Agents and brokers can boost revenue and retention by offering these “must-have” benefits
With all the activity and discussion around health benefits, the Affordable Care Act, the American Health Care Act, and more, it’s sometimes easy to forget there are other important benefits. Among these: dental and vision. The products have been offered for years, and their status as must-have benefits continues to be strong.
According to Wendy Herndon, second vice president of product development and implementation at Aflac, dental and vision benefits are always in the top-five requested health benefits from employees, behind major medical and life insurance. “Our 2017 Aflac WorkForces Report says that 77% of employees expect their employers to offer dental insurance, and 70% expect employers to offer vision insurance.”
Herndon says it’s becoming more commonly recognized that good dental hygiene and vision care impact employees’ overall health. “Employees with dental and vision insurance are more likely to regularly visit a dentist or eye doctor, which can aid in the early detection of health issues such as hypertension, high cholesterol, and diabetes,” she explains.
She notes that, as with major medical, more dental and vision costs are being moved to employees. “This is resulting in more employees engaging in cost comparisons for these services,” she says.
Terry Walsh, national director of sales and market development at Renaissance Dental, has seen an expansion in product offerings by carriers. “For example, carriers that may have been only a life and disability income carrier in the past are partnering and private-labeling dental and vision products that they can offer.” He believes carriers today need a full range of products in order to package all ancillary lines.
“Additionally,” Walsh says, “many mainstream carriers are now trying to find their niche, particularly around size segments. When the Affordable Care Act passed several years ago, the viability for benefits brokers to work the under-50 size segment was threatened. As a result, many brokers and ancillary dental and vision carriers consciously moved out of that space and, to a large degree, the under-100 segment. The threat never fully materialized, creating a void and considerable opportunity today for specialty brokers to focus on employer groups under 100 employees.”
According to David Guarrera, DDS, vice president and chief dental officer at MetLife, “A burgeoning regulatory environment is adding cost and complexity. For example, more states are legislating how networks operate and how plans are designed and sold. There are healthcare taxes driven by the experience with healthcare reform.”
He says employers are looking for simpler, streamlined dental and vision benefits administration. “Some firms are pulling back from employer-sponsored plans and/or ceasing to offer traditional retiree benefits or benefits for part-time employees,” he notes. “At the same time, exchanges are gaining momentum across the country as a benefit solution.”
Guarrera says carriers are addressing this growing trend. His firm offers what he describes as a “true individual, portable dental benefit plan” that’s designed to remove all administrative responsibilities from the employer. “It works for either a voluntary dental plan or as an exchange product,” he explains.
According to Mike Estep, second vice president, group product development for The Guardian Life Insurance Company of America, “More and more, employers are searching for options to their benefits challenges. Guardian’s Fourth Annual Workplace Benefits Study found that a top priority for employers is managing costs of their benefits programs, while also offering a level of coverage their employees expect.”
He adds, “It is important that dental and vision carriers have the flexibility to help them offer these benefits in an affordable way, while satisfying employees who are becoming more astute purchasers. As concern over managing costs increases, voluntary and self-funded dental programs continue to gain popularity.”
“Dental and vision are becoming more voluntary in nature, as benefit cost pressures on employers result in reduced employer contribution levels,” adds Guarrera. “However, this shift towards voluntary has not negatively impacted plan participation. Employees highly value dental and vision benefits, and they continue to expect that these benefits will be offered through their employer.”
The shift to voluntary is also leading to more multi-option dental plan designs, he adds, as consumers want choice based upon their oral healthcare needs and financial price point sensitivity.
Another trend Estep has seen is the rise of dental service organizations. “The practice of dentistry is changing, with more dentists working at larger group practices and working with dental support organizations,” he explains. “Looking down the road, dental plans can partner with these larger practice organizations to better manage the population’s oral health.”
Guarrera points to a change in purchasing behaviors, where employers today are more interested in bundling dental and vision together when making carrier decisions.
Advice for agents
There’s good reason for employers to offer dental and vision—and good reason for agents and brokers to offer it. “The 15th Annual MetLife U.S. Employee Benefit Trend Study indicates that 59% of employees say holistic benefits increase loyalty,” Jimbo Story, vice president, small business solutions at MetLife, explains, “and when the employer offers a suite of benefit options to deliver tailored solutions, productivity in the workplace will increase.” The study also points out that dental and vision benefits rank in the top six of employee “must-have” non-medical benefits.
