View from the Top…
by Leila Morris

A while back, I attended a local broker meeting that included an impressive presentation on why just about everyone needs disability insurance. I asked a couple of brokers for their reaction to the presentation. The response can be summed up as, “That’s all well and good, but, in this economy, who is going to agree to have more money taken out of their paycheck?” and “It takes too much time to sell voluntary benefits when you consider the commission you get.” So, we asked executives from carriers and agencies to respond to these concerns and give us a pulse on the worksite market.
What they told us is that the market for voluntary products is one of the fastest-growing areas of the benefit arena. Voluntary benefits help fill in the gaps in coverage as employers are forced to cut back on medical benefits. Executives say that limited medical plans, voluntary hospital confinement indemnity products, and critical illness plans are seeing the most growth.
As for the broker’s return on investment, the key is finding a carrier that’s focused on customized employee education, hassle-free enrollment, and expert support. The word “turnkey” was used more than once.

1) What is a compelling argument for employees to have extra money taken out of their paychecks for voluntary benefits when they are cutting back on all kinds of small expenditures in a tough economy?

Christopher Bernardine, second vice president, Broker Sales for Aflac: Adequate insurance coverage is an important part of financial health for everyday working Americans, but unfortunately, it is one of the first budget items individuals eliminate when finances get tough. When in reality, insurance coverage is one of the most valuable items consumers can have during times of financial stress. Despite what’s happening in the economy, the need for insurance does not change; accidents and illnesses will still occur. For example, an out-of-pocket expense incurred from a health event that many people never consider is the time spent away from work for not only the patient, but also for the spouse. This affects both household incomes. Additionally, having quality voluntary insurance products should help provide policyholders with more options including the ability to travel to a physician or hospital that specializes in treatment. For many consumers who don’t live near this type of healthcare facility, traveling to a specialist is frequently considered out-of-network creating an added expense. Few Americans have the recommended three to six months of savings. And during a time when personal savings for long-term investments like retirement and college are critical for families, it is increasingly important to have added support that will help provide income protection against serious health events.

Toney Chimienti, president, Chimienti & Associates Inc: Most employees feel that having the financial security of supplemental income protection during a disability is even more important when the family budget is tight. Minimizing the financial exposure to medical deductibles and co-payments while reducing premium contributions with HDHPs and GAP plans can go a long way toward improving the family budget. HSA-compatible products that complement HDHP plans help offset reduced revenues created by lower health premiums.

Shawn Smith, Territory vice president, Transamerica Worksite Marketing: Our overall worksite business was up 40% in 2008. Voluntary insurance products have become more valuable to employees and their families as most of people’s savings and retirement assets have been reduced significantly over the past year. Having payroll deduction at the workplace is the most affordable and convenient way to purchase important individual insurance products.

James W. Greth, President of Word & Brown General Agency: The economy is putting extra pressure on everyone to protect their earnings. Employees need the right coverage, but at less cost. Many employers are changing benefits and reducing their contribution to their employees’ coverage. In addition, co-pays are increasing and high deductible plans have become a necessity for many employers if they are to continue offering healthcare at all. As a result, employees can fill in the gaps by purchasing inexpensive worksite products that can pay cash benefits that can help offset the increases in co-pays and deductibles. It makes sense to pay for voluntary benefits if they are benefits that will be used.

Lawrence S. Hazzard, senior vice president, Product & Marketing, at Berkshire Life, a subsidiary of The Guardian: Actually, when it comes to a voluntary benefit like supplemental disability income insurance, we tend to encounter the opposite reaction. An uncertain economy really makes people focus on protecting their ability to provide for themselves and their families. Purchasing DI through the workplace is typically very affordable because of the discounts.

Patrick McClelland, VSP Vision Care’s vice president of National Inside Sales: Vision benefits are generally low-cost for the employee compared to other benefit choices, such as medical coverage. Healthcare payroll deductions are typically done pre-tax and the participant’s savings generally far outweigh what they pay in. An average employee who pays a few pre-tax dollars towards a vision benefit per pay period can save hundreds of dollars on eye care and eyewear. In addition, people with both medical and vision insurance visit the eye doctor nearly three times more often than they visit their primary care physicians. All of these factors add up to a strong return on the dollars spent on vision insurance.

