Voluntary market heats up during open enrollment

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Voluntary benefits are becoming more popular ahead of open enrollment. While offering workers a solid health plan is table stakes for many companies, this year employees are looking for newer solutions such as student loan repayment and financial wellness benefits.

Brokers can play a key role in that decision process, but only if they are using the right technology, says Stephen Kapusta, the division vice president in strategic partners at ADP. Finding a solid HCM partner can help brokers remain competitive, he says.

Employee Benefit Adviser caught up with Kapusta to discuss some of the benefits that workers are looking for and strategies brokers can use to become more consultative.

What are some of the trends you’re seeing in benefits ahead of this year’s open enrollment?

The whole premise of having a great benefits plan historically has been to attract and retain employees. Now that you have four or five generations in the workforce, it's harder and harder for employers to offer the right benefits plan or a mix of benefit plans to meet the needs of that diversity around all the different age groups. One of the big things we're starting to see is the shift away from the major medical type plans, which are sort of table stakes now, to voluntary benefit offerings, like all these ancillary tech services.

What are some of those voluntary benefits?

The big ones that we're seeing are pet insurance, wellness programs and financial wellness. You're starting to see a big trend toward financial wellness, especially with millennials because it's very clear that they're advocates for helping and managing their money. One of the most popular offerings we're seeing this year in open enrollment is student loan repayment. So with the amount of debt that's out there across all those folks entering the workforce, you're starting to get nice benefit offerings from employers to help repay off that student loan.

Why are more millennials focused on financial wellness benefits?

What you're seeing with millennials starting to take up more and more as a percentage of the workforce there’s more of a need for [financial] help. There's so many things available today with the technology. It's not just as simple as putting dollars into your 401(k) anymore. They need help navigating that.

Financial wellness benefits have been more important than even a major medical health plan for some millennials because you're saying, “Hey, look, I'm, I'm pretty healthy, I'm not going to get sick, I don't need medical, but my pet might get sick, so I need you to help pay for my pet.”

More of these millennial employees are looking for their employer and help them out versus maybe, you know, a generation ago people looked to their mom, dad or a friend of the family to help manage finances.

How has the role of the broker changed during open enrollment?

When the ACA was rolled out brokers were moving to that consultative role. [Employers were] saying “I've got to make sure that my plan is affordable, I’ve got to make sure I offer it to the correct eligible employees, and then I've got to clear it all back to the government. So I need you to tell me what's the best way to do that.” And brokers did not have the answer. They did not have the tools. They had to actually lean into HCM vendors, saying “you need to go talk to your payroll company, you need to talk to your ben admin company.” That’s what brought the HCM world and the broker world together.

The broker is one of the most trusted advisers with employers in the middle market. [Brokers are] continuing to lean more and more of that consultative view by leveraging technology.

They can't just go in and use a spreadsheet, get a quote from the insurance carrier, then take the CFO golfing. That's not necessarily going to be a competitive differentiator in the marketplace the way it used to be. Today, there's got to be a real hard evidence of strategic benefits we're building by leveraging data that's out there. There's no shortage of data or tools available that can tell them how to create the best outcomes. The brokers who are there today are definitely winning more and retaining more of their clients.

If a broker isn’t up to speed with benefits technology, how would you suggest they get there?

For the brokers who are not doing that, that's probably the hardest step. There are plenty of HCM partners that a broker can lean into and rely on for help. How can I leverage technology as part of my overall consultative approach around plans for my employers? There's no shortage of companies that are willing to help out and want to understand that centers of influence are part of today's buying process. So you need to leverage those.

The first step is just evaluating what options are available in the marketplace. And then from there saying how can we partner with one of them. I need to go and gauge those companies to find out what they're offering to be able to better service my client.

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