Three Voluntary Selling Points

The cliche about making lemonade out of lemons applies here. But instead of offering generalities, here are three ways voluntary plans can be immediately positioned to help employers address benefits challenges in this changing market:

Flexibility: Traditional major medical plans provided by employers are designed to cover a group of people, and often have limited flexibility in covering individual employee needs, Voluntary, ancillary plans can provide new alternatives to supplement medical plans by offering solutions that meet the varied needs of different demographic groups within their workforces. Younger employees without children who have active lifestyles may be drawn to hospitalization or accident plans, while older employees with family needs may find that critical illness products are important to their needs. There is no reason why an employer can’t offer both in one enrollment, and products can be offered by the same carrier for an easier and more efficient enrollment.

Lower costs by packaging voluntary plans with HDHPs and HSAs: To cope with higher medical insurance costs, many employers are switching to high-deductible health care plans or Health Savings Accounts. In these cases, voluntary benefits that pay lump-sum or scheduled benefits can help employees by filling the void in coverage, helping them cover the cost of deductibles, coinsurance, and other out-of-pocket expenses. In addition, many voluntary plans will pay specified benefits for routine prevention and wellness such as doctor’s appointments and medical tests.

Avoid healthcare reform regulations: Indemnity-based plans that pay lump-sum benefits such as Critical Illness, or Accident plans that provide for a schedule of benefits, do not fall under the Affordable Care Act, so employers avoid the burden of additional paperwork and oversight if they offer such plans.

Steve Howard is vice president of marketing and strategy for American General Benefit Solutions (Benefit Solutions), a business unit of American General Life Companies. His monthly blog on ASJonline addresses issues and trends in the insurance industry. He can be reached at [email protected].