When youre managing the medical renewal, youre leaving a lot of money on the table by not building workplace voluntary benefits into the plan design.
How much money? Multiply the number of eligible employees by $56. Thats net first-year commission to the agency on the voluntary when at least 85% of the employees have one-to-one enrollment meetings with a benefit counselor. (Not just enrolling online or from a benefit booklet, these just dont generate much participation) In a 100-life group, thats $5,600 net commission. For some benefit advisers, voluntary is doubling their revenue from a group.
Voluntary benefits used to be nice-to-have benefits. With todays high deductibles and out-of-pocket exposure of $6,350 for the individual and $12,700 for families, these affordable financial protection products are now must-have benefits.
And lots of employees need the financial protection:
- 76% of Americans are living paycheck-to-paycheck, according to CNNMoney.
- 36% of adult Americans have no savings earmarked for emergencies, according to the Consumer Federation of America.
- 44% of Americans have less than $5,887 in savings for a family of four, according to the Corporation for Enterprise Development.
Supplemental voluntary plans such as accident, critical illness, cancer and hospitalization all pay the employee cash when he has an accident or serious illness to reduce or eliminate the employees out-of-pocket exposure. Short-term disability pays the employee cash to pay household bills when she cant work due to illness or injury.
In MetLifes 2014 U.S. Employee Benefits Trends Study, employees make clear they want more choices in their benefits and are willing to pay for them. As many as 64% of employees said they want a wider array of voluntary benefits that I can choose to purchase. And 60% declared they were willing to bear more of the cost of my benefits in order to have the choice.
And when employees meet one-on-one with a benefits counselor, 40-70% participate in the voluntary offering. Employees want and purchase these benefits when they understand how they protect their familys finances and provide financial security.
Integrate the voluntary
If you want to put voluntary benefits into an account, dont ask the usual, What about offering some voluntary benefits this year? immediately after finishing the renewal. Thats just pushing product and gets a, No. Instead, proactively integrate some of these benefits into the overall benefits plan before you have the renewal meeting.
Look for gaps, like a high deductible that employees can insure against with an accident and critical illness plan. Or the employer is not offering group short-term disability, a gap you can fill with a voluntary short-term disability plan. Make the voluntary an integral part of the benefits plan.
The benefit advisers who are most successful with voluntary benefits dont ask about voluntary, they tell the client how the voluntary fits into and complements the medical plan. They tell how the voluntary creates a stronger benefit plan that better protects their employees all at no cost to the client.
So take control of the renewal conversation and tell the client how the voluntary fills gaps and strengthens their benefits plan. Tell her how employees need and want the financial protection of voluntary. Tell her how benefit counselors will educate her employees on all their benefits. Then, take your new voluntary revenue off the table.
Griswold is an agency growth consultant and author of DO or DIE: Reinventing Your Benefits Agency for Post- Reform Success. His Agency Growth Mastermind Network helps agency leaders reform-proof their firm. Reach him at (615) 656-5974, nelson@InsuranceBottomLine.com, or through 21stCenturyAgency.com
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