A recent study by Aflac of dental plan consumers shows not just an increased appetite for supplementary dental care but also a much larger opportunity for brokers and consultants working in the voluntary benefits markets.
The study canvassed 1,000 consumers and pointed to increased opportunities for those in the voluntary benefits market.
Among the key findings:
–Although 86% of consumers said employer-offered dental benefits are important, as many as one-third are not offered dental plans at work.
–Nearly half of those surveyed said their plans require them to pay a deductible or co-pay, suggesting that dental care is a considerable out-of pocket cost even for consumers with coverage.
–Nearly two-thirds said they worry about covering the cost of dental procedures, and more than half have skipped or put off dental care as a result of cost.
–Respondents’ income level and out-of-pocket expenses appeared to be directly linked, with consumers in lower income brackets more likely to pay out-of-pocket for their dental care than did consumers with annual salaries over $70,000.
–82% said the ability to choose their own dentist is important, and 77% prefered a dental plan without coverage restrictions.
–59% said it is important to have a dental plan that is portable if they leave an employer for any reason.
–Only 12% have a dental plan through their employer that covers all dental expenses.
–58% would prefer their employer to offer more options for dental coverage.
–70% of respondents who were offered no dental coverage through work are between 35 and 54 years old, when covering dependents is a significant responsibility.
–Women are more likely (36%) than men (29%) to work for a company with no dental plan.
–Respondents making $30,000 – $60,000 annually were nearly twice as likely to work for a company without dental benefits than were respondents making more than $70,000.
Ron Agypt, Aflac’s vice president of market development and broker sales in the U.S., cited a prediction from the National Association of Dental Plans that 15% of employers providing dental plans will likely cease doing so as a result of health care reform. The voluntary market is ready to ease that transition, Agypt said.
He noted that nine out of 10 consumers want an employer-offered dental program, yet only one in three actually get one at work. And of that those with a dental plan, only 10% feel that they have excellent coverage, leaving a 3.3% sliver of highly satisfied consumers. That provides the market with plenty of untapped potential.
Consumers between the ages of 35 and 54 represent a special opportunity for voluntary coverage. “If you think of those ages, that’s right in the family age group,” Agypt said. “This is a big issue for America, and it’s a big issue for people and for their employers who want to do right by employees but can’t for reasons such as cost.”
Agypt sees a parallel between Aflac’s market penetration in Japan, where it sells voluntary products to one in four Japanese despite an established national healthcare program and a prolonged down economy. It all points to opportunities to increase supplemental insurance sales despite larger economic obstacles, and it is a lesson that translates directly to the U.S. market.
Agypt is already seeing fewer customers for voluntary benefits at the employer site thanks to affordability. But he notes that policyholders are starting to buy more coverage than before, because they no longer feel they can count on their employers for security. This is providing brokers with a golden opportunity, he says.
“In my 20 years in this business, I have never seen brokers as engaged in voluntary benefits as they are today,” he says.
Because of healthcare reform (particularly medical loss ratio standards), brokers are concerned about their commissions and are being asked to do more with less, Agypt notes. This is driving them to adopt a holistic approach toward benefits in general.
“In the old days, you could be a medical consultant and do that only and make a good living. Or you could do the same as a group benefits broker. But we’re not seeing that today,” Agypt said. Instead, clients are expecting their brokers and consultants to provide solutions in four key areas–medical coverage that can withstand the transitions of Obamacare, group products that keep businesses competitive (mainly by helping them retain personnel), good ancillary and voluntary products to protect families that must pay for their own healthcare, and finally, educating employees about all these needs.
“This is driving brokers to outsource this and bring an entire team to the table,” Agypt said. “We’re seeing brokers and consultants evolving to be more rounded and more robust.”