In a still struggling economy, with health care costs rising relentlessly and many employers forced to cut group health benefits, a welcome bright spot is the growing popularity and availability of so-called voluntary benefits. With most or all of the cost paid by employees via payroll deduction, employers can reduce expenses while their employees enjoy the flexibility of selecting insurance options that suit their needs and lifestyle.

A leader in the expanding market for voluntary benefits is Sun Life Financial, Inc., an insurance and financial services organization with operations in the United States, Canada, and numerous overseas locations. With a solid 145-year history and an A+ Best’s rating, Sun Life is among the top 10 employee benefits providers in the United States, and it works with agents and brokers throughout the country to design and implement both employer-paid and voluntary benefits programs.

Leading that effort is Sun Life veteran Drew Niziak, who joined the company in 1993 and now serves as executive vice president and director of group sales. His tenure with the company includes field experience as both a sales representative and a sales manager, so he has a keen appreciation of brokers’ issues and concerns.

The employee benefits market has undergone significant changes since Niziak came into the business 17 years ago. “At that time it was primarily a traditional employer-paid market and benefits were fairly standardized,” he says. “Over the last 10 years we’ve seen a transition toward more voluntary, employee-paid benefits, so we’ve expanded our product offerings in that area.” Today, he says, voluntary benefits constitute about 31% of Sun Life Financial’s total employee benefits volume. “We expect that to grow, and we’re going to grow with it,” he asserts.

Pointing to another trend, Niziak says, “Recently we’ve seen some downsizing in HR departments and more reliance for services on the brokerage community and on carriers. To respond to this trend, we’re providing additional HR-related services to employers and, along with other carriers, we’ve begun to offer service guarantees,” he explains.

The guarantees promise timely response to service requests and accuracy in claims processing, and the guarantees are backed up with the insurer’s commitment to pay a percentage of the employer’s annual premium if the service standards are not met.

Pointing to another key trend in today’s employee benefits market, Niziak comments that Sun Life and its competitors are making significant investments in technology to provide current information and facilitate rapid processing of claims. “Employers are demanding improved service delivery on a sophisticated technology platform,” he declares.

“Not so long ago, we could drop off a notebook full of claim forms and premium remittance instructions at the employer’s office,” he says. “Now all that information has to be available online, and it has to be clear-cut and easy to use. On top of that, we have to make sure that the information is up to date and available in real time to both employers and employees.”

What’s more, Niziak says, employers increasingly are expecting carriers to take responsibility for day-to-day administrative functions once a benefits program is in place. “Employers don’t have the time or the manpower to perform these functions themselves, so the carrier has to become in effect an operating unit of the employer to handle these tasks,” he explains.

In the traditional group health market, the employer selects a plan that will be offered to all eligible employees with few if any options to change coverage. The employee simply makes a yes or no decision about participating in the plan and then decides whether or not to purchase coverage for family members if it is available.

By its very nature, the voluntary benefits market is driven by choice. The employer selects the products that will be offered and determines how much of the premium, if any, it will subsidize. From that point the decisions are in the hands of employees, who make their choices based on their personal and family situation and needs.

As the voluntary benefits market expands, Niziak observes, companies like Sun Life Financial need to be aware of what employees want as well as what employers are willing to offer. “The employer might be interested in one product, and the employees might be interested in another,” he says. This doesn’t necessarily represent a conflict, Niziak remarks; often it’s the employer’s perception of what employees want as opposed to what they actually want.

“In any case, we need to identify these concerns and tailor a program that delivers an appropriate choice of products,” he says. “This is a new challenge for carriers like us because, historically, benefits have been chosen by and paid for by employers. With voluntary benefits, the employee is paying the premium and naturally wants to choose the products that best meet his or her needs.”

As the voluntary approach gains popularity among both employers and employees, Niziak remarks, carriers are under increasing pressure to enhance their product portfolio. “Employers are telling carriers like Sun Life that we need to have a more robust offering of voluntary options that make the best use of the employee dollar,” he says.

Sun Life’s employee benefits portfolio consists of group life insurance with AD&D options and an optional employee assistance plan (EAP); group short-term disability and long-term disability with a Retro Disability Benefits® option that bridges the gap between the time a disability occurs and the time long-term disability payments begin; group dental, and medical stop-loss. These products are available on a group employer-paid basis, a voluntary basis, or a shared-cost basis, depending on the employer’s preferences. “We also tailor solutions where the employer offers a basic level of coverage and employees can purchase additional limits out of their own pocket,” Niziak explains.

