Amid a changing landscape for health insurance and employee benefits, insurance agents would be reasonable in assuming the fallout of the Affordable Care Act has soured the majority of US employees on the benefits packages offered through their workplace. Yet a new study suggests the opposite – and could precipitate a shift in how agents service group benefits accounts.
Released Monday by Lodestar Advisory Partners and Customer Benefit Analytics, “Who Buys Voluntary Benefits and Why: 2016 Employee Benefits Enrollment Study” reveals that employees are surprisingly positive about their benefits across a range of measures, including the enrollment process itself.
In fact, 78% of the nearly 3,000 respondents said they were extremely, very or moderately satisfied with their employers’ benefit programs. Dissatisfaction levels were negligible, and a slight plurality of respondents said that despite industry headwinds, no change has occurred in the quality of those benefits.
Interestingly, the three most frequently cited reasons for satisfaction with benefits were: the cost to the employee, the quality of the coverages offered and the number of benefit types offered.
The study stands in stark contrast to reports of skyrocketing premiums and increased cost-shifting to the employee in the wake of ACA struggles. Tom Nelson, Lodestar CEO and co-author of the report, suggested the results indicate an understanding among employees of the “difficult challenge” small business owners face in extending benefits coverage.
“Contrary to what may have been expected, many employees appear to give employers credit for doing the best they can in benefits packaging, pricing and enrollment processes,” Nelson said.
What is more interesting, however, is what the study implies about how benefits may be approached and sold in the future.
With satisfaction less dependent on traditional group health insurance, there is more opportunity for agents to begin selling voluntary benefits – that’s everything from life insurance to short-term and long-term disability, vision, dental, hearing accident and critical illness policies. With a wide range of insurance coverage available, employees are getting – if not what they traditionally anticipate from employers – at least a wide-ranging substitute.
Sales of worksite/voluntary benefits increased 5% from 2013 to 2014, and Eastbridge Consulting Group anticipates an increase in sales at a rate of 3% to 5% per year. As a result, the percentage of agents selling voluntary benefits increased from 19% to 32% from 2014 to 2015, according to East Bridge.
These products have been well-met among employees, notes John Thornton, executive vice president of Amalgamated Life Insurance in White Plains, New York.
“By offering a suite of voluntary benefits, companies with employees across multiple generations can offer products that are meaningful based on each employee’s specific needs,” Thornton said. “This projects an employee-centered organization, helping to retain employees, while keeping them loyal, engaged and more productive.”
Voluntary benefits also drives cost containment for employers and stronger relationships with clients as agents demonstrate flexibility in a changing environment, in addition to opening up new revenue streams for themselves.
“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,” Thornton said.
While Customer Benefit Analytics CEO Patrick Toner, who co-authored the Lodestar/CBA study, stressed that there is much do be done in perfecting the sales process of employee benefits, it’s at the very least encouraging to see the direction in which the industry is heading.
“There is still work to do, lots of things employers, brokers and even carriers can do to add more value across the employee benefits landscape, but employers can have confidence in these research findings that they are on the right track,” he said.
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