Why brokers are more open to introducing voluntary benefits
As healthcare costs continue to rise, shifting costs onto employees, voluntary benefits that offset out-of-pocket exposure are expected to be increasingly popular.
EBA spoke with Bart Yancey, CEO of DirectPath, an employee engagement, health care transparency and compliance firm, to understand what role brokers will play in expanding the understanding and utilization of these benefits. An edited version of the conversation follows.
EBA: What is going to happen with voluntary benefits next year?
Yancey: In 2018, we will see continued growth, probably significant growth, in the market. It’s been a market that been growing at a pretty rapid pace the last several years. I anticipate we will see a lot of the same.
It is a combination of employers doing a couple of things. One, getting more familiar with the different voluntary products and better understanding how voluntary can complement their overall benefits strategy. Employers are consistently thinking about voluntary benefits as a key part of their overall strategy. Whereas 10 years ago, that was not the case.
EBA: What role does the broker play in helping to introduce voluntary benefits and bring new products to the client?
Yancey: The broker plays a crucial role and a big part of the growth we have seen is the result of more brokers embracing voluntary benefits, familiarizing themselves with voluntary benefits and ultimately taking voluntary benefits to their client as a key strategy.
The broker, in most cases, has a very trusted relationship with the employer and is the entity [in the] position to introduce voluntary benefits more so than anyone else. They are in a trusted position as an adviser for their client and, in many cases, are making recommendations in steering their clients as it relates to healthcare and other benefit decisions. It is a natural role for them to play as they talk about voluntary benefits and introduce the whole concept of voluntary benefits. The brokers that can do that well are having a lot of success with voluntary benefits.
EBA: You said brokers are embracing voluntary now, but why is that?
Yancey: There are a couple of factors. One is that you have seen more insurance carriers enter the voluntary benefits market, so you have more products in the market; you have more carriers that are selling or positioning these products with their broker partners across the country. That is a big factor.
I think the products have become innovative and more strategic than in the past. They now do a really good job of complimenting health plan initiatives and filling out-of-pocket expenses for employees. Finally, the revenue side, more and more brokers as they have been pinched from a revenue perspective on their other lines of coverage, are now looking for new sources of revenue. Voluntary benefits are the natural source for bringing these brokers new revenue streams.
EBA: What type of revenue implications do voluntary benefits have for a broker?
Yancey: It is significant. It is one of the driving factors for the increase that you see in voluntary benefits. We partner with brokers across the country and the large majority of these brokers have implemented internal initiatives really geared around selling voluntary benefits. It has been driven because of the revenue potential. It is a way for brokers to make up for some of that lost revenue they are seeing on other lines of coverage.