Advising Today's Business

Small Business Is A Big Deal

How to succeed in the small employer market with solutions it needs

by John Stibal

Mr. Stibal is senior vice president of sales and client management at Unum. Contact him at

If you want your benefits business to get bigger, maybe you should be thinking smaller — as in small businesses. The fact is nearly all — 99.7% — of U.S. firms with paid employees are small businesses. There are more than 30 million of these potential clients in the U.S. Together, they employ nearly 60 million workers and are responsible for two-thirds of the country’s job growth.

But while small business may be a healthy part of our economy, its workforce lacks adequate health insurance protection. Just more than half of people working at firms with fewer than 50 employees have access to a major medical plan through their company. That’s a considerable financial risk for millions of American families.

And there’s an even bigger disparity when it comes to supplemental coverage that could help close that financial gap. Only 28% of these workers have access to short-term disability insurance at work, and 21% are offered long-term disability protection. The numbers are a bit better for prescription drug coverage — 50% — but very low for vision at 14%, dental at 24% and life insurance at 36%.

Needed: A Strong Safety Net

This comes at a time when many of America’s workers lack a strong financial safety net. The Federal Reserve reports nearly 40% of families don’t have cash or savings on hand for an unexpected expense of just $400. One-fifth of adults had major, unexpected medical bills to pay in the past year, and a fourth of adults skipped necessary medical care in 2018 because they couldn’t afford it.

Clearly, there’s a huge opportunity in this critical and growing market for brokers who understand the needs of small businesses and can offer effective benefits solutions. Here are three ways you can succeed in the small employer market by offering the solutions and capabilities they want most.

Give Them A Better Benefits Package

More than half of small businesses haven’t added a new benefit to their package in two to five years, according to LIMRA’s 2018 Trends in Small Businesses report. Yet an equal number of small employers say it’s more important today to offer insurance benefits, to stay competitive in the low-unemployment job market.

Many small employers don’t believe they have enough employees to qualify for benefits. You can change this misperception by offering them group or voluntary products with guaranteed or simplified underwriting that ensure most employees will qualify for coverage.

In addition, only 31% of small employers in LIMRA’s study said they have an outside advisor to counsel them on insurance benefits. Even on the “larger” end of the small business spectrum — firms with 50-99 workers — more than a third of employers don’t have this kind of service and support. That means the majority of small firms make great sales prospects.

Show Them How To Save Money

The cost of health insurance has been the number one concern of small employers for more than 30 years, according to the National Federation of Independent Business. As the cost of health care and providing employee benefits continues to rise, small employers feel the pain more acutely than their larger counterparts. Because small businesses don’t benefit from the pooled risk bigger companies enjoy, they can’t get the same pricing for their health plans.

The cost of health insurance has been the number one concern of small employers for more than 30 years, but because small businesses don’t benefit from the pooled risk bigger companies enjoy, they can’t get the same pricing for their health plans...

One way you can help small employers save money is to help them redesign their health plans with higher deductibles complemented by supplemental insurance that helps reduce employees’ financial exposure. Many small employers either aren’t aware of or don’t understand the advantages of supplemental coverages such as disability, critical illness, accident and hospitalization insurance. These types of coverage can be offered as cost-effective group plans or employee-paid voluntary plans. In fact, employers often find their premium savings on higher-deductible health plans allows them to pay for some of all of the cost of selected supplemental coverage for their workers.

Make Administration Fast & Easy

Small companies don’t have the luxury of dedicated human resource managers and staff. Many small businesses are family-owned and -operated, with employers wearing many hats. They don’t have the expertise or time to continually shop around for a benefits package that best meets their needs. With limited HR resources, adding or changing benefits can seem like a complex and overwhelming administrative burden.

A recent Unum survey of benefits brokers showed they place highest value on ease, speed and expertise. It’s no surprise those values align with the six drivers of customer satisfaction we’ve identified: ease, speed, accuracy, anticipating needs, transparency and caring. Your needs and those of your clients have evolved significantly in recent years, creating a demand for streamlined, effective solutions to solve today’s more complex benefits problems.

A good onboarding experience sets up the foundation for stronger benefits administration and greater customer satisfaction. Smart use of technology is helping some providers make dramatic improvements to onboarding. For example, Unum’s digital onboarding experience for small employers has resulted in a 45% improvement in customer satisfaction scores over the past 2 years. Digital onboarding includes the ability to e-sign legal documents, access to a website for uploading an employee census and other information, registration information for i-services, and support by phone, email or online chat.

Initial onboarding is followed by access to the MyUnum benefits administration platform with digital self-serve tools for ongoing implementation. Employers use an online, paperless system to update employee information, find plan information, review and pay bills, see employees’ claim status and get answers to questions.

Unum’s increased focus on small employers also includes the addition of small business consultants dedicated to helping brokers navigate the under-50 market. These specialized resources are based in local markets, a distribution model that allows them to help solve the speed, accessibility and support concerns you and your clients deal with every day.

Win Big With Small Business

Small businesses offer a tremendous untapped opportunity for your business. With your help, small employers can offer affordable, comprehensive benefits packages and take advantage of easy-to-use administration systems to compete in their — or any — marketplace.