Making Choices

The popularity of voluntary benefit programs continues to grow and grow. HRM gathered four industry insiders – Jim Boyd of YouDecide, Randy Clarkson of Transamerica Worksite Marketing, HM Insurance Group’s Neal Lucchi, and Joseph Pray of Trustmark Voluntary Benefit Solutions – to tell us why, and exactly what the benefits of these programs are.

HRM. Why have voluntary benefits become so popular over recent years?
JP. As healthcare costs continue to rise, so has the demand for voluntary benefits. Many employers are finding it increasingly difficult to provide a comprehensive benefit package. As a result, many employers have been forced to shift some of the costs of healthcare to their employees. Employees see this shift in the form of rising employee contribution of premiums, higher deductibles, co-pays, and out-of-pocket maximums. Additionally, many employers have had to change or eliminate benefits for disability and dental altogether. Employees are frustrated. They are faced with ever widening gaps in coverage and are expected to manage risks that they are not financially prepared to handle. Voluntary benefits are an affordable solution. Employers who offer voluntary benefits help employees shrink economic gaps in coverage, affordably.

Voluntary benefits are popular because they enhance your existing benefits program, with no direct costs to your company. You can offer coverage options that complement your employer-paid benefits. By giving your employees access to a broader array of benefits your company could not otherwise afford, you arm your employees with the tools they need to manage increased risk. Voluntary benefits enable employees to choose coverage that meets their individual needs, and strengthens your overall benefits package.

JB. With rising health care costs, a shift in the cost sharing and funding of many benefit plans from employer to employee paid has occurred. Recognizing this trend, insurers, brokers and outsourcing administrators have successfully developed and marketed a wide array of voluntary benefit products to fill gaps in “core” coverage. Workers are reaching out to their HR departments to request access to voluntary plans. In turn, employers have supported growth of voluntary benefits to complement their corporate work/life program goals.

RC. Health care is one of the hottest topics in America. Having a full time job with benefits has become somewhat of a coveted situation. With health insurance premiums on the rise and all the talk of a national health care program, the need for voluntary benefits to enhance an employer’s benefit package or help cover gaps in an employee’s current coverage becomes even more evident.

NL. There are two primary explanations for the popularity of voluntary benefits. First, there is a need to provide a competitive, desirable employee benefits package that can help recruit and retain top talent – something that remains a key objective for most employers. Secondly, voluntary benefits help employers reach their benefit plan design objectives while simultaneously dealing with the challenges brought on by the ever-changing medical environment. From the employees’ standpoint, it’s all about flexibility and convenience.

HRM. What are the advantages in voluntary benefits for both employers and employees?
JB. From the employee side, voluntary benefits provide valuable protection against financial risks that are not addressed fully under employer subsidized “core” benefits. In a well-designed voluntary benefit program, employees have the freedom to pick and choose from an array of employer-sanctioned benefits to best suit their needs.

From the employer side, voluntary benefits can play a key role in attracting and retaining employees, saving the company significant time and money on recruiting, retraining and overtime. Voluntary benefits programs can also be targeted to the specific needs of high-turnover populations such as part-time employees, providing tailored worksite insurance solutions to increase morale and loyalty to the company.

RC. For employers, voluntary benefits provide a way to offer employees options and use these choices in determining their own financial security. In addition, employers can attract better employees with more comprehensive insurance coverage tailored to meet diverse needs. Financial options aside, Transamerica Worksite Marketing offers employers access to several different products, and within those products, customization on the plan side as well as underwriting. In turn, employees then have access to voluntary products to help cover items such as hospital costs, out-of-pocket medical costs, or simply dental and vision costs.

NL. For both, it’s about flexibility. There are so many variables that cause employees’ needs to be different. Lifestyle, stage of life and already having other coverages in place are all examples of factors that make benefit decisions unique to each of us. Employees also value having the opportunity to buy additional benefits at the worksite from carriers that their employers have already screened for suitability. They also want the convenience of payroll deduction. For employers, the flexibility is about providing employees with a competitive plan within very real budget constraints.

JP. With voluntary benefits, your employees can access additional benefits – without additional premium charges for your company.

