The year in voluntary benefits: Products see popularity surge
For the fifth straight year, voluntary sales have increased by 12% or more, according to LIMRA, with products such as critical illness and accident insurance leading with double-digit growth.
Randy Stram, SVP of the group benefits business for MetLife, says this increased enrollment is due to more employers moving their employees to consumer-driven and high-deductible health plans, which impart more out-of-pocket exposure on their employees.
“The employees are recognizing that and are purchasing products like accident and critical illness insurance to close that gap and protect against potential out-of-pocket exposure, Stram says. “According to our MetLife Employee Benefit Trends Study, almost half, 48%, of employees live paycheck to paycheck, and nearly two thirds of employees say they are looking to their employer for more help achieving financial security through employee benefits.”
This is a trend MetLife has seen increase over the past several years, Stram says, particularly around employees seeking guidance from their employer or benefit adviser for security and financial protection.
Voluntary life and voluntary disability have both grown slightly over the course of 2016, and with these growths coupled by the major increase in supplemental medical, MetLife’s voluntary trend study determined that more than half of employees (55%) are concerned with not being able to afford unexpected medical bills that would not be covered by their medical insurance.
“What we saw in 2016 is that employers are increasingly leveraging this by offering voluntary benefits,” Stram says. “Employees are recognizing that this is a way to close those gaps they have.”
How do these trends affect brokers?
Over the last decade, HR staffs are smaller than they have ever been and have become increasingly reliant upon brokers and consultants to help them design, implement and manage their benefit programs. Stram says as recently as five years ago the focus was around products: What products should be offered, how do one provider’s products differ from another’s, what are the price differentials and are they portable?
“Now, that focus has shifted and it is less on product and more on process,” he says. “When I say process, I mean, how will the benefits integrate into the employer’s benefit and human resource ecosystem and what will the user experience be like for employees?”
Also see: “The big trends that will reshape retirement in 2017.”
With this shift toward process in mind, Kevin McNamara, senior enrollment strategist at The Standard, has identified five trends to help brokers and advisers grow their book of business in 2017.
1) Refined benefit offerings. McNamara says brokers should be counseling clients to add benefits strategically while implementing a communications strategy to engage employees and educate them on the importance of the benefits. “Selling voluntary products isn’t just about adding countless benefits,” McNamara says. “In fact, adding too many benefits at one time may defeat what a client is trying to accomplish.”
2) Multi-method communication strategies. Brokers may find that a one-size-fits-all communication strategy no longer works for employees within the client’s organization. In 2017, brokers should consider deploying a multi-pronged approach that meets the communication methods available to employees, such as email, text messages, direct mail and face-to-face meetings. “Multi-method enrollment strategies are trends we’re seeing occur primarily in the large-group market,” McNamara says.
3) Decision-support technology. Communicating with employees on their benefits choices should take multiple forms, but 70% of employees are interested in using online options to learn more about their benefits, according to a study conducted by LIMRA. Decision-support tools, which can be accessed through mobile or desktop channels, can help employees understand the need for certain coverages in everyday terms in the way that they want to consume information.
“As an industry, there’s a fundamental need to help employees receive better education around insurance products,” McNamara says. “Many employees [are not] aware of what the benefits provide and what’s in it for them, [and therefore] decision-support tools drive informed benefit decisions and deliver better outcomes for employees and employers alike. ”
4)Face-to-face support. Benefit counselors and effective onsite presentations can be incredibly helpful for clients with employees who may want more personalized assistance. “Employees always have questions about their benefits, and having onsite support can help brokers and employers when employee question and answer sessions get tough,” McNamara says. “Even though many people like online shopping, many don’t trust a computer for something as important as determining their benefits portfolio.”
5) Integrating with customers’ current technology platforms. Many employers have already purchased and implemented technology platforms to help automate benefits administration, from payroll to enrollment to carrier billing. When approaching clients about voluntary products, brokers should ask their customers about their current technology and look for ways to maximize their existing capabilities for communication and member maintenance.
“We’re seeing brokers who have strategic technology partners, but many of their clients feel they will save money and time if they can leverage what they’re using today,” McNamara says. “Brokers and carriers will need to be more nimble and commit the right kinds of resources to get voluntary products built and working on legacy systems in order to help secure a sale.”