Eyeing the small public employer market? Be aware that these clients take a variety of approaches to purchasing and administering insurance benefits, says Minnesota Life Insurance Company.
Minnesota Life conducted research last summer that showed purchasing and administration procedures used by cities, counties, school districts and other government employers with fewer than 1,000 employees vary widely.
“The study shows there’s no one way to approach small public employers,” said Cambra Aasen, president of St. Paul, Minn.-based employee benefit broker Ochs, Inc., which represents Minnesota Life Group Insurance in this market. “Some of them purchase employee benefits through associations, some issue requests for proposal and others join a statewide buying pool.”
“We also found that, for the most part, small public employers deploy little technology for benefits administration,” said Aasen. “Carriers often perform services such as forms access, re-enrollment and billing. The smaller the employee group, the more likely the carrier will handle many of the administrative functions.”
Aasen notes that one common thread across the market is increased interest in voluntary benefits. She points to a 2010 survey that shows nearly 90% of the 569 U.S. municipalities, states, educational institutions and other public entities offered or were planning to offer voluntary benefits. The most popular voluntary benefits in this market are dental insurance, long- and short-term disability coverage, and Medicare supplement, according to a May 2012 study.
With regard to group life insurance, the Minnesota Life study found that most group life offered by public employers is paid by employees through payroll deduction, is guaranteed issue for new hires, and requires evidence of insurability for coverage that exceeds a cap.
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