How to drive client satisfaction… and your revenue stream
By Steve VermetteMr. Vermette is vice president of growth market solutions at Colonial Life & Accident Insurance Company. Contact him at firstname.lastname@example.org or 803-678-6244.
What’s more important to you: making your clients happy, or making money?
Do you really have to choose between them?
The answer is no, at least when it comes to benefits enrollments. With the right tools, tactics and resources in hand, you can steer your way to both higher client satisfaction and a bigger bottom line.
If you’ve been in this business long at all, you’re probably finding employee benefits enrollments have never been more complicated. What used to be a once-a-year event led by a company’s human resources department now may also involve insurance carriers, brokers, enrollment firms, benefits administration system providers and the company’s IT department.
At the same time, enrollments have never been more important. With today’s ever-increasing health costs and the growing financial fragility of many of America’s workers, helping employees understand and participate in the right benefits programs can have a tremendous financial impact: for them, their employers – and you.
You can drive success for both your clients and your business by better understanding the key components of an effective enrollment and the optimal long-term economic model for partnering with benefits providers and enrollers.
We’ve found successful enrollment strategies must cover four key areas:
- Tools – Finding the right technology to meet your and your clients’ needs, from an entire benefits administration platform to a web interface to a third-party connection.
- Tactics – Determining the most effective enrollment options, including in person, on the phone and online. Successful tactics will vary based on employee demographics, geography, work schedules, company culture and other factors.
- Comprehension – Driving the strongest possible participation in the enrollment by ensuring employees understand their benefits offerings and their individual needs.
- Ongoing fulfillment – Ensuring the enrollment strategy perpetuates beyond just the first year.
Unlike today’s highly sophisticated, computerized car engines, this doesn’t have to be as complicated as it might look. Let’s pop the hood and take a look.
Start with a strong benefits communication strategy
When it comes to benefits communication, there’s often a significant disconnect between your clients and their employees.
Less than 40 percent of employers have a formal benefits communication plan, yet the vast majority — 90 percent — think their approach is effective, according to LIMRA’s 2016 “Help Employers Connect the Dots” report. But their workers disagree: Only a third of employees say they understand their benefits very well, according to the U.S. Worker Benefits
U.S. Worker Survey
Strong benefits communication does more than help employees make better benefits choices — it also helps your clients keep their top talent by increasing job satisfaction, employee engagement and workplace loyalty. The U.S. Worker survey showed employees who rate their benefits education highly are also likely (76 percent) to rate their workplaces as very good or excellent.
A strong benefits communication strategy focuses on these three points:
- Start at least three weeks before the enrollment. Give employees and their family members adequate time to review communication materials so they’re prepared for enrollment.
- Use at least three communication methods. Multiple tools, including emails, websites, printed materials, videos and group meetings help employees access information in the way they prefer at the time most convenient for them.
- Customize for a more personal approach. Benefits aren’t one-size-fits-all, and communication shouldn’t be, either. Help employees understand their needs at different life stages and the options available to meet them so they can make wise choices.
OK, I hear you saying, “Wait, this is supposed to be helping me increase my income — won’t paying for benefits communication support cut into my bottom line?” Not necessarily. Leading benefits providers offer communication materials and tools as part of their services, at no additional cost. Some will customize printed materials and websites for each customer. If your benefits provider partners don’t offer this kind of support, look for one that does.
It’s that important, and here’s another reason: Employers who skip or skimp on benefits communication may actually be adding to their benefits costs, according to LIMRA’s study. That’s because employers often aren’t making the connection between effective communication, good participation and overall benefits costs. Only one in four employers that offer voluntary benefits think high participation rates are important, and only one in 10 consider increasing participation rates to be a high priority for their benefits communication approach.
“Many employers don’t realize lower participation rates ultimately weaken their ability to control overall benefit costs, resulting in higher long-term benefit expenses,” points out Yuliya Babushkina, assistant research director at LIMRA.
Combine high-tech and high-touch to drive the greatest participation.
You can offer your clients a wide variety of enrollment methods, including group meetings, websites with videos and calculators, email and printed literature. But just as with benefits communication, there’s a significant discrepancy between what employers and their workers prefer.
Half of employers in Eastbridge Consulting Company’s recent “MarketVisionTM – The Employer Viewpoint” report (July 2016) said they prefer self-directed, online enrollment via a website. Only 25 percent prefer the enroller to help complete enrollment forms during a one-to-one meeting. Yet our own surveys of employees who have participated in individual benefits counseling sessions over the past seven years show nearly unanimous support for one-to-one enrollments: 98 percent say it’s important and 97 percent say they understand their benefits better.
And research shows individual meetings work. Eastbridge’s 2016 “Enrollment Practices for Voluntary Carriers” report shows individual meetings continue to generate the highest participation levels, averaging 35 percent. That compares to 29 percent for group meetings and 26 percent for web-based enrollments.
The “Employer Viewpoint” report also shows employers want integrated enrollments. More than 60 percent of employers want all benefits — core, voluntary, from different carriers — enrolled on a single platform. They also prefer to use their own benefits administration platform rather than a separate enrollment system.
Again, this isn’t rocket science if you’ve got the right partners in place. Leading benefits providers will offer the ability to connect with either your or your clients’ platforms for a seamlessly integrated enrollment.
Look under the hood to maximize your long-term compensation
So far we’ve got an effective communication strategy paired with the right enrollment tools. That’s driving stronger participation, leading to higher revenue for you in product commissions from benefits carriers. But commissions are only part of the equation: You also need to consider what the enrollment costs you to maximize your bottom line.
After evaluating the right product and service fit for a case, take a close look at the enrollment strategy and costs. You may provide enrollment services, contract with an enrollment firm or partner with a carrier that provides enrollment services. These options all play an important role in what commissions end up staying in your pocket.
If you contract with an enrollment company, you can expect to pay 70 percent to 80 percent of carrier commissions in fees to that company. Typical commissions from voluntary insurance carriers on individual products range from 20 percent to 30 percent after removing enrollment costs from the equation. These commission rates are usually provided at a gross rate before enrollment costs because enrollment strategies vary from case to case.
If you supply your own enrollers, you face per diem costs, regardless of participation. And this economic model worsens in subsequent years after the initial enrollment. The number of new employees to enroll and new products to offer existing clients dwindles, yet costs for per diem enrollers, technology platforms, printed materials and other resources are steady.
One solution is to partner with a full-service benefits provider that offers enrollment support as part of its services, so you should none of the enrollment expense. Here’s an example based on typical commission rates (see chart above):
You don’t have to risk blowing a gasket to rev up your enrollment success. Instead, remember to focus on:
- Educating your clients about the most effective enrollment methods.
- Enabling comprehensive, customized benefits communication at no additional cost to you or your clients.
- Increasing employee satisfaction, stronger participation in the benefits program and controlling benefits costs through a comprehensive, tailored communication strategy.
- Seamlessly connecting different enrollment systems and benefits administration platforms for a completely integrated enrollment.
- Using the tools available to you to maximize your income potential for initial and future enrollments.
The real bottom line is you have a tremendous opportunity to bring stronger value to your clients by educating them on effective enrollment strategies and partnering with benefits providers that can bring to the table the services and support needed for an integrated approach. ◊
For more information visit www.coloniallife.com or connect with the company at www.facebook.com/coloniallifebenefits, www.twitter.com/coloniallife and www.linkedin.com/company/colonial-life. Colonial Life is a registered trademark and marketing brand of Colonial Life & Accident Insurance Company.