Voluntary benefits such as critical illness, accident, cancer and other worksite voluntary benefits are growing in demand among employers and their employees, with some even gaining in popularity on long-standing ancillary benefits such as vision and dental. Yet, while some ancillary benefits practically sell themselves, brokers need to have a more strategic sales approach to find success selling worksite voluntary benefits, industry experts say.
Traditional ancillary benefits such as dental, vision and disability remain popular for both employers and employees. A new EBA survey about voluntary benefits asked benefit advisers to identify the voluntary products most coveted by their client base, and 81% said dental benefits are in high demand, 59% said vision is and nearly half (49%) said short-term disability is in high demand by employers.
While these standard voluntary benefits remain popular, the survey showed employers and employees are increasingly asking brokers about other worksite voluntary benefits, including cancer and critical illness, a trend benefit experts in the field confirm.
We see our brokers primarily selling critical illness, accident, hospital indemnity and medical gap, says Rob Shestack, senior vice president and voluntary national practice leader at AmWINS Group. These four programs are continuing to gain more popularity. We are also seeing telemedicine, ID theft gaining momentum, and a new program called wage secure, which is unemployment gap insurance.
More than half (62%) of brokers surveyed by EBA say critical illness insurance is in demand by employer clients, and 25.5% say its in high demand. The employer demand is similar for cancer insurance, with 62% of brokers saying cancer insurance is in demand by clients and 21% saying its in high demand. One-third of brokers (36%) say hospital insurance is in high demand by employers, while 30% say accident insurance is.
As employees face higher out-of-pocket medical costs and greater financial exposure from a serious illness or accident, the worksite supplemental health benefits hospitalization/hospital indemnity, accident, critical illness are finding a lot of favor with brokers, employers and employees, agrees Nelson Griswold, president of Bottom Line Solutions Inc., and an EBA columnist. As deductibles and an employees share of co-insurance increase, it just makes sense to provide voluntary policies that pay cash to the employee when they have medical expenses. Also, worksite voluntary STD is becoming more popular as employers drop their employer-paid group STD plan.
Human resources and benefits managers understand the value proposition of dental, STD, and vision plans and how they work, says Griswold. Plus, employees understand and like dental and vision and will ask HR for them.
Worksite products, however, he says, often require brokers to educate their HR clients; a heavier lift for the broker.
Very few HR professionals and far fewer employees know what a critical illness plan is and how it works, he says.
Additionally, Griswold adds, Brokers find it easier to sell dental, group STD and vision because these are easy to enroll and do not require having to get HRs agreement to the disruption of bringing benefits counselors into the workplace to meet with employees.
Key to sales and employee engagement with these benefits is effective communication, which many brokers surveyed by EBA found wanting.
While brokers felt traditional communication methods such as e-mails, electronic platforms and mailings were somewhat effective, few felt they were very effective. Product information bundled with open enrollment communications is considered most effective by respondents, with 45% saying it is very effective and 42% saying it is somewhat effective. More than half (58%), for example, say mailings are not very or not at all effective.
Shestack says understanding the benefits audience is key to ensuring effective communications. You need to know your audience, not just the overall demographics such as salary and job classification, but age is very important relative to the generation gaps such as baby boomers, Gen X and Gen Y (millennials), he says.
Advisers should understand these gaps and that the methods of communicating for these various generations are very different, he says, adding that communicating with smartphone apps may have a very different impact than communicating with postcards and emails on the generation gaps within an employer group.
Whether the product is the medical plan, dental or vision and especially if it is critical illness, accident, cancer, hospitalization/hospital indemnity, employees will participate at higher levels if they are educated one-to-one by a benefits counselor at work, Griswold says. Let me emphasize that no other strategy electronic, bundled with open enrollment, posters and mailings, etc. is nearly as effective as one-to-one benefits education at work.
Although certain online communication and education tools are generating very good participation in online self-service enrollments, they are not widely utilized yet, he says. Enrollment data clearly shows the impact of one-to-one benefits education on participation levels. When employees are guided through their enrollment process by a benefits counselor, participation increases in almost every benefit offered including the medical plans and the ancillary benefits.
Advisers, he says, should show their HR and C-suite clients how using benefits counselors to engage employees educates them on their benefits, improves employee appreciation of the benefits plan and raises employee morale.
When asked what products or services brokers would like to see from voluntary benefit vendors, the top responses included: better call center and call center flexibility, better communication, easier enrollment platform, online enrollment with broker admin capability; more bundled products including pet insurance and auto with other products, etc.
Griswold agrees bundling products can be an effective approach and will become more popular, but cautions that many of the services or products advisers say they are looking for will not necessarily increase employee engagement.
Im sure advisers want these services and features, but the only one that will increase participation, premium and commissions is better communication, he says.
Voluntary exchange offerings
EBA voluntary benefit survey respondents also said they would like to see better integration by voluntary vendors with private exchanges. Benefit experts say exchange integration with voluntary benefits is already trending up and will likely continue to do so.
Eastbridge Consulting Group found 7-in-9 insurers intend to offer voluntary products on an exchange platform.
Private exchanges already are adding more voluntary benefits to their product mix. This trend will only accelerate, says Griswold.
Shestack agrees, saying, I feel voluntary has a place [on a private exchange], but it needs to be strategic in the offering and not too confusing. They cannot stand alone and be a successful employee engagement and communication success story. You need the face-to-face and/or call center support to supplement any Web-based /exchange platform.
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