Voluntary benefits have become very popular in recent years and many brokers and carriers have entered this market. While increased competition is certainly positive, understanding the features and nuances of these benefits has become very important. Unlike Medical plans, which have become more homogenous with the advent of the Affordable Care Act, voluntary benefits continue to be quite different from carrier to carrier. With the ACA, we have seen higher deductibles that make voluntary benefits even more important to employees, many of whom are living paycheck to paycheck.
As a broker offering these benefits to your employer groups, it is important to become proficient in voluntary benefits or choose to outsource this expertise. There can be a huge difference in benefits from carrier to carrier. It is important to dig into the policy language and understand how the policy will work. And being active in servicing accounts can be quite an education as one can better understand how benefits work at time of claim.
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Here are a few provisions that you may want to review when shopping for a voluntary benefit plan:
- If you are replacing coverage, review current coverage and determine which carrier might be the best fit.
- Benefits offered vary widely from company to company and it is important to read through not only the proposal or the brochure but also the actual policy. Look at some more common claims and some shock claims and see how they would be paid under each plan. Consider gaps in coverage. An employee with a higher deductible will probably need a different plan than one with a lower deductible. How realistic are the benefits shown and how easy is it to file a claim?
- Portability is a broad term with many different types. Can the policy be continued if the master policy is cancelled? With some benefits, it may not make that much difference, but it may be significant in other cases, particularly if an employee is uninsurable.
- Guaranteed issue and takeover need to be carefully considered, particularly if it is a replacement group. What are the terms and, realistically, how obtainable is this?
- Exclusions should be carefully reviewed. Pre-existing conditions and waiting periods should be considered and whether the carrier will waive these for takeover should be considered.
- Age changes can be a consideration. If a plan was written as age at entry, there may be many employees who are now in a different age bracket. Sometimes you will find that even though the rates per age bracket are lower with a new plan, many employees will have had age changes and will actually be paying more.
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This is just a small number of considerations when choosing a plan. If you are new to voluntary benefits or too busy to fully educate yourself on the options, I would suggest that you choose a partner who is well-versed in these benefits. Your clients are depending on you. Make sure you are getting them the best advice possible.
Tygart, CLU, ChFC, is president of Corporate Benefit Solutions, Inc., a 27-year-old enrollment company specializing in voluntary benefit communication and enrollments. He has 40 years of experience partnering with brokers and business owners. Reach him at (800)263-0401 ext. 702 or jtygart@cbsiga.com.
