The Benefits Selling/Eastbridge Voluntary survey was conducted again this year, and more than 325 brokers — a combination of employee benefit brokers, traditional voluntary brokers, enrollment companies, etc. — responded. While the participant diversity masks some of the trends that differentiate broker segments, this cross-section gives us a clearer picture of what’s happening in the overall marketplace, especially when compared next to last year’s data.
Brokers are coming to a consensus on many issues. They’re very likely to be selling voluntary and appear to be increasing their focus on the line. They believe PPACA is a driver of their increased voluntary sales and that those sales will grow faster in the future than their non-voluntary sales. It would appear the debates about the direction of voluntary sales and their relationship to PPACA-mandated changes are over.
While these changes were predicted, others might be surprising. Despite the aggressive promotion of private exchanges and defined contribution strategies, readers are only occasionally recommending them and, when they do, they’re seldom successful in selling these strategies. While adoption might be just a matter of time, that time is not now.
On the other hand, brokers approach the business in unique ways. They demonstrate a lack of uniformity in the products they sell, the number of carriers they use, and what they expect from those carriers.
Last year we found that the majority of brokers now sell voluntary, at least occasionally, and this continues to be the case. Again this year, just 11 percent of the survey respondents don’t sell voluntary and the majority of those who aren’t selling it, plan to do so in the future.
Most brokers claim the Patient Protection and Affordable Care Act forced them to sell more voluntary. In fact, 60 percent of the brokers surveyed sell more voluntary today, up from 53 percent last year.
A majority of the respondents believe both their voluntary and non-voluntary business revenues will increase in the future, but more so in their voluntary lines. An overwhelming majority (88 percent) expect their voluntary revenues to increase, compared to just 64 percent for their non-voluntary lines.
See also: Why voluntary still matters
Slow-moving on private exchanges
Our survey results suggest brokers aren’t rushing their clients to move to private exchanges or defined contribution plans. Large-case brokers are more likely to recommend private exchanges than are smaller-case brokers; however, the majority of brokers, regardless of their typical case size, suggest this less than 5 percent of the time. In the large-case group, 79 percent of brokers recommend private exchanges to clients between 0 percent and 25 percent of the time.
The success with which private exchanges are actually implemented in a case also is low, even among the large-case brokers. According to the data, 79 percent of large-case brokers recommend a private exchange less than 25 percent of the time and 64 percent are successful less than 25 percent of the time.
When private exchanges are recommended, defined contribution often isn’t included. In fact, a majority said defined contribution is included less than 25 percent of the time. Among large-case brokers, defined contribution seems to be more prevalent, but 61 percent still said they include defined contribution less than 25 percent of the time.
Products and carriers
The voluntary products sold most often by brokers were very similar to what we saw last year. However, the percentage naming accident coverage as one of their top three voluntary products increased significantly from 36 percent to 47 percent. Critical illness also increased somewhat this year.
More brokers also are selling “non-traditional” voluntary benefits. Wellness programs were again the most commonly sold non-traditional voluntary product, but the percentage actually decreased some from the 2013 survey. More brokers also are selling discount health plans, legal plans, and ID theft coverage this year compared to the previous year.
See also: Top 5 selling voluntary products
Most brokers use multiple carriers for their voluntary business over the course of a year. However, a majority use just two or three different carriers. Only 38 percent use four or more carriers.
When asked why they use a particular carrier most often, “quality products” topped the list. Brokers also consider the relationship with the carrier’s staff, especially the field reps, as an important reason for using their top carrier.
When it comes to enrollment, the most common methods were a combination of group and one-on-one meetings or voluntary or mandatory one-on-one meetings only. Somewhat surprisingly, there was no change in the use of the Internet or call centers this year compared to last year.
For those brokers who use enrollers, there was an increase in the percentage using carrier enrollers and/or enrollment companies to handle their cases. On-staff and carrier enrollers continue to be the most common source of enrollers.
Among those who use an enrollment company or carrier enrollers, 49 percent are “extremely” or “very” satisfied with their performance, up slightly from 46 percent in the last survey. Another 42 percent are “satisfied” and only 9 percent are “dissatisfied,” down from 13 percent last year.
Room for improvement
When asked how the enrollment company or carrier could improve, the most common answer was “be flexible about their process.” This item jumped up significantly compared to last year. This was followed by: “provide me better service” and “improve their enroller quality.”
The majority (64 percent) of the brokers surveyed said they typically use a carrier’s enrollment platform to handle their enrollments while 16 percent do not use any technology platform. Fourteen percent use a third-party platform and 6 percent a proprietary platform they (or their agency) created or commissioned.
The survey also looked at what brokers think they need in order to be more successful in selling voluntary products.
“More time to sell voluntary” was the No. 1 answer cited followed by “more knowledge about carriers and their offerings.”
The fog is starting to lift and the picture is becoming clearer as those brokers who haven’t been involved with voluntary begin to enter the business, learn the basics and look forward to stronger sales and improving results.
But brokers also appear to be a diverse group, crafting their unique approaches and processes in their march toward voluntary success.