Steve Eagle, Partner, Seacrest Partners Inc: My experience has been that, if the vision benefits are explained appropriately, the members recognize a voluntary program as a benefit. It is usually the employees with modest incomes that take advantage of the programs for this reason.

Fred Cook, vice president of sales, Assurant Employee Benefits: Pricing is very competitive because risk is based on group employee demographics instead of an individual. In addition, group coverage may be the only coverage available for employees who are ineligible to purchase individual insurance.

Roger McClure, Allstate Workplace Division, Field vice president for the Western U.S Allstate: Voluntary benefits generally pay high-first year commissions. A large percentage of the employees will purchase the products. Brokers can earn a great deal of revenue with the appropriate products when the majority of employees meet with a benefit counselor face-to-face or at least via a call center during enrollment. With a sound re-enrollment strategy, the broker can continue earning nice revenue year after year. This is possible through the sale of additional products, increased coverage for existing employees, and sales on all product offerings for new employees who have become eligible since the previous enrollment.

Giovanna Hughes, account executive, Los Angeles, --Colonial Life & Accident Insurance Company: We’re seeing more interest in voluntary benefits among employees and employers during this recession. In fact, an article in the December 2008 issue of The McKinsey Quarterly reveals that there has been a 45% increase in spending on personal insurance and pensions in recent downturns. Adding voluntary benefits can help employers expand their programs and manage their budgets. Employees like the idea of having personal coverage they can keep if they leave the job or get laid off. Many group products are not convertible to personal insurance.

Clay Yokota, Regional Sales vice president, West Region, Trustmark Voluntary Benefit Solutions: Most people wouldn’t have enough savings to keep their family financially sound if a family member became sick or disabled or died. Voluntary benefits help families protect themselves from financial ruin in these situations. Benefit counselors help them make wise decisions on the right amount of financial protection.

2) Considering that brokers generally make less commission on voluntary benefits, how can they offer these benefits to clients in an efficient way that provides a good return-on-investment for the broker’s efforts?

Christopher Bernardine, Aflac: Because of the current economy where businesses and individuals are looking to better manage expenses, clients and their workforce are more likely to consider voluntary insurance as an attractive worksite benefit that can help them with containing costs. In turn, this presents a great opportunity for brokers to include voluntary benefits in their portfolio. Aflac sponsored a survey by Accelerant Research in which more than 1,200 online interviews took place to gauge how consumers’ attitudes and behaviors about how health and wellness have changed over the past year. Consumers without voluntary health insurance coverage are more concerned about their finances, job security, and insurance than are those with coverage. These consumers are taking drastic steps to save money, such as skipping doctor visits and medical procedures. This shows that not only can voluntary benefits help brokers to diversify their offerings and generate a new revenue source; but these products may also provide a great service to clients by addressing their financial needs during a time when their employees need it most. Also, it is important for brokers to identify voluntary carriers that offer a competitive commission structure that will provide them with more options to best fit their business model.

Shawn Smith, Transamerica: Strong employer support is critical to the broker’s return-on-investment. A good broker will stress the positive effects of the voluntary benefit program and how important employee access and working conditions are to a successful voluntary benefit offering. “Successful” is defined as a high employee participation percentage and a thorough understanding of what the employee purchased. According to Eastbridge, almost 70% of employees prefer speaking directly to a licensed insurance professional when making benefit decisions. We find that a broker’s percentage of commissions will more than double compared to the core benefit commissions depending on the voluntary products selected. I’m seeing a stronger broker push towards offering voluntary critical illness, cancer, accident, and term life insurance on an employer sponsored website with call center backup. Brokers retain a higher percentage of commissions when offering voluntary products via website. Website employee participation suffers unless the employee has to enroll via website or call center and the employee has to opt in or out of the voluntary product offering.

James W. Greth, Word & Brown: Many of the worksite companies make the sale and implementation of these products easy for the broker. Enrollment teams offer value-added services including online enrollment that can make the sale efficient and cost effective. These teams also handle claims issues and billing problems, which makes the broker’s involvement minimal in exchange for the commission he or she receives.

Lawrence S. Hazzard, Berkshire Life: The key is finding a car- 
rier that’s focused on customized employee education, hassle-free enrollment, and expert support for benefit administrators past the initial intake period.

Patrick McClelland, VSP: Brokers are always on the lookout for ways to distinguish their services. Providing a full suite of benefit recommendations is one way to do just that. Also, working with insurers that are easy to do business with can reduce the broker’s footwork and follow-up.

Roger McClure, Allstate: Brokers can send their surveys to clients on which voluntary products their employees might be interested in. Voluntary products are designed to fill gaps in core offerings. Initial benefit education and professional consulting ensures utilization of the product or products.

Fred Cook, Assurant: The voluntary benefit segment is the fastest growing segment of the employee benefits business, which makes perfect sense in the environment we’re in. Carriers that offer quality voluntary products, enrollment capabilities, and support can help a broker get a good return on investment for their efforts.

Giovanna Hughes, Colonial: Brokers can get a good return-on-investment by finding a voluntary benefit partner that works with them to become, in a sense, an extension of their agency. Brokers can get a good return by partnering with a voluntary benefit partner that offers a variety of products, enrolls employees in both core and voluntary benefits, and educates employees on the entire benefit program. That partner brings a turnkey approach to enrollments.

Clay Yokota, Trustmark: Given the rising demand for voluntary benefits, brokers who do not offer them risk losing clients. Representing voluntary benefits is a necessity since it is always easier to offer a new benefit to a current client than it is to get a new client.

Steve Eagle, Partner, Seacrest Partners: It’s a value-added sale. There is usually not much noise. Members are usually satisfied. It rounds out your relationship with clients and can serve as a tool to get into a new relationship. Once the camel gets his nose under the tent, wedge selling begins!

3) How can you tell whether a particular voluntary benefit product will provide real value to your clients?

Christopher Bernardine, Aflac: The role of brokers and agents is to serve as a benefits solutions provider for their clients. It is important for insurance sales professionals to listen carefully to their clients’ needs to identify the voluntary products that will provide the best solutions. To determine which voluntary insurance policies will work best for your clients, it is necessary to have product knowledge and a variety of product offerings that can be customized into a benefits package to meet the varying needs of clients and their workforce.

Toney Chimienti, Chimienti & Associates Inc: Spend the time to compare the details of each carrier’s plan design. As the saying goes, “The truth is your best friend.”

Shawn Smith, Transamerica: I think most insurance professionals agree that medical, disability, and life insurance are the three most valuable individual insurance products that every working individual should own. To be competitive in today’s marketplace, employers should offer a well-rounded benefit program with meaningful voluntary benefit products. Most employers have reduced medical benefits by increasing the deductibles and coinsurances to be capable of offering affordable family catastrophic medical coverage. Offering voluntary products that will provide first-dollar benefits directly to the employee for unpredictable accidents and illnesses will help offset the employees “new” financial exposure in their cost-sharing medical plan.

James W. Greth, Word & Brown:
• It strengthens a benefit package by filling in gaps that occur when changes are made to an employer’s benefit offering.
• It offers additional cash payments to employees during a claim event.
• It helps retain and attract better employees.

Lawrence S. Hazzard, Berkshire Life: If it’s coming out of the employee’s paycheck, the broker needs to make a compelling and individualized case for that potential benefit. As I said before, in today’s economy many employees are realizing just how important their ability to earn an income is. So benefit solutions that help protect that ability are more valuable than ever.

Patrick McClelland, VSP: Vision benefits have a proven return-on-investment for employers and employees. The loss of productivity for employees with visual impairments amounts to billions of wasted dollars a year, according to a recent Archives of Ophthalmology report. In addition, dilated eye exams can detect signs of diseases, like diabetes, well before other symptoms become apparent. Early detection is important in managing and treating medical conditions, and mitigating medical costs related to advanced stages of disease. Corporations that offer a vision benefit reap a 94% return on every dollar invested in vision care, via avoided medical costs and improved human capital performance, according to a recent analysis by Human Capital Management Services Inc. These concerns are rising to the forefront as the workforce population ages.

James W. Greth, Word & Brown: The type of coverage bought differs widely by individuals and their needs. However, the enrollment process helps get to the specifics of the employee’s needs. Cancer policies are often sold in white-collar settings and disability coverage crosses into all categories. Accident and small-group life insurance cases see higher blue-collar participation.

