Marketing Worksite Benefits To Independent Contractors

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With the potential for thousands of individual sales, consumer companies that sell their products through independent contractors offer a potentially lucrative market. But how do you sell worksite benefits, which normally require payroll deductions for premium, to people who are working strictly on commission, with no regular paycheck?

Lawrence Prichard, a managing general agent in Dayton, Ohio, for Colonial Supplemental Insurance, says the answer is to use a third party administrator to take monthly premiums either directly out of the checking accounts of these “1099 employees,” or to charge the premiums to their charge cards.

(They’re called 1099 employees after the IRS form that’s used to report their income.)

A new venture, Comprehensive Benefits Consultants of Ohio, formed by Prichard and two associates, is offering 8 supplemental products to 100,000 independent contractors working for Tupperware Corporation, Kissimmee, Fla.

Prichard arranged with insurance carriers to accept premiums that way for a variety of worksite-style products. For its part, Tupperware sees the addition of worksite benefits as a big plus in attracting salespeople who want to work for themselves, but also want group rates on health and other insurance benefits.

“We took a two-year marketing plan to our carriers to show them how we could sell these products and take the premiums from credit card or bank accounts,” Prichard says. “If we hadn’t had a marketing plan, I don’t think any would have been interested.”

In a nutshell, the marketing plan called for Prichard and his associates, Rick Beyland and Timothy Ways, to offer enrollment through the Internet, while providing training for Tupperware’s district managers so that they can present the worksite products to their recruits.

Pritchard’s agency is also targeting other mass-marketers.

“Now that we have a model in place, we think we can take it to other companies that sell a lot through independent contractors who can’t get benefits. There’s millions of them,” Pritchard says.


Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.