NEW KID ON THE BLOCK: ID PROTECTION AS AN EMPLOYEE BENEFIT
Employers and employees embrace protection for ID theft
The news usually arrives as a mystery. Money is missing from your bank account. Your credit card bill shows purchases you don’t remember making. Or the Internal Revenue Service refuses your tax filing, telling you that your refund has already been paid out.
Identity theft stops you in your tracks and can take days—sometimes weeks or months—to resolve. While you struggle to recover who you are and what you own, your job becomes secondary.
What can employers do to help their employees get their identity back and restore their productivity? As identity theft becomes more common, employers are considering including identity protection programs as part of their employee benefit plans.
“Based on our recent employer presentations, I think there is a growing interest in identity protection programs as employee benefits,” says Dennis J. Connor III, VBS, vice president of voluntary benefits for the Tompkins Insurance Agencies in Batavia, New York. The multiline agency, which was featured as Rough Notes’ 2013 Agency of the Year, has more than 30 marketing and customer service offices in New York and Pennsylvania.
“Employers want to send a message to employees that they care about them,” he explains, noting that identity theft is a growing concern.
“When employees experience identity theft episodes, it consumes much of their time as they try to resolve the problems that have been created,” Connor explains. “Their productivity drops significantly. This is a problem for both employees and their employers. Employers realize that their workers need to be protected.”
Connor says employers have been offering identity protection as part of a roster of voluntary benefits—paid by employees—for several years, but now many employers are interested in adding the programs to employer-paid benefits, alongside health benefits, life insurance and long-term disability insurance.
“When employees experience identity theft episodes, it consumes much of their time as they try to resolve the problems that have been created. Their productivity drops significantly. This is a problem for both employees and their employers.”
—Dennis J. Connor III
Vice President of Voluntary Benefits
Tompkins Insurance Agencies, Batavia, N.Y
“In my last two employer presentations, both asked about providing at least a paid basic identity protection, with options to increase coverage. In one instance, the interest was driven by an executive who had experienced identity theft and realized just how difficult it is to restore your identity, records and credit.”
According to the Willis Towers Watson 2015 Voluntary Benefits Survey, more than one-third (35%) of the 319 employers surveyed already offer identity protection to their employees as a voluntary employee-paid benefit.
And it’s well received. The offering ranks ahead of better-known voluntary benefits, including multi-life long-term care insurance (30%), personal travel accident insurance (27%), hospital indemnity insurance (21%) and personal umbrella liability insurance (13%).
Many more employers are considering adding the benefit. The Willis Towers Watson survey says identity protection ranks first among benefits that employers are planning to add or considering adding by 2018. About 12% have already decided to offer the benefit, and an additional 22% are considering doing so.
Identity protection programs usually provide three levels of benefits: monitoring of credit scores and credit accounts; alerts that tell individuals when an identity theft episode has occurred; and restoration—expert help in correcting problems, restoring credit and working with authorities to investigate perpetrators.
Connor says premiums range from under $10 biweekly for a basic plan and to $15 or $16 every other week for extended coverage with higher restoration service limits.
Restoration services are essential, he notes. “For many years, I paid for credit monitoring, and while the service provided me with regular information about my credit score and credit applications, it did not provide the full range of restoration services. It is critical that these programs help individuals correct their problems and repair their credit.”
Connor says employers expect their agents to vet programs and provide a complete range of services that will respond to their employees’ needs. “Agents need to develop relationships with providers who can structure programs that meet these needs.”
Several companies provide monitoring, alert and restoration services, including LifeLock Inc. in Tempe, Arizona; IDT911 in Scottsdale, Arizona; and Generali Global Assistance in Bethesda, Maryland.
Terry Reams, general manager of employee benefit solutions at LifeLock, agrees that identity protection programs are growing rapidly as employee benefits. A 32-year veteran of the employee benefit marketing arena, Reams says LifeLock began partnering with agents and brokers more than five years ago to deliver its products as voluntary benefits.
“Since the passage of the Affordable Care Act (in 2010), agents and brokers have been looking to add voluntary benefit options—particularly risk management products—to supplement other benefits,” he explains. “Since then, we see growing interest in not only offering it as an option, but also as an employer-paid benefit for all employees.”
Reams says identity protection programs are perfect products for property/casualty insurance agents and employee benefit brokers who want opportunities to engage employers on both risk management and employee benefits.
Reams describes LifeLock’s benefits as offering detection services that can monitor and react to improper activities, alerts to trigger response to these activities and restoration services staffed by specialists. The package is subject to a $1 million service guarantee.
The products are available in several combinations that can be delivered as either voluntary or employer-paid benefits, with coverage options available to individuals at discounts of about 15% off retail rates. Reams says LifeLock also provides the strongest administrative platforms and the most experienced specialists.
Matthew Cullina, chief executive officer of IDT911, says his company has experienced significant growth selling identity theft protection and remediation through employee benefit providers, insurance carriers and financial institutions.
“Our biggest markets are insurance carriers that brand our services as components of their own employee benefit products,” he explains. The company also shares its products with benefit delivery platform companies, payroll administrative services and other management services that provide employee benefits to contractees.
According to Cullina, employer interest is strongest among those who have experienced identity theft or whose professional activities have raised their awareness of the need for protection. IDT911 recently implemented a voluntary benefits program for a large hospital, which made the coverage available to its doctors.
“We have seen some of the highest levels of penetration ever in voluntary benefit programs,” he notes. “Usual penetration for voluntary benefits runs about 15%, but we are seeing 30% to 40% penetration when these products are offered.”
He also cites an implementation at a large technology company, which provided employer-paid benefits to employees with financial and contracting authority for the company as an extra measure of cyber security.
Cullina says identity theft and related cyber assault issues are becoming more prevalent, and the risk is increasing as perpetrators continue to gain greater access to personal information via data breaches, ransomware (software infections) and mining social media data.
The company recently introduced a two-stage risk management product that protects employers from large-scale data breaches and employees from identity theft activities.
Premiums range from about $50 to $250 a year for individual services.
Generali Global Assistance, formerly Europ Assistance, is part of the multinational Generali Group and is a pioneer in the assistance industry, protecting the assets of organizations and their customers for more than 50 years. “Our core DNA is helping people in their time of need,” says Paige Schaffer, president and chief operating officer. “Identity theft is both a personal and business productivity problem that is growing rapidly.”
The company has provided identity theft protection and resolution services for many years. It recently launched Iris OnWatch, a comprehensive identity protection platform that minimizes the risk and fallout of identity theft through a single, easy-to-use online dashboard. The company has partnered with Optima Tax Relief to provide Iris OnWatch to Optima customers.
The company also recently unveiled identity protection services suited specifically for the travel industry, which serves as a companion product to travel assistance protection offered to employees who travel extensively on personal or company business.
Schaffer says the company’s “global footprint” and flexibility in structuring employer programs differentiates it from other providers. She says she expects company sales to double by 2018 as awareness of identity protection needs continues to grow.
Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.