Giovanna Hughes, Colonial: When we work with a broker, we partner with the agency to help uncover the client’s benefit program issues. We recommend voluntary benefit solutions to resolve them. The solutions could come from voluntary benefit plans, enrollment management, and benefit communication and education. Each client has different needs. A good voluntary benefit partner will have an array of solutions that can be structured to help each client.

Fred Cook, Assurant: It is very important to understand a product’s features and benefits. Brok-
ers should ask themselves, “What’s in it for the insured?” and “How will the insured benefit at the time of loss?” In addition, evaluating a client’s benefit offerings can help determine if there is a need for a particular product. Does the employer have a dental plan in force? If not, voluntary dental may be a good option to consider. Does the employer offer a disability plan? If not, how would employees be protected in the event of a disability? What are the chances of a disability occurring? The answers a client provides to these types of questions can suggest that a voluntary disability plan would be appropriate.

Roger McClure, Allstate: Blue-collar employees primarily need products that are more protective of income like cancer, disability, or accident coverage while white-collar employees typically lean more toward products like permanent life or long-term care.
Clay Yokota, Trustmark: A benefit counselor should perform a needs analysis with each employee they meet.

Steve Eagle, Partner, Seacrest Partners:
Will it be used?
Is it appreciated?
What does it cost; what’s the return; and is it affordable?
Is it easy to use- is it convenient?

4) Are there certain types of voluntary benefits that go well with different types of employer groups, such as blue collar vs. white collar?

Christopher Bernardine, Aflac: Voluntary insurance products, like short-term disability, can help meet the needs of clients, such as hospital employers with ongoing recruitment and retention concerns due to frequent staff shortages. A 2008 Aflac-commissioned survey, conducted by Strategy One, revealed three-quarters of the 250 registered nurses surveyed said they would prefer to work for an employer that provides voluntary insurance policies, including insurance for short-term disability. Additionally, 87% of the nurses polled believed that voluntary insurance is an important factor when evaluating a current or potential employer. In the survey, nurses reported that 73% of them would like short-term disability; 59% wanted an accident policy and long-term care; followed by 54% wanting a cancer or specified disease policy.

Shawn Smith, Transamerica: The need for voluntary benefits is very similar across all employer demographics. The primary difference would be the amount of protection necessary. Based on incomes, I believe individual long-term care would be one product that I would not offer to a blue-collar group.

Toney Chimienti, Chimienti & Associates Inc: There are areas to consider before offering a menu of benefits to a company, such as existing benefit structures, salary ranges, industry trends, and employee turnover.

Lawrence S. Hazzard, Berkshire Life: Executives typically need more protection than group LTD plans can provide: While they cover a certain percentage of income, there’s usually a limit on how much they’ll pay each month. In addition, group LTD plans rarely cover incentive compensation or bonuses, important sources of income for many of today’s highly compensated employees.

Patrick McClelland, VSP: Vision benefits are becoming a popular voluntary offering, as are other types of ancillary insurance. The bottom line is that employers want to offer cost-effective benefits to help attract and retain employees. One way to do this is to offer benefits that are “best-in-class” even if the benefit is employee-paid.

James W. Greth, Word & Brown: In the current environment, all worksite products have become more popular, particularly critical illness and hospital plans that cover part of the inpatient costs.

Fred Cook, Assurant: Blue-collar groups can be good candidates for voluntary disability coverage. Often, these groups, and groups in the service industry, do not have employer-paid disability insurance due to cost or carrier underwriting restrictions. In general, there is a potential need for voluntary coverage any time there is an absence of employer-paid coverage to protect financial resources in the event of an illness, injury, or unexpected loss.

Roger McClure, Allstate: It is becoming more popular to offer lump sum critical illness/cancer with innovative riders, such as re-occurrence benefits, guaranteed issue, annual increases and occupational HIV for groups, such as healthcare providers, police organizations, and firefighters. Hospital indemnity and accident are also seeing a rise since all of these products serve as excellent gap fillers in a world of ever increasing deductibles and co-payments.

