It’s that time of year when employees sit in conference rooms, listening to presentations on enrolling in voluntary benefits for the coming year.
Employees have questions. What should I sign up for? How much will it cost? Do I even need this product?
Despite the use of online enrollment platforms and other digital tools, workers need benefits brokers to help them make the best choices, according to studies released from some major players in the benefits world.
Have A Conversation
Eighty percent of people don’t talk about insurance or finances with anyone, MetLife researchers found. So the carrier has launched a campaign encouraging workers to “have meaningful conversations” with people they trust as they make their benefit decisions.
MetLife provides voluntary benefits that cover more than 47 million employees and their families, and has a 15.4 percent share of the total voluntary benefits market in the U.S.
“We invest so much time and money trying to communicate benefits every single year. And we recognize that we’re still not breaking through,” Meredith Ryan-Reid, MetLife senior vice president and head of distribution development and benefits delivery, told InsuranceNewsNet. “So we did a little bit of specific research at the end of last year. And one of the major takeaways is that people don’t think about insurance only when a life event happens. And that’s been the conventional wisdom. We think people have real benefit and those real ‘aha’ moments when they speak with someone they trust, and they just have a conversation.”
MetLife created a website featuring videos of “real people” talking about a wide range of employee benefits from critical illness coverage to legal insurance.
“Our real big theme this year is encouraging people to have conversations with those they know and trust, whether it’s a family member, a friend, a trusted coworker. Because we know that has the good potential to help people think about the important stuff in a real way. And in a more personal way,” Ryan-Reid said.
Workers have an array of voluntary benefits to choose from.
“We’re actually talking about a broader range of benefits — everything from group life to disability to some of the supplemental health products like critical illness or accident insurance,” Ryan-Reid said.
“Those have become increasingly important and more popular because of the high-deductible health plans in the workplace today. People don’t realize the out-of-pocket expense they might incur, so having some of those types of products are increasingly important.”
Ryan-Reid predicted that more employers will offer supplemental health benefits as part of their voluntary benefit offerings. “As more players offer high-deductible health plans, more companies are offering supplemental health benefits to help employees offset those costs,” she said.
Another trend is an increase in benefits such as tuition reimbursement and benefits relating to employee financial wellness.
“Any help that can be provided around financial wellness is really important,” Ryan-Reid said. “Employees are struggling with their financial health.
This creates a distraction at work and results in lost productivity. People have a lot of financial stress.”
Employers also can offer some lesser-known benefits such as legal plans or discounts on auto insurance, Ryan-Reid said.
As the variety of workplace benefits has increased, so has employees’ willingness to spend money on them, she added.
“People are spending more on benefits than they ever have,” she said. “Employers have had to shift more health care costs on to employees. And a lot of that has been driven by the Affordable Care Act and some of the limitations on how much employers can fund their plans, limitations on how rich their plans can be. So there has been a shift for regulatory reasons as well as cost containment, and more of the cost burden is being transferred to employees.”
But although workers have many benefit options available to them, they also are confused about choosing the benefits that are right for their own situations. “Our challenge is to help people cut through the noise and make the right choice,” Ryan-Reid said.
‘That’s A Terrible Thing!’
In 2018, 85 percent of employees see a need for voluntary benefits as opposed to 64 percent in 2015, according to the Aflac annual WorkForces Report. But even though more employees want these benefits, the Aflac research showed the vast majority of them — 93 percent — chose the same benefits year after year, while nearly one out of five workers didn’t do any research at all before selecting their benefits.
“That’s a terrible thing!” said Matthew Owenby, Aflac senior vice president and chief human resources officer, of the lack of homework employees do on benefits. “It’s a trend that’s pretty troubling and the reason why it’s troubling is that people leave a lot on the table.”
Aflac has a 19 percent share of the U.S. voluntary benefits market, according to Eastbridge.
“People simply do not take the time to think about what is coming up from a health care perspective in the next three to six months of their lives, maybe even longer than that,” Owenby said. “What makes that a big problem is we know that more than 50 percent of the workforce is unable to cover unexpected out-of-pocket medical bills.”
“When you see that type of financial constraint, and you see that people aren’t doing research or planning properly, then it’s a problem.”
Why aren’t employees spending time researching their options? “What they generally tell us is it’s confusing, it’s too hard,” Owenby said.
He said brokers and employers need to work together to simplify the benefits message for what he called “the text-message society — 240 characters or less.”
Choosing the right kind of supplemental insurance is even more important as traditional major medical plans become more expensive and workers are subject to higher deductibles and out-of-pocket costs, Owenby said.
“As this continues, I think the interest around voluntary benefits will continue to grow,” he said.
Businesses Want More Help From Brokers
An increasing number of small businesses rely on technology to solve their employees’ workplace benefits needs, a Guardian Life study said. Despite a growing dependence on technology, employers said they believe they are not being contacted enough by their brokers.
That was the word from Gene Lanzoni, an assistant vice president at Guardian Life. Guardian ranked sixth in the U.S. in total voluntary/worksite sales at $292.7 million in 2017, according to LIMRA.
Using technology may give small-business owners a leg up in competing with larger employers in terms of benefits. But 9 in 10 of these small-business owners still are dependent on a benefits broker, Lanzoni said.
“(Small-business owners) are very dependent on a broker to help them with benefits design, planning, looking at different carrier options,” he said. “But the definition of broker is what’s changing.”
The Guardian study revealed one in three small-business owners who work with a broker for their company benefits work with more of a nontraditional broker such as a technology company or a payroll company.
“More small businesses are gravitating toward technology and they’re not being consulted with and spoken to about their benefits technology strategy by the more traditional benefits brokers,” Lanzoni said.
"So I think the message for many benefits brokers is they really need to develop a benefits strategy of their own. They need to have a position on the use of benefits technology for their clients. They need to have relationships with other carriers who have technology or they have to acquire technology on their own. They have to have a strategy of their own because more and more small business clients they work with will be looking for that.”
How can a traditional benefits broker compete with a technology platform?
Begin with having a strategy that includes some form of tech, understanding your clients’ needs and understanding what kind of solution is best for each client, Lanzoni advised.
Guardian released a report earlier this year, “Game Changer And The Digitization Of Employee Benefits,” that took a deep dive into tech solutions for employee benefits. The report, Lanzoni said, contained “a road map to how to assess what the right technology options are, depending on your book of business and kind of clients you work with, what industry are they in, what’s their size, are they already using technology for various aspects of human capital management.
“That can dictate what the right next steps will be regarding bringing in benefits administration and enrollment technology.”
Eighty percent of small-business owners told Guardian researchers they have not spoken with a broker about a benefits technology strategy, while only 18 percent said they had, Lanzoni said.
He added, “That’s too small, that’s too low given where the market’s going, and the important role technology has and will continue to play.”