The workplace continues to be an important channel for long term care insurance sales. As LIMRA International found, 51% of individuals who purchased LTC insurance in 2008 bought their coverage through an employer-based plan.
Many of these plans are voluntary, employee-pay-all offerings. A key measure of success for voluntary LTC insurance plans is participation–from employees as well as others eligible for the plan. Strong participation eases the risk of reduced underwriting. It also increases sales and marketing efficiency by spreading these expenses over a larger number of employees and beneficiaries.
A number of employer factors can help the voluntary benefit producer determine whether a plan will achieve maximum participation. Knowing these factors can help in determining where to focus sales efforts.
Factors influencing success
MetLife was one of the sponsors of a survey in 2009 that posed questions to benefits managers at companies of various sizes–some with above-average LTC insurance plan participation and others with below-average participation. The benefits managers were asked 12 questions designed to identify the factors most important to the enrollment success of an LTC insurance plan.
The findings of the survey suggest that there are many factors influencing the success of an employer-sponsored LTC insurance plan in enrolling employees. These include characteristics of the employer, such as:
–The reason the employer elected to offer the plan;
–The size of the employer;
–The geographic dispersion of the employer’s employee population; and
–The employer’s experience with participation in other voluntary benefit offerings.
The characteristics of the employee population were also found to be relevant to enrollment success, in particular, the age and income of the employees and the general level of long term care awareness.
Other significant factors included the mechanics of the enrollment and communications process, such as the availability and use of e-mail communications and other employer-sponsored communications; group meetings; face-to-face meetings; and online enrollment.
The survey also found that whether the employer enrolled the LTC insurance plan “on-cycle” or “off-cycle” makes a difference–in other words, whether the LTC insurance benefit was offered concurrent with or separate from other employee benefit offerings.
While these factors were all found to influence enrollment success to varying degrees, there was strong agreement among benefits managers that employer support was the most important factor affecting enrollment success. The survey results suggest that strong employer support could turn what would otherwise be an average outcome into superior results and could overcome many inhibiting factors such as lower average income and lower average age demographics within a population of participating employees.
Measurable employer support
Employer support can be difficult to quantify because it occurs in many different forms, some of which can be highly subjective. But there are still forms of employer support that can be measured. These include: