The Ancillary Portfolio

How Attract & Retain Strategy Can Open the Benefits Conversation

11 Facts to motivate your clients about worksite ancillary coverages

by Brian Vestergaard

Mr. Vestergaard  is Vice President of Product & Marketing for LifeSecure Insurance Company, based in Brighton, Mich. LifeSecure is dedicated to helping you see insurance differently and delivering an exceptional insurance experience. The company offers accident, critical illness, hospital recovery, and long term care insurance products. LifeSecure is licensed in 47 states and the District of Columbia. Additional information is available at yourLifeSecure.com.

Thanks to an historically low unemployment rate, employers are eyeing the latest and greatest in employee benefits to attract and retain top talent. They want benefits packages that are just as diverse as today’s workforce in order to appeal to a wide range of employees. Things like pet insurance, student loan assistance, identity theft protection and lifestyle benefits are just a few of the latest trends to take hold at the worksite.

While employers may be looking for the next big thing in non-traditional benefits, don’t leave ancillary health products behind. They need to be a part of the worksite benefits conversation. Let these 11 facts tell your clients the story of how ancillary health benefits can provide better health and financial outcomes for their employees and support their own business goals.

The average medical deductible for single coverage has more than doubled since 2008 to $1,5731

It’s no secret that high deductible health plans have grown in popularity among employers as a way to control benefit costs, and among employees as a way to lower monthly premiums. However, this trend also has employees and families sharing more of the health care costs burden when care is needed. In addition to deductibles doubling over the last 10 years, 26 percent of workers now have a deductible of at least $2,000, according to the Kaiser Family Foundation.
Nearly 7 in 10 people are worried about being able to afford an unexpected medical bill – more than any other household expense.2

Unexpected medical bills are a top-of-mind concern for many households, especially considering that 40 percent of people don’t have the cash to pay for an emergency expense of $4003. Ancillary health products have quickly become a staple in today’s market because they’re reliable solutions that help families address these concerns. When paired with a medical plan, they can extend protection to offset the financial impact of an unexpected health event and provide extra support for anything that’s needed during recovery.

Employers lose an average of $1,685 per employee each year in productivity costs from missed work due to poor health care and preventable chronic conditions4

That’s a significant cost per employee, which roughly adds up to a $226 billion annual price tag for all businesses. In addition to ensuring employees can get the care they need, a strong employee benefits package can also preserve productivity by helping to curb financial stresses. By closing gaps in coverage with ancillary health products, employers can protect the well-being of their employees as well as their bottom line.

8 in 10 employers say employee retention is their top objective when building a strong benefits package5

Retention and recruitment have long been a top priority for employers, but its importance is heightened in today’s ultra-competitive job market. In fact, more than 40 percent of workers would consider leaving their current jobs because of an inadequate benefits package, according to a recent report by Randstand U.S. It’s one of the many reasons voluntary benefits are now seen as essential, rather than a nice “add-on” feature.

More than two-thirds of employers believe voluntary benefits will be a very or more important component of their employee value proposition in three to five years6

That’s nearly twice as many employers who currently feel this way. Why the shifting mindset? Because voluntary benefits are what workers want. Nearly 90 percent of employees say that a benefits package is extremely or very important in deciding to accept or reject a job7. And in addition to wanting a variety of benefits to choose from, almost all employees want their benefits to have a meaningful impact on their quality of life. But which benefits are attracting more attention from employers and employees?

Worksite accident sales grew by 12 percent in 2017 with total sales of $1.1 billion8

When it comes to strengthening a worksite benefit package, accident insurance is a must-have, thanks to its flexibility. Accident products can easily meet financial and lifestyle needs of today’s diverse workforce – from active millennials and cost-conscious families looking for more complete coverage to older workers preparing for retirement. With benefit payouts that can be used to offset deductibles or other costs not covered by major medical insurance, it’s easy to see why accident insurance is consistently a top-performing worksite benefit that many experts predict will continue to soar in popularity.
More than 70 percent of employers are expected to offer critical illness insurance by 2021, up from 43 percent.9

high deductible health plans have ...employees and families sharing more of the health care costs burden when care is needed. In addition to deductibles doubling over the last 10 years, 26 percent of workers now have a deductible of at least $2,000

Critical illness insurance is another flexible product that’s becoming a bigger piece of the worksite benefits puzzle. An unexpected illness often raises a number of challenges that extend beyond health and recovery, from out-of-pocket costs not covered by health insurance to time off work and lost income. As more employers recognize these concerns, they’re turning to critical illness coverage as an important solution that can help employees better protect their family and finances during an unexpected illness. Plus critical illness insurance has evolved to be more consumer friendly. In addition to expanding coverage to illnesses like skin cancer, organ failure and other coronary conditions, it can also provide multiple benefit payouts for a recurring illness or new conditions.

The number of employers offering hospital indemnity insurance could double by 202110

Hospital indemnity coverage is resonating with more employers and employees as carriers launch new or redesigned products. Just about any amount of hospital care is enough to place unexpected stress on an average family’s finances. That’s why today’s hospital indemnity products are more versatile and offer benefits for multiple stages of a medical event. Hospital indemnity insurance goes beyond inpatient hospitalizations by extending benefits to care in an observation unit, emergency room, rehab facility, and even diagnostics and imaging, just to name a few. If you or your clients have passed on hospital indemnity before, now’s the time to take a second look.

More than half of Americans say they need LTC insurance, but only 14 percent have a policy11

Today’s workers are getting a firsthand look at the challenges of providing long-term care and the impact it has on entire families. Some 40 million people in the United States are serving as unpaid family caregivers, including 10 million millennials12. Workers of all ages have witnessed the shortcomings of their parents and grandparents when it comes to LTC planning, and they don’t want to make similar mistakes. Employers are also recognizing the pressing need to address LTC demands, as the number of employers offering LTC insurance (LTCI) is expected to double in the coming years13. While today’s workers are likely a long way from needing LTCI benefits, they’ll see the value in using LTCI to plan for their future financial security and help protect their quality of life.

Five generations are working side by side for the first time14

Today’s workforce includes the Silent Generation, Baby Boomers, Generation X, Millennials and Generation Z. Each group has its own diverse perspectives and needs, which undoubtedly raises complex issues for businesses. But in terms of benefits, it means one size no longer fits all – it’s all about personalization. Workers want to choose from a menu of options and make their own decisions based on which benefits will directly impact their lives.

Only 40 percent of workers feel their employers help them understand their employee health benefits15

Finally, remind your clients that communication is key. It’s not enough to assume that their benefits communication is successful. They’ll need to step up their efforts to make sure their employees get the message. A customized and strategic communication plan will help employees make informed decisions and ensure your client gets the most out of their investment. After all, employees are less likely to enroll in a plan when they don’t understand the value of what’s being offered. Plus carriers can often support your clients in this area by providing educational materials and digital resources that engage employees.

Employers increasingly need your help navigating the benefits market and providing the right mix of products that can be tailored to meet needs of different demographics, lifestyles and financial habits. Moving your clients’ benefit programs forward with ancillary health solutions will help them build a dedicated and diverse workforce while setting you apart as a trusted adviser. ◊

 

 

 

Endnotes
1. Kaiser Family Foundation Employer Health Benefits Survey, 2018.
2. Kaiser Health Tracking Poll – Late Summer 2018: The Election, Pre-Existing Conditions, and Surprises on Medical Bills. Kaiser Family Foundation, 2018.
3. Report on the Economic Well-Being of U.S. Households in 2017, Board of Governors of the Federal Reserve System, 2018.
4. Worker Illness and Injury Costs U.S. Employers $225.8 Billion Annually, CDC Foundation, 2015.
5. 15th Annual U.S. Employee Benefits Trends Study, MetLife, 2017.
6. Emerging Trends: Voluntary Benefits and Services Survey, Willis Towers Watson, 2018.
7. EBRI, Value of Workplace Benefits: Findings from the 2016 Health and Voluntary Workplace Benefits Survey, April 2017.
8. U.S. Voluntary/Worksite Sales Report, Eastbridge Consulting Group, 2018.
9. Emerging Trends: Voluntary Benefits and Services Survey, Willis Towers Watson, 2018.
10. Ibid
11. LIMRA and Life Happens. 2017 Insurance Barometer Study. Windsor, CT.
12. Millennials: The Emerging Generation of Family Caregivers, AARP, 2018.
13. Emerging Trends: Voluntary Benefits and Services Survey, Willis Towers Watson, 2018.
14. Multi-Generational Impacts on the Workplace, Bentley University, 2017.
15. 2018 Benefits and Perks in the Workplace Study, Randstad U.S.