National health care reform – combined with the empowerment of consumers and today’s accessible, secure technology – is changing how, when, and which benefits are sold. While this is true for all insurance markets, it is particularly true for such voluntary products as disability insurance (DI).
It’s no secret that in today’s environment, employers are less able to pay for benefits that were once considered standard. Some employers provide only long-term disability coverage, leaving employees to decide whether to purchase short-term disability on their own or tough out the six-month gap in coverage, often at great personal expense. In many cases, employees are being asked to pay for all of their disability coverage.
Because of the move from employer-paid to employee-paid coverage, the role of the benefits “gatekeeper” is also changing. To remain relevant and profitable, we must all re-evaluate the ways in which we communicate with our clients and reach the end users.
Traditionally, three sets of employee benefits gatekeepers have managed the sales process:
- Brokers sold the products
- Employers decided which insurance products to offer employees
- Employees enrolled or applied for benefits
The employee role has traditionally been the most passive and the least marketed to, but the roles are beginning to shift. Now, more and more employees pay for some, if not all, of the premium. And because employees are being asked to pay for more of their benefits, they will soon play a bigger role in selecting products; the benefits that constitute the products; and the ways that products are communicated, purchased, and paid for.
The “consumerization” of employee benefits encompasses all products – DI included – which means that the gatekeeper role is evolving into the new role of educator and super-consumer advocate.
As we embark on this journey, there are a few changes to keep in mind.
Health care reform
Legislation is still being written and interpreted. As we head toward 2014, employers will have many questions about health care reform, and will need our guidance in order to make informed decisions that could have far-reaching consequences. Carriers and brokers have a responsibility to provide this guidance for both immediate solutions and flexible- long-term solutions.
Hierarchy of needs
While employers spend time and energy on major medical products, such employee-paid benefits as DI, dental insurance, and life insurance receive less and less attention. Carrier and brokers need to find ways to promote these products, as well, perhaps by providing simple and effective communication tools. This group may even want to explore new forms of media in order to reach and educate employees.
The enrollment process is also evolving. As a factor of more employee involvement and funding, employees will spend more time researching the benefits available to them. Employees may also include family members in the decision-making process, leading to the need for employees to access benefits information and guidance at the most convenient times and places for them – such as their home – rather than only at the work place.
In the employee-driven world, the traditional lines between worksite and group voluntary products will fade away. Employees won’t care how the insurance industry classifies certain benefits; instead, they will want access to the coverage they need and will buy based on their access to the desired benefits.
Look for a more competitive DI market in which products will be easier to understand and enroll. As benefits are simplified, we will see more guaranteed issue coverage and levelized commissions for agents.
Educated and satisfied consumers will benefit from online capabilities with dialogue tools featuring questions and answers about the consumer’s individual needs, based on their lifestyle. We need to embrace new media to reach employees and new delivery techniques that employees want to use for access to content and information.
Successful DI products will be easier to understand and communicate to the employee. Look for simplicity of design in the product, the communication, and the enrollment process (call center, Web tool, in person, etc.). In some cases, the consumer will be less focused on the product and more on the process.
Choosing to change
This climate of change can feel chaotic, confusing, and threatening to all involved in the process. However, knowledge is truly the power that allows us to succeed. As we reinvent our roles, remember that our clients — both employers and employees — need us now more than ever.
Steve Howard is vice president of benefit solutions at American General Life Companies. He can be reached at [email protected].