New opportunities: The voluntary advantage for brokers
Employers surveyed as part of the 2013 Aflac WorkForces Report revealed that their interest in voluntary insurance products is on a continued upswing, with an increasing number of companies offering voluntary coverage to their workers.
At the same time, employees are showing increased satisfaction with voluntary products: The Aflac survey found that those who’ve enrolled in voluntary plans are more likely to be knowledgeable, engaged and satisfied with their health insurance benefits; satisfied with their jobs; confident in their employers’ benefits communications; and better prepared to deal with accidents, illnesses or unplanned health events.
With that information in mind, smart brokers are taking it upon themselves to open the voluntary conversation with both new and existing accounts.
Today’s employers are working hard to control the cost of the health insurance benefits they make available to workers, and adding voluntary products is a great way to bulk up their portfolios with no direct effect on their companies’ bottom lines.
While employers want to upgrade their benefits to attract and retain top talent – and trim costs at the same time – employees are examining ways to help guard against the fiscal implosion that can accompany injury or sickness. With implementation of health care reform just around the corner, many are also increasingly aware that voluntary plans not only help fill gaps left by major medical insurance, they also help pay bills that major medical was never intended to cover.
So, what voluntary products are most likely to receive a warm welcome from accounts and employees alike? According to the Aflac survey, life and long-term disability insurance lead the way, with short-term disability and dental coverage right on their heels.
The voluntary landscape
With the implementation of health care reform looming, many brokers are relying on voluntary benefits to fill income gaps caused by the movement of clients to health care exchanges. In fact, nearly half of brokers (46 percent) told Aflac they expect the proportion of voluntary workplace benefits they sell to increase substantially in the coming year. The vast majority of brokers (85 percent) say voluntary products are already part of their portfolios, and 76 percent say voluntary benefits comprise up to 50 percent of their revenues.
Who knows what about benefits?
Although more than half of employers surveyed by Aflac (56 percent) believe they’re quite knowledgeable about the products currently contained in their companies’ benefits portfolios, brokers aren’t so sure. In fact, just 27 percent of brokers concur – and gaps in the two groups’ assessments of employee knowledge are significant too.
When it comes to knowledge about voluntary products, the gaps continue – despite the fact that an increasing number of companies are adding these employee-paid options to their workers’ benefits packages. In fact, 55 percent of employers surveyed by Aflac rate themselves as extremely or very knowledgeable about voluntary worksite benefits, but just 21 percent of brokers agree.
While employers are kinder than brokers in their assessments of employee knowledge, both groups give workers low marks for their understanding of voluntary benefits: 22 percent of employers rate their workers as extremely or very knowledgeable, but brokers put the number at 16 percent.
The door is open for brokers
No matter who is correct in their assessments – employers or brokers – the Aflac study revealed there is room at the table for brokers who are willing to educate current and prospective clients about the value of and need for voluntary insurance in today’s health insurance marketplace.
Smart brokers are taking it upon themselves to open the voluntary conversation with both new and existing accounts.
As the health care landscape continues to shift, voluntary benefits will become more critical for workers. More than half (60 percent) told Aflac they would be interested in purchasing voluntary benefits if those benefits were made available by their employers. One driving factor is financial unpreparedness: The Aflac WorkForces report – conducted annually for the past three years – consistently found that many workers are unprotected by savings or financial plans. In fact, 46 percent say they have less than $1,000 in savings to pay for an unexpected health event and more than half (56 percent) don’t have a financial plan in place.
These statistics should motivate brokers to engage in frank discussions with employers – and with employees during open enrollment – about how voluntary products can help provide a safety net that protects workers from unexpected debt and may even prevent bankruptcy. According to a national study, medical expenses are a contributing factor in more than 62 percent of individual bankruptcy filings, and the number of bankruptcy filings listing medical debt as a significant factor is increasing.1 What’s more, the study found that most of these debtors are well-educated, own homes and have middle-class occupations.
Voluntary benefits: A win-win-win scenario
By engaging in the voluntary conversation, today’s brokers set up a win-win-win situation: Receptive employers, who are looking for ways to add value to their benefits portfolios, can do so with no direct effect on their companies’ bottom lines. Employees can use voluntary policies to build safety nets that protect them from out-of-pocket costs and unexpected debt. Finally, brokers themselves can position themselves as advisers and advocates for accounts and workers alike.
About the study
The 2013 Aflac WorkForces Report is the 3rd annual Aflac employee benefits study examining benefit trends and attitudes. The study, conducted by Research Now between January 4 and January 24, 2013, captured responses from 1,884 benefits decision-makers, 5,299 employees and more than 300 brokers from throughout the United States. “The Voluntary Advantage for Brokers” is one of three key broker-related themes from the 2013 study. To learn more about the Aflac WorkForces Report and to read “The Good News for Brokers” and “Static on the Line: Broker Disconnects,” visit AflacWorkForcesReport.com.
1 “Medical Bankruptcy in the United States, 2007: Results of a National Study.” American Journal of Medicine, 2009, accessed Aug. 2, 2013 - http://www.pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf