With fall open enrollment rapidly approaching, employee benefit advisers should consider offering their clients a benefit that can help employees cope with one of the fastest-growing problems in the U.S.: Identity theft.
As employee benefit professionals, we long ago embraced catastrophic illness coverage and life insurance as sensible protection for the hard-working employees we serve. Yet these days, our employees are more likely to be hit by other challenges — including ID theft, or the illegal use of personal information to steal money or credit.
Consider the statistics for a 40-year-old male in the U.S.: One in 678 will be diagnosed with invasive cancer, according to the National Cancer Institute. One in 409 could have a life insurance claim, based on data from the U.S. Centers for Disease Control and Prevention. Meanwhile, 1 in 20 will be victimized by ID theft or fraud, according to Javelin Strategy & Research.
At the national level, the numbers are staggering. According to a recent Javelin study, identity fraudsters stole $16 billion from U.S. consumers in 2014. There's a new victim every two seconds.
Health care data is especially susceptible, as fraudsters steal personal information to obtain medical care, buy drugs or submit fake billings. From January through mid-July of this year, the Identity Theft Resource Center reported 147 data breaches in the health care sector — including one incident in which hackers gained access to 80 million records belonging to current and former customers and employees of Anthem, a major health insurer.
While mega-breaches like Anthem grab the headlines, each year thousands of smaller breaches do irreparable damage to the reputations of small, medium and large businesses — and their employees. In the same way that health issues affect employee productivity, ID theft can be a distraction for anxious employees who are trying to recover from these crimes and protect themselves in the future.
The good news is employees understand the problem. According to a 2013 study, 39% of employees said they would be very likely or likely to purchase ID theft protection through payroll deduction, if it was offered. With consumers growing more and more sensitized to ID theft crimes, we can assume the percentage of interested employees is even higher today.
With this in mind, I believe benefit professionals should take advantage of new technology and services to protect employees and help them resolve ID theft situations.
How can an employer enter this emerging field of employee benefits? For starters, consider characteristics that are common to the most effective ID theft protection service providers. My company, Voluntary Employee Benefit Advisers, recently conducted a scan of the field and we believe minimum requirements include:
- Proactive approach. Public and private sector responses to ID theft are largely reactive. The typical scenario looks something like this: A consumer's data is breached, and then a company or government agency pays for credit monitoring going forward. The only problem is: New activity on credit reports doesn't show up for at least 30 days, more than likely much longer. For fraudsters operating in today's digital world, that's more than enough time to damage a person's credit and financial reputation.
- Robust data access. To be proactive, ID theft protection service providers must be able to detect suspicious activity in real time. That means having robust access to data repositories containing information including but not limited to credit card applications, wireless accounts and mortgage applications. According to Deutsche Bank, real-time analytics is "the key differentiator" among providers.
- Customer focused. Forward-thinking ID theft protection service providers make it easy for employees and employee benefit administrators to participate by offering payroll deduction. Also, at a time when consumer data is too often seen as a commodity to be sold and re-sold with little regard for privacy, reputable providers never sell or share member data.
Effective ID theft protection service providers go farther than the minimum requirements, and they're constantly formulating strategies to get ahead — and stay ahead — of fraudsters. Working with effective providers, employers and benefit administrators can help employees protect themselves against identity theft.
William (Tinker) Kelly is president and CEO of Voluntary Employee Benefit Advisors and a member of EBA’s Advisory Board.
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