Voluntary picture becomes clear

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.

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

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.

Voluntary efforts

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.

See also: Federal workers ask about voluntary benefits options

Sales predictions 

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.

See also: US employers turn to private exchanges to cut health costs

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.