The problem, as it so often does, begins with the name. Voluntary benefits aren’t voluntary; they’re necessary. The so-called supplemental products should always have been part of the core benefit package offered to employees.
They became voluntary accidentally, really. As the cost of health insurance increased, small employers made the tragic mistake of taking money away from life, disability, critical illness and other important benefits to put it all into health insurance. That created a void. Suddenly, employees were receiving health coverage, but nothing else.
Additionally, without online enrollment supported by decision support, the enrollment process is cumbersome and often split into two enrollment meetings, many times months apart. It should have always been one holistic decision. Making each choice separately leads to misaligning your money. When it’s all right in front of you, you can see that choosing the $1,000 deductible over the $500 deductible works for you and gives you an extra $10 a month for your 401(k) (or even twice that with a company match). We have to get to a place where these decisions are happening on the same system and not living in silos, so that people can fit the pieces together and create the best possible plan for themselves.
There seems to be a movement by some innovative carriers to simplify and even bundle their products. In fact, it’s almost back-to-the-future: A new breed of accident policies are returning the past, when an accident policy simply covered the cost of the medical plan deductible.
Why shouldn’t we bundle this accident policy with a critical illness policy, and make it a simpler purchase? Couple that with narrow networks — which get a bad rap, but are important for driving down the cost of healthcare — and an individual or family can save a lot of money. More money that can go into the 401(k) or college fund. Some carriers are unveiling large narrow networks and leading this change.
What modern technology can do is bring everything back together again and present it all in a language and experience that today’s consumer understands. It allows advisors to create this holistic picture in a user-friendly and tailored shopping experience, recommending the most appropriate suite of products for each individual. Maybe it’s accident insurance because you have young kids; maybe it’s critical illness because you’re a little older; or it’s a hospital indemnity plan because you bought the high deductible plan; and so on.
Really, it’s win-win-win.
Brokers win. According to Eastbridge Consulting Group’s 2014 US Voluntary/Worksite Sales Report, the benefits broker segment generated more than $3.9 billion in new sales last year. By adding these products, advisors are keeping up with the evolving industry and increasing their commissions. Where recently there was a perceived threat to the profession, agile advisors are adjusting and thriving.
Employers win. As we’ve seen over the last few years, offering competitive benefits packages has become a critical piece in recruiting and retaining talent. Employees demand comprehensive benefits that move way beyond health to include things like childcare, wearable wellness technology, and identity protection. The company that can offer a comprehensive benefits package — and an intuitive way for employees to use it — will build a loyal and healthy workforce.
Most of all, consumers win. Giving employees year-round access to their benefits, with the support of an expert advisor, means they’ll understand them. If they understand them, they’ll use them. And using them will make them healthier and happier. More tangibly, it can help them save money or make money, with a larger contribution to their 401(k) and greater participation in a financial wellness program, if their benefits package includes one.
The seismic changes in how benefits are provided and administered is an opportunity to give people better understanding and control around decisions that can have a profound impact on their lives. The choice for those of us who work in this industry to be part of that solution should be anything but voluntary. It should be our mission.