Employees with access to voluntary benefits, have the freedom to choose benefits that best meet the needs of their individual families. Some families may benefit most from permanent life insurance; others may prefer disability or dental coverage. With voluntary benefits, employees get to choose. And because voluntary benefits are offered during enrollment periods, premiums are lower and underwriting is minimal compared to the individual marketplace. Typically, voluntary benefits are either simplified issue – meaning a few underwriting questions, or guaranteed issue – with no medical questions at all. Voluntary benefits help employees protect their families affordably, and premiums are payroll deducted so there are no bills to watch for, nor checks to mail, nor unintentional loss of coverage.

Improving your benefit package to attract and retain employees without direct cost is only the beginning. You can also take advantage of professional benefit communication firms whose benefit counsellors can effectively communicate your core benefits, educate your employees on 401(k) plans, or communicate other corporate messages, at no cost, by adding a voluntary benefit. Take advantage of voluntary benefits as an ideal solution for your company.

HRM. Are voluntary benefit schemes a good fit for all types of employers or are they particularly suitable for companies of a certain size or business type?
RC. We believe that voluntary benefits play an integral part in any organization from small employers to large employers across all industry types. In our effort to make our benefits attractive, coverage is available to employees, their spouses, and eligible dependents. Several of our products have guaranteed issue availability, which means no questions are asked at the time of enrolment. If employees see coverage that would help offer peace-of-mind or offer some financial security in the case of a critical illness or accident, they simply need to apply.

NL. Historically, voluntary benefits were viewed as being niche products. That view is dated. The previously noted advantages of including voluntary products in the benefits package are important regardless of size of employer or employee demographics. What is important is working with brokers and carriers who have the ability design the voluntary program around the distinct needs of each group. Everything from the enrollment approach to the products offered requires understanding the objectives of the plan sponsor and the ability to flex the model and tailor a program to meet those needs.

JP. Although voluntary benefits can be beneficial to the wide majority of employers, the specific voluntary benefit needs within each employer group can vary significantly. Consequently, voluntary benefit carriers differ both in the products and services they offer, as wells as core competencies. Differing value propositions amongst carriers align them with certain types of employer groups better than others.

Specializing in voluntary benefits including Life, Critical Illness, Disability, Dental and Accident, Trustmark’s benefits and value proposition are designed for groups that have certain case characteristics. Our benefits work best with larger companies having low to moderate employee turnover. Industries such as hospitals and healthcare, manufacturing, public employers and state governments, service industries, warehousing and local distribution, and wholesale trade are some of our target industries. We have no upper limit on group size, just a lower limit. Trustmark’s products are designed for companies with 100 or more employees.

On the flip side, other carriers specialize in small groups or high turnover industries. As you learn more about voluntary benefits, it is important to evaluate which benefits are most beneficial for your employees. And once you make the decision to move forward, choosing the right carrier is imperative.

JB. Voluntary benefits should play an important role in organizations of all types and sizes. What the benefit needs of your different populations are, what types of voluntary benefit plans complement or fill gaps in your subsidized “core” programs, what role is your organization willing to play in plan administration and which outsourcing firms best complement this role, might be key in designing a voluntary benefits programs tailored to your organization. Each employer will have different answers to these questions, and thus voluntary benefits strategies will vary.

HRM. Do you think voluntary benefits will ever supplant conventional provisions or will they remain a complementary component?
NL. They won’t replace them overnight, but the trend toward a more defined contribution approach is clear. The implications for our industry are equally clear. We must get better at helping employees work through the challenges of allocating disposable income to the products that best fit their needs and objectives. We must continue to help plan sponsors eliminate administrative obstacles to including employee-paid products in the portfolio.

JP. As we read the news, it is becoming less and less clear as to how conventional benefits will look in the future. What is clear is that voluntary benefits are growing in popularity, and that growth is expected to continue for many years to come. Even if national healthcare were realized, gaps in coverage are here to stay. Carriers will continue to design benefits to fill those gaps, and employers will continue to compete for talent. As the benefits landscape twists and turns, we see employers continuing to play a greater role in helping their employees and their families meet their financial needs. The employers and carriers nimble enough to adapt early and often will have the most success. Moving forward, companies with creative, innovative, affordable solutions for employee health and financial well being, including and in addition to voluntary benefits, will triumph, modelling the way for others to follow.

JB. We see a clear trend in the health and welfare marketplace of benefits transitioning from fixed employer managed solutions to more employee-directed, “choice” programs. Technology and outsourcing solutions already exist to achieve this model, and much of the administration of these programs could be outsourced by the company. The greatest current hurdle is the availability of voluntary products with guaranteed issue and favorable underwriting provisions; insurers are already beginning to address this deficiency in many products.

