Implementation of the Affordable Care Act and other factors have created uncertainty with employers as they review their employee benefit portfolios. According to Phyllis Falotico, assistant vice president, group and worksite marketing, for The Guardian Life Insurance Company of America, "Market changes and cost shifts are causing challenges and anxiety for employers and employees, and also for brokers responsible for developing successful benefit strategies." Agents and brokers who understand market benefits trends can grow their business by attracting and retaining clients.

"Our 2015 Workplace Benefits Study findings say 42% of employers surveyed said they plan to ask employees to bear a greater portion of the benefits cost," she notes. "This is happening at a time when workplace benefits have become even more critical to the financial security of today's working Americans."

Scott Truka, workplace life sales manager at EMC National Life, adds, "The voluntary market should grow, as more employers shift costs to employees and provide alternatives with solutions to help eliminate financial exposures caused by their health care plan changes."
The Affordable Care Act has led to larger deductibles and coinsurance on employee medical plans. "Supplemental benefits are being used to fill gaps and reduce employees' out-of-pocket expenses," explains Janet Buzil, MBA, HIA, vice president of marketing and product development for Combined Insurance. "As people and employers move to the exchanges, products like critical illness, accident and hospital indemnity can help people manage their own risks and do so affordably."

Employee engagement is on the rise. "Health care reform made employees take more ownership in their benefits choices and decisions," says Kathy O'Brien, vice president of voluntary benefits for Unum's National Client Group. "The time of an employer making all the benefits choices and decisions is all but gone. The upside of this is employees are better able to customize benefits to meet their and their family's needs."

Jeff Kolesar, vice president of group sales and market development at Renaissance Dental, says, "Growing popularity of health and wellness initiatives among employer groups has created demand for various ancillary benefits offerings. Employees increasingly want a range of benefits options that meet their needs, and they're willing to share the costs."

"Non-insured benefits are becoming more attractive to employers and employees," adds Joel Ray, chairman and CEO of New Benefits. "Thanks to increased deductibles and co-pays, employees are paying more-even for things like normal doctor visits, which may not be covered at all until a deductible is reached. Products like telemedicine and health and financial wellness programs are quite popular."

His firm offers 40-some medical and lifestyle products. "We've been doing this at the worksite for 25 years, but it's really taken off since the Affordable Care Act passed," Ray notes. "As they buy insurance, people find out what's covered and what's not. As they figure out how to cost-effectively protect themselves, non-insurance benefits play an important role."

Another trend in voluntary benefits is a shift to group. "In the past, voluntary benefits were offered mostly on a true individual basis," explains O'Brien. "Since about 2012, we've seen an increase in group-based voluntary benefits and fewer traditional individual products."

Laura Bongiorno, vice president of specialty and voluntary markets for The Hartford, has seen this, too. "A continued shift from worksite to group is being driven by the surge of enrollment platforms and technology playing out in the enrollment conditions, strategy and execution," she explains. "The migration really has gotten intense over the last couple of years."

She's also seen continued migration towards the consumer-driven mindset. "This is a result of the consumer-driven medical plans, and employers are responding by offering more solutions and products, which expands employee choice."

Even sales methods are changing. "The old style of selling voluntary benefits-putting a couple of benefits in this year and then coming back next year and adding a couple of more to avoid overwhelming employees up front-is losing favor," explains Len Cavallaro, head of voluntary marketing at Reliance Standard Life Insurance Company. "Employers are more inclined to offer a full slate to start with and not revisit the decision every year."

Role of technology
Experts say that perhaps the biggest voluntary benefits market trend centers on technology. "It's not really about product any more, but about experience-the employer experience and the employee/consumer experience through the whole decision process," explains Bongiorno. "That experience is a combination of technology, discussion and support."

She points out that employers are no longer just deciding on products for their benefits portfolio. "They're now having to decide on the best venue to execute," she notes.

Jim McGovern, vice president, employee benefits division, at OneAmerica, agrees. "It's all about IT," he says. "Everyone seems to be focusing on information technology being the solution to all of their woes and problems, and rightfully so. There are many challenges in working without a good IT platform. Employers have gone from a paper- or Excel-driven world to one where analytics, collection and reporting of data-to the Department of Labor or the IRS-are required."

He says the voluntary market has actually helped drive IT solutions around ACA compliance. "Voluntary carriers are stepping up to find IT solutions," he adds. "The trend right now is much more about IT and less about product, which is a shift from a couple of years ago."
Bob Ruff, vice president, broker market services, at Colonial Life & Accident Insurance Company, points out that employers have more enrollment and benefits administration solutions and options available to them than ever before. "On the flip side," he adds, "the technology explosion has caused confusion for employers as they try to sort through which system is most appropriate for what they're trying to accomplish."

"We are seeing an increase in self-serve enrollments, and as we see more benefit administration systems and enrollment capabilities broaden, it is changing the enrollment landscape significantly, especially how we enroll employees in voluntary benefits," O'Brien says. "As more clients see business being done on the exchanges, there is a heightened awareness of the importance of technology."

The proliferation of technology solutions and vendors is driving a spin-off trend of product simplification, according to Ruff. "Many voluntary carriers are simplifying their product portfolio at the employee level," he notes, "which also should simplify the underwriting."

