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Health care reform: The voluntary benefits opportunity of a lifetime?

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Remember those old-style carnival barkers who’d lure townspeople into mysterious tent shows by promising the opportunity of a lifetime? Odds are most of those opportunities weren’t all they were cracked up to be.

Today’s insurance brokers and agents, however, really do have the chance to take advantage of the sales opportunity of a lifetime. Believe it or not, they have health care reform to thank for it.

It’s no secret that when it comes to health care coverage and costs, Americans’ heads are spinning. Employers, workers and even some benefits experts are dizzy from the merry-go-round of changes to the way benefits are purchased, delivered and paid for.

One thing that shows no sign of changing is the effort businesses are making to reduce employer-paid health care costs. For the past several years, budget-conscious companies have looked for ways to control their benefits-related spending, not only by eliminating some employer-paid coverage but also by shifting costs to workers in the form of increased co-payments and deductibles.

While businesses look for ways to trim costs, workers are searching for ways to guard against the fiscal implosion that often accompanies serious injury or illness. An increasing number of companies are soothing employees’ fears by adding voluntary insurance to their benefits options, opening the door for benefits experts to reach out and grab the brass ring.

Smart brokers and agents are using the calm before the reform-implementation storm to generate buzz — and business. They’re rightly telling companies that now’s the time to add voluntary policies to employees’ benefits options. By doing so, they’ll help ease the fears of workers unsettled by health care reform and, at the same time, position themselves to retain high performers and lure top-tier new ones.

Workforce attrition should be high on business leaders’ minds right now because human resources professionals predict significant upswings in turnover as the recession winds down and companies begin hiring again. What’s more, PwC Sarasota research and analysis shows it’s not just rank-and-file employees who are eyeing the exits. In 2010, 4.4 percent of high performers left their jobs, an increase of nearly 19 percent over 2009, and that trend is expected to continue.

According to the 2013 Aflac WorkForces Report, strong benefits plans give companies the ammunition needed to keep workers from straying. When asked what their employers could do to convince them to remain in their jobs, 49 percent of workers who participated in the Aflac study said, “Improve my benefits package.”

Voluntary insurance appeals to workers because it allows them to select coverage that meets their families’ needs in amounts that fit most budgets. According to the Aflac study, some employers don’t make voluntary options available because they don’t think workers are interested, yet 60 percent of employees said they’d be interested in purchasing coverage if given the opportunity.

Introducing voluntary benefits

So, once a company has made the decision to add voluntary benefits to its roster of health insurance choices, where does it start?

One way is by surveying employees to identify the most-desired voluntary options and offering the plans with the most interest. Overwhelming employees with too many choices at once can be just as ineffective as not providing enough options to select from. Most employers will find workers are most interested in these types of voluntary coverage:

  • Disability insurance, which protects a worker’s most valuable asset — the ability to earn a living. Disability benefits pay a portion of an employee’s income while he or she is disabled and unable to work.
  • Life insurance, which is a high-demand benefit, especially in shaky financial times. It’s most appealing to workers who want to protect their families’ lifestyles if the worst should happen. Benefits can be used to pay for immediate needs, such as funeral expenses, medical costs and current bills and debts. They can also be used to pay for future needs, including ongoing financial obligations, education costs and retirement expenses.
  • Dental coverage, which is a high-value proposition for several reasons: It’s often inexpensive, oral health is closely tied to overall health, and many companies are discontinuing employer-paid dental coverage. Supplemental dental plans can help pay for procedures such as cleanings, checkups, fillings, X-rays, sealants, emergency care and more.
  • Accident insurance, which allows workers to stay ahead of the out-of-pocket expenses that add up quickly after an unexpected health event. Benefits can be used to help pay for emergency treatment, hospital stays and medical exams, as well as for treatment-related transportation and lodging.
  • Critical care and recovery insurance, which helps pay for treatment related to serious, life-altering events, such as heart attacks, strokes, kidney failure or third-degree burns.

By adding voluntary plans to their employee-benefits menus, businesses help give workers much-needed peace of mind. And because voluntary premiums are employee-paid, the additions may have no direct effect on companies’ bottom lines.

A well thought-out roster of health insurance options also leads to increased employee contentment. Among employees whose companies offer voluntary benefits, 60 percent say they’re not likely to look for new jobs within the next year, compared to 49 percent of those who are not offered voluntary options.

Workers with voluntary benefits also give their employers higher marks on job-satisfaction indicators. They are more likely to believe their companies are known as great places to work and that their employers take care of workers, and they’re also more likely to recommend their workplaces to friends.

The bottom line? Benefits advisors should seize this opportunity to prove their value to current and potential accounts. By steering companies toward voluntary benefits options, they’ll help employers step off the tilt-a-whirl of today’s volatile U.S. health care system and ease their economic and reform-related concerns. They’ll also be instrumental in giving workers more control over their finances by opening the door to coverage that meets their health care needs as well as their families’ budgets.

For more, see:

Administering cutting edge benefits administration

Why President Obama isn’t hitting the insurance companies

Inside the war room


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