New Breed Of Worksite Brokers And Products Emerging
There are changes going on in the world of voluntary worksite products, both in the nature of the products being sold and the new breed of broker that is selling them.
Traditionally, worksite-focused brokers sold individual products on a payroll deduction basis. A few employee benefit brokers sold voluntary (100% employee-paid) versions of their core benefit plans (term life, short- and long-term disability). The world was fairly neat and clean. The worksite-focused broker used a one-on-one enrollment process, while the employee benefit broker used a self-enroll or group meeting process. There were clear distinctions (at least for carriers and brokers) between the individual worksite product and the group voluntary product.
But that is not true today. That neatly divided world (if it ever really existed) has been turned on its head. Brokers are selling all types of products using a variety of enrollment systems, and its getting harder and harder to tell a group plan from an individual one.
In the product arena, most of the stereotypes about group or individual products are gone (or at least on their way out). When looking at the products currently on the market, we see that the individual platform products are often offered as guaranteed issue plans (previously a group characteristic) during the enrollment period. In fact, as shown in the chart, 60% of carriers agree that guaranteed issue products are a requirement for the worksite market (and 22% strongly agree).
Another change for the traditional worksite market is in the enrollment method used. Today, individual worksite products are increasingly enrolled during group meetings (traditionally a group trait).
Changing the world on the group side, voluntary group products today have significantly lower participation requirements than they did historically, and many have portability or conversion privileges that allow them to be continued when the employee changes jobs, in much the same manner as an individual plan. In a recent survey of carriers, 78% said portability or a similar conversion privilege is necessary.
In addition, group carriers have begun to understand that they need to maintain records on all covered employees. Seventy-eight percent agreed this is needed.
Group carriers are also looking for ways to build more customer-intimate relationships with employees and provide advice to them. Several already enroll using one-on-one systems.
In summary, there are increasing numbers of exceptions to every rule that used to separate the two worlds. The old-fashioned distinctions mean less and less to employer and employee customers and are becoming irrelevant to brokers.
New Breed Of Broker
Changes are also occurring on the broker side. For some time now, Eastbridge Consulting Group has suggested the likely blending of the traditional group, worksite and even pension distribution channels into a new breed of broker the benefits advisor. These new distributors will be independent and offer to their clients a wide array of both protection and asset accumulation-management products.
Several recently completed Eastbridge surveys of brokers have reinforced that this trend is already well underway. Consider these findings: