Breaking Into The Worksite Market: A Primer Setting up a voluntary, employee-paid benefits program makes great sense for employers looking for ways to cut costs without reducing benefits. But many producers are still inexperienced with voluntary insurance and the worksite sales process.

For newcomers, the first step is learning how to identify good prospects.

The ideal prospect is an employer that will provide strong support for a voluntary program.

Employer support is important because employers usually need to attract a minimum number of employees to offer the program. When a voluntary plan fails to get the minimum level of participation, the employer may be embarrassed and the employees who were interested may be frustrated by their inability to obtain the coverage.

Obviously, an employer has to give carriers and producers access to the employees. Employers should also be willing to sponsor mandatory enrollment meetings. Generally, the employees who are most likely to buy voluntary products will be the better-paid employees.

Once a producer finds the right prospect for a voluntary benefits program, the next step is to design a plan that will lead to a successful enrollment.

Producers can start by suggesting that the employer consider a shared-cost insurance, such as a group buy-up plan.

An employer that adopts a group buy-up plan provides a basic level of coverage, then gives employees a chance to buy more coverage on their own. Buy-ups are a good choice for companies that want to control costs but still provide their employees with a basic level of insurance protection.

Next, producers should work with the employer to determine the right combination of benefits to offer. After health insurance, dental insurance, disability insurance and life insurance are usually the benefits that employees value most. A typical employer might want to share the cost of some of these benefits and offer the others as voluntary benefits.

The producer and employer can then work with the carrier to design a plan that provides coverage employees want at rates they can afford. If, for instance, the carrier is designing a voluntary long-term disability plan, underwriters can make dramatic changes in rates by tinkering with elements such as the maximum benefit amount, the maximum covered earnings and the income-replacement ratio.

Once the employer and carrier agree on the plan details, the producer and carrier can move on to the enrollment period.

The key to a successful enrollment is effective communication.

Before the official enrollment period, the carrier should offer the employer payroll stuffers, workplace posters and information for the employers internal Web site. The carrier should also supply the text for an endorsement letter that the employer can send to support the voluntary benefits program.

At enrollment time, the carrier should provide more detailed materials for distribution at enrollment meetings. The materials usually include brochures that describe the products offered, worksheets for calculating the amount of coverage employees need, and personalized enrollment forms.

Some producers still prefer paper forms, but many are starting to use carriers electronic enrollment tools. These services can provide daily enrollment reports that measure the progress and success of the enrollment process. Producers who have these reports may be able to save lackluster campaigns by making last-minute changes in their enrollment strategy.

Jeff Smith is assistant vice president of employee benefits marketing at Standard Insurance Company, Portland, Ore. He can be reached at jsmith2@standard.com.

Reproduced from National Underwriter Edition, April 7, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.

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Breaking Into The Worksite Market: A Primer

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