How voluntary benefits can solve problems in the era of healthcare reform

With the passage of the ACA came increased financial burdens on employers, unions and other insurance plan sponsors – but there are ways agents can help ease them.

Insurance News


Healthcare reform set in motion many new conditions for insurers, brokers, plan sponsors and members. With the passage of the Patient Protection and Affordable Care Act (“Affordable Care Act”) came increased financial burdens on employers, unions and other insurance plan sponsors. It also prompted greater financial responsibility and accountability in employees with increases in employee deductibles and out-of-pocket expenses. One way plan sponsors are encouraging employees to take better control of their financial well-being is through voluntary benefits.
Over the past few years, there has been a steady increase in the sales of these benefits which include –choices in life insurance, short-term and long-term disability, vision, dental, hearing, accident and critical illness. LIMRA’s U.S. Worksite Sales survey found that sales of worksite/voluntary benefits increased 5% from 2013 to 2014. Based on its latest data, Eastbridge Consulting Group projected an increase in voluntary benefit sales at a rate of 3-5% per year. Recognizing the higher demand for these benefits, brokers are increasingly selling them. The 2015 Brokers and Voluntary Benefits – The Evolution Continues Spotlight, jointly developed by Eastbridge and the publication, Benefits Selling,  reported that from 2014 to 2015, the percentage of brokers selling voluntary benefits increased from 19% to 32%. This trend is likely to continue for many reasons.
            “The Win-Win of Voluntary Benefits”
            In addition to the Affordable Care Act’s influence, voluntary benefits deliver value to Taft-Harley Funds and their member, employers, employees, carriers and brokers. Here are the primary value propositions offered by voluntary benefits:
  • Increased Employee Satisfaction, Productivity and Retention - By offering a suite of voluntary benefits, companies with employees across multiple generations – from seniors and Baby Boomers to Millennials – can offer products that are meaningful based on each employee’s specific needs.  This projects an employee-centered organization, helping to retain employees, while keeping them loyal, engaged and more productive. The greater peace of mind employees gain from the financial security voluntary benefits provide, also reduces their stress and potential absenteeism.
  • Cost Containment – Through the offering of voluntary benefits, for which employees assume the full costs, employers can shift some of the health care costs to employees and contain their costs.
  • Stronger Relationships – In addition to driving new revenue streams for them, carriers and brokers are leveraging their voluntary benefits to create stronger customer relationships. These products demonstrate a carrier’s and broker’s greater commitment to meeting changing market needs, and convey a commitment to helping organizations hold the line on increasing benefit costs.
“Maximize Voluntary’s Value Proposition”
To derive greater value from a voluntary benefit offering, carriers and brokers are supporting their customers with effective marketing and educational initiatives. They are: assisting employers with employee educational seminars addressing FAQs, providing easy to understand product information, and conducting convenient worksite enrollment processes. These efforts are not just being initiated during the fourth quarter leading up to the traditional enrollment period, but rather year-round. These measures facilitate greater employee interest and purchase of voluntary benefits, while delivering value for employers and employees alike.

John Thornton is executive vice president of Amalgamated Life Insurance in White Plains, New York.

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