Giovanna Hughes, Colonial: We don’t see that many differences in voluntary benefit choices between blue-collar and white-collar employer groups. Since voluntary benefits can be offered to employees at little or no direct cost to the employer, it makes sense for employers to allow their employees to choose what they need among a variety of voluntary benefits.

Steve Eagle, Partner, Seacrest Partners: Here is the breakdown:
• LTC is more of a white-collar benefit.
• Whole life and critical illness are more blue-collar unless guarantee issue is a concern (whole life).
• With vision, more expensive programs that are private practice network plans cater to white-collar workers and less expensive “big box” network plans cater to blue-collar workers. I like to have a mix of both.
• Voluntary term caters to all age groups for guarantee issue and convenience reasons.
5) Which voluntary benefits are becoming more or less popular?

Christopher Bernardine, Aflac: Voluntary products that offer income replacement, such as short-term disability, are always popular. As the market evolves, employees and employers are looking for more health care coverage options, such as lump sum products that offer more upfront benefits and coverage for recurrences.

Toney Chimienti, Chimienti & Associates Inc: Today more popular plans include critical illness, GAP plans, HSA/ HDHP compatible hospital income plans, voluntary group STD/LTD, term life and life insurance possibly offering LTC riders.

Shawn Smith, Transamerica: In today’s economy, I see bundling of products becoming more popular. Bundling life, long-term care, and critical illness can save an employee, on average, 40% over buying each product on a stand-alone basis. Limited medical plans have become more popular over the past year primarily because economic conditions have forced employers to move full-time employees to part-time status in lieu of layoffs. In-turn, they are hiring more part-time employees as opposed to full-time. In our business, I see cancer insurance loosing some traction to critical illness insurance. Critical illness insurance provides lump sum first dollar benefits for diagnosis of several other illnesses besides cancer.

Lawrence S. Hazzard, Berkshire Life: Life and disability income insurance are still the most common voluntary benefits, with cancer and critical illness products experiencing the greatest growth. I predict that we’ll see a trend toward more voluntary benefits.

James W. Greth, Word & Brown: In the current environment, all worksite products have become more popular, particularly critical illness and hospital plans that cover part of the inpatient costs.

Giovanna Hughes, Colonial: Short-term disability and life insurance rank among the top voluntary benefits most employees want in order to protect their income and provide for loved ones. However, with the increase in major medical premiums and deductibles, we’ve seen a lot more interest this year in voluntary hospital confinement indemnity products. Employees are purchasing this product and using the benefits to help pay for indirect expenses, such as mortgages, utility bills, car payments and childcare.

Clay Yokota, Trustmark: Critical illness insurance sales are on the rise. Critical illness insurance is becoming essential since a serious illness introduces expenses not covered by medical plans and Americans have minimal savings. Critical illness pays a lump sum benefit for illnesses such as cancer, heart attacks, strokes, kidney failure, and organ transplants. Voluntary disability is also getting increasingly popular as employers reevaluate and decrease their core benefit packages, shifting costs to their employees.

6) How do you choose a carrier?

Christopher Bernardine, Aflac: As the marketplace has evolved, employers and their employees want to see more options in health coverage. So it is important for brokers to identify a voluntary carrier that knows how to enhance product offering to support the changing needs of employers and their workers. Carriers that offer a variety of voluntary products that can help provide value to businesses of all sizes, which can be an asset for a broker’s portfolio. For instance, it can be a great way to provide added value when large employers offer a lump sum cancer product that provides more upfront benefits and a critical illness product that provides both more upfront benefits and pays for recurrences and subsequent events. It is also important for brokers to identify carriers with a respected brand and an infrastructure that can support quality customer service and comprehensive enrollment solutions. The bottom line is that it is necessary to partner with a voluntary carrier that can help a broker strengthen relationships with clients by providing benefits solutions.

Shawn Smith, Transamerica: Strong employer support and a strong enrollment team will generally lead to a high employee participation percentage. The enrollment process is just as important, if not more important, than the product.

Toney Chimienti, Chimienti & Associates Inc: At the top of the list is the company’s commitment to support needs of the agent and their clients. Errors can and will occur and people need to be eager, willing, and capable of fixing them when they happen. Then there are underwriting concessions.

