Champions of the Voluntary Sale

Is there a competition where everyone wins?

by Matthew Owenby

As sports fans know, a competition often ends with a winner holding a medal. When it comes to voluntary insurance, however, there are three ultimate winners: benefits advisors as well as the employers and employees they serve.

Of course, the reasons for victory are different for all participants: Employees win because voluntary options can help protect their financial well-being, while employers win because voluntary products help build more stable and productive workforces. As a benefits professional, what about you? That’s easy: Voluntary benefits sales grow their businesses and generate revenue.

Of course, before closing the sale and stepping atop the victory pedestal, there’s work to do. First, meet with accounts to discuss the hows and whys of voluntary insurance – and then work with companies to help them convey the value of the products to their employees.

Open a winning conversation

Any conversation about voluntary insurance begins with establishing need – and the results of the 2017 Aflac WorkForces Report serve as the basis of that conversation.1 The survey revealed that fully 65 percent of the 5,000 employees who participated have less than $1,000 on hand to pay out-of-pocket expenses associated with an unexpected serious illness or accident, while 39 percent have less than $500. It’s fair to say that most Americans are just one serious illness or injury away from a life-changing financial setback.

While many companies believe they’ve done enough for their workers simply by providing access to major medical insurance, the reality isn’t nearly that simple. Major medical insurance doesn’t stretch to cover all costs in the event of a health emergency. There are deductibles and copayments to be met, not to mention the cost of traveling to and from treatment, or the expenses that mount up if an individual is too injured or ill to work.

No matter what happens with respect to major medical coverage as the U.S. reforms its health care system, the need for voluntary insurance will not change. In fact, demand is expected to increase as employers seek low- or no-cost strategies for beefing up their health care offerings – and as employees look for ways to supplement their major medical policies.

Employees: So little confidence, so little time

Benefits enrollment can be a daunting task –so daunting, in fact, that many employees avoid it at all costs. Fully 92 percent choose the same benefits year after year, and many spend little time researching their options. In fact, 83 percent spent less than one hour researching their benefits options during their last enrollments. Perhaps, then, it’s no surprise that 76 percent of employees do not completely understand their overall plans. This includes the price of deductibles and copayments, as well as which providers are in their networks.

The knowledge you hold as an insurance professional can go a long way toward helping employees feel more comfortable and knowledgeable about the benefits available to them. For example, companies need your help:

• Communicating with employees in bite-sized pieces. Two-thirds (67 percent) of employees say reading about their benefits is complicated, long or stressful. Make it easier by advising accounts to communicate in small doses throughout the year, rather than in one large message just prior to open enrollment.
• Ensuring that benefits materials are in plain English. One thing employees say they would change to improve the enrollment experience is the language used: They’d like it to be simpler. Help companies translate their materials into easier-to-understand verbiage and provide definitions of often-used terms.
• Providing easy-to-follow instructions, as well as product comparisons and enrollment assistance. Forty-four percent of employees say they wish enrollments could be more like shopping on Amazon.com, with the ability to easily compare plans. And 20 percent wish they could speak to a professional and purchase their plans in person.
• Provide more information. Nearly one-third (31 percent) of employees say they need more information before their next enrollments, and half say the biggest mystery about their benefits is what’s covered and how much they’re responsible for paying.

The voluntary conversation

There’s no doubt that employees today face financial pressures stemming from health insurance costs. The average family health insurance premium was 3 percent higher in 2016 than in 2015, while wages rose by 2.5 percent and inflation by 1.¹ percent during the same period.^{2, 3} Premium costs in 2017 were expected to rise at the same rate. That means there’s no time like the present for financial and insurance professionals to step in and serve as trusted advisors during benefits open enrollment. After all, with employees devoting an increasingly larger percentage of their incomes to health care costs, the need for benefits information has never been greater.

As a trusted advisor, you can help educate employees about the ins and outs of the benefits made available through their companies and help them make informed choices. It’s no secret that missing out on benefits or not using them to the fullest extent can have unfortunate financial outcomes: According to Aflac’s WorkForces Report, 55 percent of employees estimate they waste up to $750 each year due to mistakes made during open enrollment.

Good news for you: Interest in voluntary insurance is on the upswing

As a benefits professional, you have a direct and definitive effect on open enrollment. What you do – or don’t do – determines whether an employer provides voluntary insurance options to its workforce, as well as how many employees apply and enroll.

The good news? Employers surveyed as part of the 2017 Aflac survey revealed their interest in voluntary insurance is on an upswing, with an increasing number of companies making voluntary policies available to their workers. Their responses were backed up by brokers, who also report an increase in voluntary insurance sales. According to the 2017 BenefitsPro/EastBridge Voluntary Benefits Survey, not only have sales increased, but the majority said voluntary products comprise between 11 and 25 percent of their revenues.⁴

On the employee side, there’s more to celebrate: The Aflac survey, which was directed at employees of all ages, revealed that 81 percent of employees see a growing need for voluntary insurance. Meanwhile, 31 percent of young workers ages 20 to 26 who took part in another Aflac initiative – the First-Time Enrollees Survey – said voluntary insurance options, especially hospital and accident coverage, are the benefits that interest them most.

With open enrollment fast approaching, now is the time to reach out to your accounts to ensure they’re providing employees with the blend of voluntary insurance options they need and want. Ensure they know that that voluntary insurance works hand in hand with major medical insurance to help employees pay costs major medical insurance was never intended to cover. Benefits are paid directly to policyholders unless otherwise assigned, and can be used to help pay housing costs, utility bills, car payments, deductibles and copayments.

Employees depend on their companies to provide access to the right benefits options. Companies, in turn, depend on your knowledge and advice. Make sure you end up a champion by ensuring your accounts and their employees have access to a winning combination of voluntary products this enrollment season. ◊

Endnotes
1 Aflac. “The 2017 Aflac WorkForces Report.” Accessed Oct. 18, 2017. https://www.aflac.com/business/resources/aflac-workforces-report/default.aspx
2 Henry J. Kaiser Foundation. “2016 Employer Health Benefits Survey.” Accessed Oct. 16, 2017. https://www.kff.org/report-section/ehbs-2016-summary-of-findings/
3 PricewaterhouseCoopers. “Medical cost trend.” Accessed Oct. 16, 2017. https://www.pwc.com/us/en/healthindustries/health-research-institute/behind-the-numbers.html
4 Benefits Pro/Eastbridge. “The 2017 Benefits Pro/Eastbridge Voluntary Benefits Survey. Accessed Oct. 18, 2017. http://www.benefitspro.com/2017/05/03/the-2017-benefitspro-eastbridge-voluntary-benefits
5 The 2017 Aflac WorkForces Report First-Time Enrollees Survey, conducted by Research+Data Insights Inc., captured responses from 1,000 workers, ages 20-26, across the United States.