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October 19, 2009 at 08:00 PM
The Great Recession may be increasing pressure on insurers and producers to sell vision plans together with dental plans.
Insurers, agents and brokers have been trying to bundle “ancillary benefits” for years. AlwaysCare Benefits, for example, has been offering vision benefits along with voluntary dental programs since 1999.
“The more we got into the dental market, the more people were asking us for vision coverage,” says Erich Sternberg, president of AlwaysCare, Baton Rouge, La. “It just makes sense.” Helping workers pay for both dental and vision care is a good way to improve their overall health, he says.
Today, employers see buying ancillary benefits in packages as a way to save on premiums and reduce administrative burdens on human resources and benefits managers.
The recession also appears to be increasing the curb appeal of dental and vision benefits.
Fewer U.S. civilian employees have access to employer-sponsored dental and vision benefits than to employer-sponsored major medical benefits, but the take-up rates are higher for dental and vision benefits. The gap is even bigger for the lowest-income employees: For workers with incomes in the bottom 25%, the take-up rate is 65% for dental and 64% for vision, compared with 59% for major medical, according to the Bureau of Labor Statistics.
In the fourth quarter of 2008, when the financial system was teetering and layoffs surged, “retirement benefits and all other nonmedical benefits (such as life, dental, disability, vision, etc.) increased in importance as factors contributing to a sense of loyalty,” according to analysts at a unit of MetLife Inc., New York.
The percentage of employees who said retirement benefits and ancillary benefits improved their sense of loyalty to employers increased to 69% in November 2008, from 51% just a year earlier, the MetLife analysts report.
In the individual market, the recession is increasing the total number of potential prospects for individual dental and vision products by causing:
–some employers to drop ancillary benefits;
–more of the employers that still offer ancillary benefits to lay off employees; and
–many consumers to think harder about risk management.
