employers, you can leverage this benefits communication process to help employees understand how health care reform will impact them and their benefits plan.
According to the recent Aflac WorkForces Report, 74% of employees expect their employer to provide information on how the ACA and the exchanges will affect them and their benefits, yet only 13% of employers plan to play this educational role. This huge disconnect creates a big opportunity for brokers and advisers.
Offer to explain the ACA and exchanges to employees for the employer. The time and expertise, however, required to meet individually with each employee and guide them through the health care reform maze is not inexpensive. By offering employees voluntary benefits to help them manage the out-of-pocket financial risks in their medical plan, you both offset the cost of educating the employees and, if you use a benefits enrollment firm or carrier that does benefits communication, you offload the work as well. And you should be able to secure some new accounts with this strategy.
Worksite voluntary benefits provide you the risk-management tools for employees and the benefit communication strategy and capability you need to become more consumer-centric. It's about to become a consumer-centric benefits world and the number of customers you will have to sell to remain profitable is about to explode. Will you be ready?
Griswold is an agency growth consultant and author of DO or DIE: Reinventing Your Benefits Agency for Post-Reform Success. His Agency Growth Mastermind Network helps agency leaders reform-proof their firm. Reach him at (615) 656-5974, nelson@InsuranceBottomLine.com, or through 21stCenturyAgency.com.
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