According to Cavallaro, the use of exchanges is driving a new experience in the benefits business. "We've reached a tipping point where third-party platforms have become ubiquitous," he says. "For any aspect of employee benefits in general, but specifically voluntary benefits, there is someone out there building a better mouse trap."

He says some vendors are offering configurable platforms that smaller brokers can customize. "This helps them compete with the big houses, which are building their own proprietary exchanges," he notes.

Agent, broker response
Addressing these various trends calls for an integrated response. "A speaker at a recent conference I attended spoke about something called 'humalogy,' which is the combination of human touch and technology," explains Bongiorno. "That spoke to me about opportunity for our brokerage and agent community to really consult.

"There's a balance of technology and human-touch connectivity and influence," she adds. "Some customers might need technology. Some might need more human touch. But the balance of those two represents a consulting opportunity for agents and brokers."

Ruff agrees. "Technology can certainly help an employer's HR staff become more efficient-for example, with tasks such as ACA-required reporting," he explains. "But it's important to note, technology alone doesn't solve the critical need for communication and education to help workers understand their benefits and the options available to protect themselves and their families. Brokers need to help clients find the ideal combination of high-tech and high-touch capabilities."

Broker and agent size often dictates technology approach. "I see three levels of brokers and agents when it comes to technology response," explains McGovern. "The national brokers have gone out and built or bought a solution. They have deep pockets and scale and can build their own solution."

Regionals generally follow a different path. "Most are trying to develop a key alliance to just one vendor," he points out. "With so many vendors being bought up, some mid-size brokers are finding this approach to be challenging."

Smaller, local agencies and brokerages have a different response. "Many are working with their carriers to find solutions," he notes. "I've actually been involved in helping some of them-taking our scale to them and finding a solution that's carrier-agnostic and meets their needs and budgets." He warns against becoming too carrier-dependent in the tech solution search. "Employers want the freedom of choice," he notes.

According to Cavallaro, self-education is key. "Agents and brokers need to learn about the various technology options they can bring to the table for their clients and combine that with their product expertise." He encourages agents and brokers to talk with various carriers and vendors to understand what's available and what firms work well together.

"It's important for brokers to recognize that a one-size technology enrollment strategy, for example, just doesn't work," O'Brien explains. "Brokers need a good understanding of their clients' enrollment needs and technology capabilities, so they can present their clients with a wide array of enrollment methods to help solve their needs."

Benefit solutions
"Brokers and agents need to understand the overall benefits strategy for each of their clients-including not only products but also enrollment and communication needs-and determine how to best support that strategy," Ruff explains. "For example, what are the demographics and culture of the workforce, and how do they like to receive communication?

"They also need to understand the ideal enrollment experience to ensure maximum participation," he says. "By working with a voluntary benefits carrier that also offers education and communication as part of its services at no additional cost and can integrate seamlessly with different enrollment systems, brokers can bring these important capabilities to their clients in a single package without affecting the bottom line."

Truka stresses the importance of delivering solutions that won't increase employer expenses. "Offering traditional voluntary products, such as life insurance, disability, dental and vision, will help alleviate the problem of having to eliminate employer-paid benefits," he notes. "But also having other solutions to problems they may have not identified will help separate agents from their competitors."
O'Brien agrees. "Voluntary products can complement the employer's core benefit offering without adding costs to the employer," she notes. "They also offer flexibility for employees to port their coverage if they leave employment. For brokers, success comes from sitting down with clients to discuss what worksite benefits fit best with their current employee benefits and their employee population."

"Brokers need to provide clients with a successful communication and education plan that fully outlines all the new voluntary benefit options and engages participants to learn more," Falotico explains. "This is important, especially because employees may have to contribute their own funds to achieve the right level of protection. This will help employees better understand and value their benefits-and their employer's investment in them."

Buzil advises agents and brokers to make recommendations for coupling high-deductible plans with supplemental products. "Look at demographics-whether it's a family with children, for example-and offer suggestions on how to best manage their risks and costs," she advises. "People don't necessarily want to be told what to do, but they do want recommendations.

"Amazon tells us, 'People who bought this also bought this,'" she adds. "Take the same approach. It's helpful, because most people really aren't well-versed in insurance. They need and value advice."

She also encourages agents and brokers to be clear with employees that supplemental products are relatively inexpensive and can bring cash payments directly to them. "Benefits are paid to the employee and not the medical service provider," Buzil notes.

Kolesar recommends leveraging carrier expertise, where possible. "If brokers are strapped for time, they should partner with a carrier that's equipped to step in and answer questions or provide seminars to help employees understand how their benefits meet their needs," he says, noting that this can help boost enrollment.

Ray stresses the importance of agent and broker education. "Agents need to learn about available products-including non-insurance ones-and then incorporate them into their portfolio," he explains. "That way, when an employer says, 'My employees can't afford a $50 doctor co-pay' or 'I can't afford this health insurance premium increase,' they have a solution."

Use of voluntary products isn't just a revenue growth move. It can be defensive, too. "I tell brokers all the time, 'If you don't offer these benefits, someone will, and you'll risk losing good business if they bring your customer a solution you didn't,'" Ray concludes.