Lawrence S. Hazzard, Berkshire Life: It’s even more important than ever to select a carrier with excellent ratings. Look for a carrier with quality products. Third, the carrier should provide true turnkey support that includes easy administration, easy enrollment, and real-life experts available at every step of the process. Finally, and this can be harder to quantify, it’s important to work with a provider that has outreach strategies and personalized materials that fit your client’s communications culture. For example, a law firm may want customized letters and brochures to engage their associates while an ad agency may want HTML e-mails and podcasts. A good carrier allows you to accommodate both preferences easily.

Roger McClure, Allstate: It is more important today than ever for brokers and agents to partner with carriers that offer innovative delivery systems and are responsive to employees’ needs. The delivery combined with innovative back office support is just as important as the product. Choose a carrier you know will be there financially and physically to support the protection you have provided. A+ ratings and strong financial positions are key factors in choosing a partner for the long term.

James W. Greth, Word & Brown: Rate structure and coverage are very similar among carriers. The evaluation comes down to claims and customer service.

Fred Cook, Assurant: The most important factors to consider are financial strength, experience in the business, the quality of products and services, the variety of plan options, enrollment and administrative capabilities and support, the philosophy of the claims organization, and the company’s demonstrated commitment to customer service.

Steve Eagle, Partner, Seacrest Partners: It includes the
following:
1. Reputation, service, people, relationship, and technology.
2. The benefits and the network.
3. The price.

Clay Yokota, Trustmark: The success of a voluntary benefit program depends on superior case setup, benefit counselor training, smooth case implementation, efficient application processing and policy issue, state-of-the art billing, exceptional customer service, and excellent claim processing.

7) When you are presenting voluntary products, do some types of coverages just naturally sell well together?

Christopher Bernardine, Aflac: Offering voluntary insurance product combinations can make good business sense. For instance, an accident policy with a personal sickness indemnity plan can help provide policyholders with a wider breadth of coverage. And a Cancer policy with a specified health event product can offer policyholders coverage for events that are most likely to result in financial hardships. We have found that employers are more likely to offer a portfolio when a cancer policy and specified health event plan are paired.

Toney Chimienti, Chimienti & Associates Inc: When assisting a broker implement a controlled healthcare budget, we offer GAP plans with critical illness and LTC plans. We often develop GI HSA compatible critical illness, accident, and STD options for the companies benefit menu.

Shawn Smith, Transamerica: In a small group market, the combination of guaranteed issue Gap plan, critical illness, and accident insurance naturally complement one another and affect the utilization of the medical plan. For part-time employees, limited medical with dental, vision and short-term disability work well together from a pricing and underwriting perspective.

James W. Greth, Word & Brown: Some good pairings include critical illness and cancer; accident and hospital; and disability and life.

Patrick McClelland, VSP: Vision and dental coverage have traditionally been packaged together. They’re both benefits that employees ask for and they are affordable compared to traditional medical coverage.

Roger McClure, Allstate: Accident products with disability riders often work well as a package. Also, hospitalization and accident products can work well together since they can fill gaps of high deductible plans for inpatient and outpatient services that result from sickness or accidents.

Lawrence S. Hazzard, Berkshire Life: In addition to individual DI, our company offers long-term care insurance. Those offerings can be discussed together even in a worksite setting. During an economic downturn, people suddenly experience fewer choices in their lives. It makes them think about the kinds of choices that will be most important to them at a more vulnerable stage of life and whether they are willing to risk not having these choices.

Fred Cook, Assurant: PPO voluntary dental and prepaid dental sell well together as do life and disability insurance. Other popular product combinations that sell well are critical illness and accident coverage and accident and short-term disability coverage.

Giovanna Hughes, Colonial: Some products do have natural affinities. Life and disability insurance are two good products that can help provide income protection in the event of a disability or death. Some employees with a family history of cancer, heart disease, or other serious illnesses want to pair a critical illness or cancer plan with their major medical. Since the employee has unique coverage needs depending on their medical history, family status and life-event changes, it’s important for employers to offer a variety of personal insurance products.

Steve Eagle, Partner, Seacrest Partners: Vision and dental play well together since both provide immediate return on the dollar from usage and wellness standpoint. Products that also work well together are whole life, universal life, and critical illness STD and LTD likewise work well together.

