The “Aflac WorkForces Report 2016″ is the sixth annual study examining benefits trends and issues among employers and employees. The results consistently help to support the efforts of agents and brokers.
Here are five findings that can help drive your business.
1. Your greatest competition may simply be a lack of awareness.
Of companies not using a broker or consultant, 56 percent say it’s because their company works directly with their carriers or they have the benefits planning expertise in-house.
Having trouble getting your foot in the door? The reason may be less about cost and more because your prospective client isn’t aware of the value you can bring. Although working directly with a carrier or planning in-house is a viable solution, many companies are improving their business with the help of a benefits advisor. The study found 7 in 10 employers use a broker or benefits consultant to determine their benefits options. Of those:
- 80 percent say their companies’ benefits packages enable them to reduce employee turnover, which is a greater proportion than those who don’t use a broker or benefits advisor (66 percent).
- 75 percent say the benefits their companies offer increase worker productivity, compared to 65 percent of those who don’t use a broker or benefits advisor.
2. It’s time to introduce your clients to private exchanges.
Sixteen (16) percent of employers project that they’ll move their employee health insurance benefits to a private exchange in 2016 — up from 6 percent in 2014 and 2015.
Online marketplaces such as Everwell, powered by Aflac, can help clients with the heavy lifting of benefits administration such as coordinating between multiple carriers, which helps businesses to save on administrative costs. Through a private exchange, you can offer your clients multiple benefits options and a variety of voluntary products in one streamlined platform. Over the past several years, exchanges have been fine-tuning their services, and enrollment is only expected to increase. The timing couldn’t be better to start making them part of your sales strategy.
3. Voluntary insurance can protect your clients’ bottom lines.
Since offering voluntary accident insurance, 51 percent of employers noticed a decline in their workers’ compensation claims.
If your clients’ workers’ compensation claims are up, they aren’t alone: Over half of employers (58 percent) say their workers’ compensation insurance premiums increased within the last three years. One solution consultants can offer is the addition of voluntary accident insurance. It’s a low-cost option for employers to effectively round out their benefits packages that offers employees cash benefits for accidents on and off the job. What’s more is the substantial decline in workers’ compensation claims that these companies reported: Of those who noticed a decline, 74 percent say it was significant (50 percent to 74 percent) or very significant (75 percent or more).
Voluntary insurance can be offered to cover a variety of health events, including accidents, but also short-term disability, hospital visits, cancer and more. The study found that nearly 4 in 5 employees (79 percent) see a growing need for voluntary insurance today compared to last year, and these products may help with retention. When compared to employees not offered workplace voluntary insurance, employees enrolled in workplace voluntary insurance are more likely to be extremely or very satisfied in their jobs and their benefits packages, as well as extremely or very prepared to pay out-of-pocket costs not covered by major medical/health insurance, related to an unexpected serious illness or injury.
Sixty-eight percent of employers are interested in outsourcing at least one third-party administration service, according to Aflac. (Photo: iStock)
4. Clients may need value-added services and are willing to outsource to get them.
With the Affordable Care Act in place, employers are taking responsibility for reporting, tracking health benefits information, and complying with communication and other requirements of the law. They’re simultaneously keeping pace with the demands of their business, which means for many that there aren’t enough hours in the day to keep everything running smoothly.
In light of this, the Aflac study found that many businesses do not currently outsource benefits administration services, but many are interested in doing so. Employers expressed interest in outsourcing everything from wellness programs and health incentives to health advocacy for employees and IRS benefits reporting.
Click here to learn more about value-added services you can provide customers.
5. Advisors need to be prepared to advise clients about the Cadillac tax. Well over half of companies (60 percent) say they are either somewhat or very concerned about the Cadillac tax.
Even though the excise tax on high-cost health insurance plans is several years away and regulations will likely evolve, employers are already thinking about the Cadillac tax and its potential effect on their benefits. Advisors should be ready to have candid discussions with clients about how to accurately calculate the Cadillac tax, debunk myths about whether voluntary insurance is included (most voluntary products are not because they are defined as HIPAA-excepted benefits) and determine whether their plans might trigger the tax. The anatomy of the Cadillac tax infographic is a straightforward handout that can help ease client concerns.
This article is for informational purposes only and is not intended to be a solicitation.
Form Number: Z160578