Medical stop-loss, he comments, is an attractive option for employers that want to self-fund their benefits program. Sun Life offers both specific and aggregate stop-loss plans for group dental and short-term disability. The stop-loss approach, Niziak explains, is a popular choice for employers that don’t want the responsibility for administering their benefits plan. “They’re willing to incur the risk of self-insuring the plan, but they prefer to outsource the administrative functions to us,” he says. “Our on-staff clinical experts can work with employers to help them manage their claims and control their costs.”

Sun Life offers its benefits products to employers whose employees range in numbers from 10 to 10,000, Niziak says. “Ten or 15 years ago we were concentrated primarily on the 2,500 to 3,000-life segment, but as we have grown and as technology has become more sophisticated, we’ve been able to expand our market to serve both smaller and larger employers.” Sun Life also has customized benefits plans for physicians, attorneys, financial institutions, and small businesses with between two and nine employees.

With benefits choices increasingly being put in the hands of employees, Niziak says, Sun Life Financial recognizes the importance of creating a distinctive and powerful brand in this expanding market.

“Employers want to know that the company whose products will be offered to their employees is experienced, reputable, and financially sound,” he says. “We’ve made a significant investment in building our brand as a stable and innovative benefits provider who can be a trusted partner for both employers and brokers. We also target TV, print, and social media advertising messages to the public to increase awareness of Sun Life’s strength and history.”

The service guarantees Niziak mentioned earlier are an essential element of the company’s branding initiative, he says. “We want to make sure not only that employees are happy with our products, but also that the process of choosing benefits and administering the plan is seamless.”

Sun Life’s focus on branding, Niziak remarks, works to the advantage of agents and brokers by creating name recognition for the company among clients and prospects.

When it comes to working with agents and brokers, he says, “We recognize that it’s essential to have a local presence. We’ve invested significantly in our distribution organization, and we have offices in most major cities around the country. Over the last several years, we’ve doubled our field sales staff and we’ve expanded from 20 group offices to 34. We want to make sure that our representatives are available and accessible to brokers, and our field people go out into the community and get to know the brokers,” Niziak explains.

“We stress to our field representatives that they have to be experts and serve as consultants so they can bring value to the brokerage community,” he continues. “We train our representatives to be resources for brokers by providing information about specific kinds of industries. For example, say a broker is interested in approaching a bank as a prospect for a benefits program. Our field rep can offer the broker information about the kinds of benefits a bank typically wants and the solutions that Sun Life can offer to meet those needs,” Niziak says. “Using this information, the broker can talk knowledgeably with the bank’s executives and, in turn, act as a consultant to them.”

In addition to understanding the products that Sun Life offers, Niziak says, field representatives must focus on the bigger employee benefits picture. “We don’t sell group health coverage, but our field people have to be conversant with current trends and issues in the group health market. We not only want to have more people out in the brokerage community, but we want them to be educated consultants on behalf of the broker. It’s incumbent upon us to make the broker’s life easier and to help the broker look good in front of the customer.”

Not so long ago, the process of enrolling employees in a benefits program was a time-consuming and tedious chore—as was the ongoing burden of administering the plan once it was in place. Today, thanks in large part to advances in technology, these once cumbersome processes have become virtually painless.

At Sun Life, Niziak says, “Each field office is staffed with account managers who support the products that we sell, and they’re available to direct the enrollment process. We also have an enrollment group at the home office that we’re continuing to build out. To educate employees about their choices in voluntary benefits, we have a wide array of materials such as flyers, e-mail messages, and posters that can be customized for the employer,” he continues.

“We can personalize enrollment information for employees with their name, age, and income. Our kit explains the coverages that are available, how much they cost, and how to sign up. We want to make the process simple so the employee understands his or her product choices and payment options and so the enrollment process is painless for the employer,” Niziak declares. “This also fits in with our goal of making the broker’s life easier so he or she can spend more time prospecting and selling.”

To make the point, he says, “We tell the employer and the broker: ‘We’re in the insurance business; you’re not. We promise to make the benefits experience positive and seamless for you so you can concentrate on what you do best.’”

For more information:
Sun Life Financial, Inc.
Web site: www.sunlife.com