RC. The one-size fits all approach does not go very far when you are talking about insurance coverage. As employers continue to cost-shift premiums to employees and even eliminate staple employer-paid benefits, voluntary benefits will continue to grow. Plus, as corporations become more diverse, it would only stand to reason employees will require more choice and control over their benefit package. Voluntary benefits then not only offer employees choices, but in some instances, offer coverage the employee may not have.

HRM. Can you tell us more about the particular services and solutions you offer?
JP. Trustmark Voluntary Benefit Solutions is a flexible, service-driven organization of people committed to providing quality voluntary benefits including Life, Critical Illness, Disability, Dental and Accident to employees and their families nationwide. Professional enrollment, case implementation, consolidated billing and our Service Report Card are cornerstones of our success. We value innovation, offering Universal Life with Living Benefits for LTC that are the most extensive in the industry. As the first voluntary carrier to offer Critical Illness, we continue to innovate by adding HIV benefits for healthcare workers, police, and fire fighters who face the occupational hazard of contracting HIV daily. Our Disability, Dental, and Accident products are extremely flexible, and easily customized.

In addition to product excellence, Trustmark is known for administrative excellence. Trustmark’s billing technology is state-of-the-art, designed to handle the unique requirements of voluntary benefits including payroll-deduction premium processing. Our quarterly Service Report Card demonstrates how we lead the industry in meeting service goals vital to our customers. If there is even a hint of concern a result may be slipping, our management team will enact immediate measures to correct the situation.

With more than 95 years experience in voluntary benefits, Trustmark is extremely well positioned to help you enhance your benefit package.

JB. YouDecide provides a customizable solution for communicating and distributing a broad range of voluntary benefits and discount programs to large employer and association groups. The YouDecide platform is completely flexible to accommodate different insurers and programs based on each company’s needs. We can customize product offerings for different populations within the same company, allowing employers to customize programs which complement, but do not compete with, conventional subsidized benefit offerings. Our voluntary benefit platform is geared towards making program administration as simple as possible for our clients. Our voluntary benefit consultants will help you design a custom program matching your company’s needs with the best vendors and products in the marketplace.

RC. Transamerica Worksite Marketing is rising to the challenge of today’s demanding employee benefits marketplace. We offer a comprehensive portfolio of voluntary group benefits through our underwriting companies including voluntary group life and health products. The life products include Universal and Group Term Life and our supplemental health portfolio features Accident, Cancer, Short-Term Disability, Hospital Indemnity, Out-of-Pocket Medical Expense, Vision and Dental.

NL. HM Insurance Group is focused on providing health risk solutions for employers and employees who have gaps in their current coverages. We have built our business model around being adaptive to the changes taking place in the health environment. In our Voluntary suite, HM offers Limited Benefit Medical and Worksite products, including Critical Illness, Accident, Supplemental Hospital Indemnity, Disability Income and Whole Life. HM works with producers and their client groups to develop customized, flexible plans that best accommodate the needs of that group of employees. HM Insurance Group also provides Stop Loss, HMO Reinsurance and Provider Excess coverages.

Randy Clarkson is President and CMO of Transamerica Worksite Marketing
President. The company offers the complete package of voluntary group products designed to bolster any employer's benefit offering and is a leader in the payroll deduction and voluntary insurance sales marketplace. Transamerica provides a competitive edge for producers, enhanced benefits programs for employers and financial security for millions of working Americans and their families

Jim Boyd
Jim is currently Vice President of Business Strategy at YouDecide. He has over 20 years experience in the employee benefits field as a consultant to large clients on both core and voluntary benefits. Jim is a Certified Employee Benefits Specialist (CEBS) and was named a Power Broker by Risk & Insurance in 2007.

Joseph Pray, CLU is Senior Vice President of Trustmark Voluntary Benefit Solutions, headquartered in Lake Forest, Ill. He first joined Trustmark in 2002 as Vice President of Sales. Pray has more than 25 years of experience in the life and health insurance arena with nearly 20 years focused on voluntary benefits.

Neal Lucchi serves as HM Insurance Group’s Senior Vice President, Voluntary Products. He has more than 20 years of experience in the insurance industry, working diligently to build voluntary product awareness in the marketplace. His educational background includes a bachelor's degree in business administration, a law degree and an M.B.A.