Change has arrived in the health care insurance marketplace. Employers and employees are looking to their insurance brokers and advisors for guidance; the competition is looking for ways to broaden their client base; carriers are looking to reduce costs by lowering commissions; and brokers are looking for opportunities.
Brokers—look no further than supplemental voluntary insurance programs.
As health care costs continue to rise and employees are asked to shoulder more of the out-of-pocket expenses, voluntary products can help mitigate the burden.
Although companies straining under the weight of growing health insurance costs and uncertainties normally would not contemplate the addition of new benefits, brokers can and should seize the opportunity to integrate voluntary products into an overall benefit strategy for their clients. Offering products that provide relevant answers to an employer's most pressing concerns adds value to the services a broker provides.
Also, by guiding an employer to supplemental voluntary benefits, the broker gives smaller employers a way to compete with the benefit packages of larger companies. The right voluntary benefits create a reliable income stream for the broker while helping the employer control costs and promote employee satisfaction.
Let's Look at the Benefits
Key benefits to the broker who includes voluntary benefits in a benefit package include:
A reliable new revenue stream. One-on-one meetings can result in a 40 percent or greater penetration in a group, representing significant commissions for the broker.
Brokers who want to take advantage of marketplace opportunities can quickly and cost-effectively develop supplemental voluntary benefits programs that let them offer proven solutions that meet the needs of new and existing clients and immediately generate additional revenue.
Stronger relationships with group benefit clients. Enhancing an employer's benefit package at no additional cost to the employer can help build a stronger relationship with the client. It also helps position the broker as a full-benefits provider; clients will not have to look elsewhere when they start thinking about expanding a benefits package.
Quick startup with no additional overhead. Most full-service voluntary carriers have proven enrollment systems and communication processes. Using these services allows the broker to begin offering supplemental voluntary products immediately—there is no learning curve.
In addition, voluntary carrier representatives can assist with the enrollment and communication of core benefits, eliminating the need to hire an enrollment company.
Enhance Your Value to Clients
Supplemental benefits carriers are offering products designed to meet just about any health or financial need, such as short-term disability, cancer insurance, accident insurance, and hospital income plans.
Hospital income plans can reduce out-of-pocket costs with higher deductible health plans. Some hospital income plans offer additional features such as outpatient surgical benefits, emergency room care, and even doctor visits, or can be designed as HSA compatible plans.
Brokers who bring supplemental voluntary products to their clients are offering them an opportunity to better manage their benefit costs. Also, voluntary benefits offered on a pre-tax basis can help lower payroll taxes.
Remember that change—whether positive or negative—creates a need for enhanced communication. Companies often are understandably worried about how to communicate the many benefit changes and options to their employees. Brokers can help employees better understand and value the benefit package and their employer's investment in it by developing presentations of their own or taking advantage of the complimentary communication services offered by many carriers.
Another important note: Voluntary benefits are exempt from the market reforms. Voluntary benefits do not have to be offered through exchanges and will be exempt from pre-existing condition and guaranteed issue requirements. Legislation may be complicating business, but it is also making the broker more important than ever to the client.
There is simply no downside for brokers to suggest supplemental voluntary benefits to their clients. Today more than ever it makes good financial sense for employers to incorporate supplemental voluntary benefits in their overall benefit offerings—and for brokers to offer them.
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