Limited-benefit medical plans and related products continue to generate buzz in the voluntary benefits market.
All the big health insurers and many others believe they have to offer “mini medical” coverage or other limited-benefit health coverage “because brokers want to talk about it” to their clients, said Gil Lowerre, president of Eastbridge Consulting Group Inc., Avon, Conn.
Lowerre talked about his views on the evolution of the employee-paid benefits market here Wednesday at a session at the annual disability insurance conference organized by JHA, Portland, Maine, a unit of General Re Corp., Stamford, Conn.
Mini med plans tend to be accepted as an alternative for seasonal workers, part-timers and others workers who are not eligible for employer-sponsored major-medical coverage.
But “they’re creeping out of that niche and showing up in other places,” Lowerre said, suggesting that problems could surface if mini med plans start to replace traditional group health coverage.
Long term care insurance is another door opener, but it’s also “everybody’s favorite product for next year,” Lowerre said. “Somehow, next year never gets here.” Meanwhile, insurers tend to say that their own limited-benefit health insurance programs are not growing all that well but that they believe limited-benefit health insurance is a growth product for the voluntary benefits industry. That may be a sign that the products are doing less well than insurance industry executives tend to believe, Lowerre said.
Lowerre predicted that the voluntary benefits themselves will become more of a commodity and that, just as financial advice tends to be the main sales proposition in the 401(k) plan market, benefits advice will become the key selling point for voluntary benefits.
“We’re going down the same road” as the 401(k) market players, Lowerre said.