8) How do you present voluntary benefits in a way that doesn’t overwhelm employees with confusing options?

Christopher Bernardine, Aflac: Establishing yourself as a benefits solution provider is a must for agents and brokers during the current economy. During challenging economic times, when customers are carefully reevaluating their finances, brokers and agents have an even greater opportunity to serve as solutions providers. Listening to your client and becoming more of an advocate will not only help sustain your sales operation during an economic downturn, but it will also better equip you to provide the quality service necessary to help employees safeguard their families and help business owners protect their companies. Voluntary Insurance is not a one-size fits all purchase. The purchase should be based on a client’s needs. However, many clients remain uninformed because they don’t invest enough time in providing benefit education. It is important to spend enough time with clients to identify their needs and to educate them on which voluntary products can provide real solutions for those needs.

Toney Chimienti, Chimienti & Associates Inc: Keep the focus on a couple of key plan designs that address their needs based on their total benefit package. Also, create illustrative claim examples that make it easy for the employees to see how the plan would fit into their benefit package.

Shawn Smith, Transamerica: Keep it simple. My experience is that you should never offer more than two new voluntary benefit programs annually. It’s best if the two products do not compete for participation and premium, such as offering a separate accident and disability insurance or critical illness and cancer insurance during a first time offering. I have always been a believer in offering the same riders to all the employees or the same riders to all the employees in a certain employer classification. When offering life insurance, we find that 75% of employees will buy permanent over term due to their long-term life insurance needs. The simple fact is that most employees already own some level of term life insurance.

Patrick McClelland, VSP: Put the spreadsheets down and really look at the out-of-pocket cost and benefits for the employees. Benefit managers may be tempted to choose a bargain plan that’s 7% less than a premier product. However, the additional cost of the more robust premier product may add less than $1 per paycheck

James W. Greth, Word & Brown: Keep the number of offerings to a minimum at any one time. More than two or three offerings can be confusing if presented at the same time. It is also easier for employees if you offer worksite products some months after the open enrollment process, especially if there are changes to their benefit plan options.

Lawrence S. Hazzard, Berkshire Life: Many benefit packages default to lingo and load up on options that don’t help employees understand what is being offered, not to mention what is best for their individual situation. I call it the “Chinese take-out menu” approach and it never works. It’s far more effective to use everyday language to enable employees to relate to their own live and to provide a handful of options that have clear trade-offs.

Roger McClure, Allstate: Only provide one or two products, and don’t make too many options available for each product offered. Benefit counselors should be able to concentrate their limited time with each employee on explaining the value of the products, instead of all of the different options that are available. Providing guaranteed issue underwriting is also very important, so employees can obtain adequate coverage without answering multiple health questions.

Fred Cook, Assurant: A focus on personalization when presenting voluntary benefits can be very helpful for employees. When they receive enrollment materials created specifically for them that outline the products being offered and exactly how much each will cost them personally, the decision-making process is much easier for them.

Roger McClure, Allstate: Yes, we believe that unbundling is occurring more and more in the industry. However, if a quality, highly rated voluntary benefit carrier has a vast product portfolio, it can offer brokers and their clients creative servicing solutions and a sound wellness program to go with their voluntary products, unbundling becomes unnecessary.

Clay Yokota, Trustmark: Benefit counselors are consultative professionals who are specially trained to ask needs-based questions to help employees determine what is best for them. Most benefit counselors are licensed agents who are paid per day, and not based on commission. The consultation is typically done with a workbook and a laptop computer. A well-designed consultation, that offers a limited number of voluntary benefits during the first enrollment, simplifies the benefit presentation and makes it easy for employees to understand. Adding new benefits and benefit enhancements in future enrollments will help employees continue to build out their financial protection without overwhelming them and without straining their budgets.

Steve Eagle, Partner, Seacrest Partners: Don’t introduce too many benefits at one time. Have a communications strategy that includes the following
• Announcement letter.
• Print material explaining core and voluntary benefits. This piece should also speak to the values and mission of the organization.
• One-on-one enrollment to discuss core and voluntary benefits.

9) Do you see more unbundling of voluntary benefit options?

Christopher Bernardine, Aflac: Again, offering voluntary insurance product combinations can make good business sense. It is always a good business practice to offer a life insurance policy with other voluntary benefits. Studies conducted by LIMRA International Inc. indicate that 56% of married parents believe their life insurance coverage is inadequate and 43% of them want to apply for new or additional coverage in the next year.

Shawn Smith, Transamerica: I’m seeing more bundling than unbundling in today’s economy. I refer to bundling as combining products under one policy. The discounts, preferred underwriting, and benefits are compelling reasons to bundle products. We can offer products stand-alone or bundled, but I see a much greater value for the employee disposable dollar when bundling products.

Toney Chimienti, Chimienti & Associates Inc: In certain instances, bundled benefit options can create more comprehensive solutions that can be tailored to their needs.

Patrick McClelland, VSP: We’re actually seeing increased bundling of voluntary benefits.

James W. Greth, Word & Brown: Yes, there are often carrier discounts for offering or purchasing more than one coverage during an open enrollment.

10) Do you have anything else to add about voluntary benefits?

Christopher Bernardine, Aflac: Now more than ever, voluntary benefits can serve as a valuable tool in helping workers safeguard their ability to earn an income against an unexpected health event. And because they come at no direct cost to the business owner, voluntary benefits are an added value for employers as well. These products can help offer real solutions for these times.

Shawn Smith, Transamerica: The voluntary benefit market is consistently evolving with the changes to healthcare. Carriers must be aware of the constant change and offer competitive products that fit the needs of our working class. Our target market is the 80% of the employee population who earn an hourly wage. The hourly waged employees are most affected when the cost of healthcare increases, which leads to higher personal financial exposure at the doctor’s office and hospitals. Most of our products include a wellness benefit rider. We are experiencing higher utilization for wellness claims. Hopefully the wellness trend will continue to rise.

James W. Greth, Word & Brown: Voluntary products are becoming one of the fastest-growing areas of the benefit arena. Higher group benefit costs and reductions of benefit plans make the addition of voluntary products almost a must in any well-orchestrated package.

Lawrence S. Hazzard, Berkshire Life: Just this: voluntary benefits tend to target the individual because they’re administered at the worksite. But, in most cases, a spouse, partner, and other dependents can be effected by the decisions that are made. It’s a moral imperative for carriers and brokers to think about ways to engage other family members in the discussion.

Giovanna Hughes, Colonial: We’re noticing a greater interest among employers for effective benefit communication and education. Most human resources departments are doing the same work they’ve always done, but with fewer people. A comprehensive benefit enrollment for open enrollment and new hires can be a strain on already-tight resources. Plus, many businesses have multiple locations, multiple shifts, and employees who don’t work in an office. With shrinking resources and logistical issues, it’s getting harder for employers to communicate benefits and enroll their employees. Although a good benefit package is critical to helping retain and attract quality employees, benefits are meaningless unless employees understand them. Employees have very important benefit decisions to make and they need help. Traditional one-to-one enrollment offers the most employee engagement and the best opportunity to help employees make good benefit decisions. Allowing a benefit professional to spend 15 to 30 minutes with each employee can go a long way toward helping employees understand what the employer provides and having them appreciate the benefit program. Brokers who provide benefit communication and education for clients can strengthen their agency’s offering and help keep the competition out of their accounts.

Clay Yokota, Trustmark: It is critical for employee benefit brokers and consultants to consider voluntary benefits as a part of their practice. Brokers and consultants are increasingly realizing that they now have two customers: employers who are concerned about the cost of protecting their employees and employees who are concerned about protecting their financial well-being.

Steve Eagle, Partner, Seacrest Partners: I think that vision is a quiet little benefit that has become of age due to advance of new lens technology and the distribution system. Vision carriers and plans need to be louder in the way they approach brokers to keep them ever mindful of the value of vision benefits and what it can mean in the way of new sales and the prospect of opening new doors to increased client market share in all lines of coverage.

Patrick McClelland, VSP: With an increasingly aging workforce, offering ancillary benefits, such as vision coverage, on a voluntary basis gives the employer a cost-efficient way to accommodate the needs of these valued and tenured employees while retaining and attracting experienced talent. In addition, offering a full suite of gold-standard benefit enhances a broker’s reputation and builds trust with their client base.