Estep concurs. “Dental and vision benefits continue to be valued by employees and are important recruitment and retention tools,” he says. “Providing access to quality, affordable dental and vision care can keep employees healthy and productive, helping to control health costs.” He says agents can stand out by helping their clients offer these important benefits, while still managing costs.
“As employers today are changing their benefit mindset, they count heavily on their trusted advisers—including brokers, consultants, and agents—for help when making the right choice in insurance benefit products for their employees,” says Story. “And they rely on these advisers when educating employees about their benefits.”
“Knowing that employees are more involved in cost comparison and selection of these products, agents can make themselves available to provide guidance as employees navigate this new landscape,” adds Herndon. “Agents can act as their trusted adviser to ensure they are getting the services they need at a price they can afford.”
Walsh points out that insurance is not much different from other competitive businesses. “To find success, it is essential to have complete and up-to-date knowledge of the industry,” he explains. “It is very important to know what different carriers are doing, what size segment they are focused on, and their commitment to great service in those segments.”
Herndon recommends addressing added benefits. “When selling these products, insurance agents can highlight that early detection of disease can help reduce overall major medical costs for the employer and employee,” she says. “Employers should know that by offering these highly utilized plans, they can often save money by reducing medical spending on other more expensive treatments. To ensure employees seek care frequently, agents can encourage clients to offer plans with additional preventative benefits.”
Plan design expertise is a role Walsh says agents can and should fill. “They cannot be passive about it,” he says. “Also, they need to be creative in suggesting a plan design that might be a better fit for their client than the plan they have in force.”
According to Estep, it’s also important to work with a carrier that can customize a plan based on the group’s needs, with a choice of plan designs, funding options, and access to a strong network to reduce out-of-pocket costs. His firm recently introduced new dental PPO products designed to provide opportunities for savings and choice through its dentist network, as well as new Managed Dental Care products that he says offer comprehensive benefits at a lower premium cost. “Both are available employer-funded, contributory or voluntary, allowing employers to better manage their costs while satisfying their employees,” he notes.
“Agents who focus on the small market must identify opportunities to streamline the process and maintain profitability to successfully grow their book of business,” explains Story. “By bundling products with one carrier, efficiencies are created across all parties—agent, employer, and employee—to help simplify the experience and take advantage of extras that add value to all parties.”
“Looking at the long term, agents can inform clients that supplemental vision and dental insurance are considered excepted benefits and are generally excluded from rules and regulations designed for major medical coverage under the Affordable Care Act,” Herndon says. “And these products are not part of the Cadillac tax scheduled to take effect in 2020. Although regulations may evolve, agents can encourage employers to begin adding richer dental and vision benefits now to give their employees adequate financial protection no matter what life may bring.”
According to Estep, “Findings from our most recent Workplace Benefits Study indicate that financial stress has the greatest impact on the well-being of working Americans. And employees increasingly look to employer-sponsored benefits for financial security.” In addition to dental and vision insurance, Guardian offers a benefit with its dental plans designed to help employees earn “tuition rewards” that can be used to pay for up to a year’s tuition at one of more than 370 private colleges and universities nationwide.
Walsh points to the value of voluntary benefits in staff retention. “Recent data shows these benefits have become more vital than ever before in keeping employees,” he says. “Independent agents and brokers typically are dialed in on the medical, but when it comes to the ancillary market, they are, many times, not as knowledgeable.
“Today, we’re seeing a greater reliance on account managers to provide a more thorough analysis of the non-medical benefits,” he adds. “It is important to be an expert, so if an agent doesn’t have a good account manager who understands the ancillary benefits very well, he should hire one. Another option would be to use a carrier focused on service in the under 50 or under 100 segment—one that’s committed to delivering personal attention and education on dental and vision benefits.”
He sums up one key value of doing so in a short, but powerful, sentence: “Being able to properly promote these benefits to employer groups is a solid method for agents to grow their book of business.”
By Dave Willis, CPIA
For more information:
Guardian Life Insurance Company