Employers prefer to buy voluntary employee benefits from known carriers but also give great weight to the recommendations of financial advisors when deciding which products to offer in the workplace, research by LIMRA International, Windsor, Conn. finds.

LIMRA’s study, Voluntary Benefits Selection: Examining Employer Practices and Preferences, looks at worksite benefits offered in 2006 by U.S. businesses with 10 or more employees.

It found that when choosing voluntary benefits, 65% of businesses prefer to deal with carriers that are providing at least some of their existing, employer-paid benefits, up from 55% in 2002. Only 15% chose voluntary benefit carriers they were not already dealing with for company-paid benefits, down from 24% in 2002. The remaining 20% said it did not matter whether or not they had dealt with the worksite carrier previously; about the same proportion that said so 4 years earlier.

When choosing voluntary benefit carriers, 61% of employers cited brand-name recognition as important, up from 55% in 2002, while 60% said producer recommendations were important, just above the 59% that said so 4 years earlier. Having a prior relationship with the insurance carrier was cited as important by 41%, compared to 38% in 2002. (Most cited more than one factor as important.)

Once they had decided to offer a voluntary benefit, significant numbers of employers turned to producers for expert advice on which insurer should provide the plan, LIMRA found.

“This is where professional agents and brokers add additional value to the worksite sales process,” LIMRA’s study report states. “Their experience, industry knowledge and carrier relationships are crucial in earning the client’s trust.”

LIMRA also found that a producer’s previous relationship with a carrier was a significant consideration in an employer’s decision to choose a carrier recommended by an agent or broker.

Whether voluntary or employer-paid, only 16% of companies said they used just one carrier for insurance products, 31% used 2 and 27% used 3. Most of the remainder used 4 or more carriers.

For retirement plans, 78% used only one carrier, 12% used 2, 3% used 3 and 5% used 4 or more carriers. (The remainder did not know or had no plan.)

As for advisors involved in their worksite benefit programs, 31% said they used only one, while 27% used 2, 22% used 3 and 17% used 4 or more.

Many employers use more than one worksite advisor because not all advisors are equally knowledgeable about all benefits, LIMRA notes. Its study showed, however, that 68% of firms would prefer working with one advisor for life and health products, and 77% would rather have one advisor for retirement and savings benefits.

When selecting plans, employers strongly favored guaranteed issue (83% said this was important), along with portability (61%).

Once they had decided to offer a voluntary plan, employers sought to assure high participation by using a variety of communication tactics.

Smaller firms favored meetings (32%) to announce upcoming voluntary enrollments, while large firms (1,000 workers or more) preferred flyers and mailers sent to employees’ offices (58%) or homes (35%). Payroll stuffers, e-mail and workplace posters were also widely used by firms of all sizes.

To help drum up interest in a benefit, employers also liked to give plenty of notice, with 53% preferring to give 3 to 4 weeks’ notice before enrollment, and 23% giving 5 weeks or more. Larger employers tended to give the most ample notice, with 51% notifying employees at least 5 weeks ahead of enrollment.

To further boost enrollment, employers showed a strong preference for receiving informational materials well in advance (74)%, the availability of call-center support (63%), and the use of personalized enrollment forms prefilled with each employee’s individual information (58%). One-on-one enrollment meetings were deemed important by 55%.

Almost all of employers (97%) still offer paper-based enrollments, but many also allow employees to sign up by laptop (60%) and by call centers (42%). LIMRA also found growing use of enrollment via the Internet (23%, up from 9% in 2002) and interactive voice-recognition telephone systems (16%, up from 6%).

“While paper will remain available to employees well into the foreseeable future, some larger companies are eliminating this option altogether,” says Ron Neyer, a LIMRA analyst who wrote the study report.

Larger companies favor network-based methods, especially Intranet, compared to laptop enrollments, due to the challenges of signing up large numbers of employees, he says.