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February 25
07:32 2021

Benefits Products & Services

By Thomas A. McCoy, CLU


Guardian stresses need for decision-making guidance

One year into the pandemic, and after the first COVID-19-controlled open enrollment season, Michael Estep, vice president of Group Products at Guardian Life, sees an increased seriousness from plan participants as they make their benefits choices. He also thinks employers and brokers are becoming more receptive to being educated on voluntary benefits.

“The average American employee will place more emphasis on making sure that they take the time to understand what benefits are being offered, and how those benefits may protect them in the midst of the uncertainty they may face today and tomorrow,” he says. “Part of our responsibility is to provide tools that can aid in that education.

“We’ve seen workers really taking a keen interest in what they bought in the prior enrollment cycle, making sure they are adequately covered and possibly making changes in the years to come.

“Brokers are now more curious about the broader benefits portfolio they can provide,” he continues. “When we look at employers of all sizes, particularly in the smaller market, there is a proliferation of dental and vision products, but when it comes to life and some of the supplemental health products, there’s still a lot of white space.”

“The digital tools can allow (employers) to offer a wide range of voluntary products without a great deal of administrative burden.”
—Michael Estep
Vice President, Group Products
Guardian Life

According to Guardian’s Ninth Annual Workplace Benefits study, the number of employers offering at least one voluntary benefit grew from 31% of total employers in 2012 to 43% in 2020. Overall, 43% say they are planning to expand their voluntary benefits offerings, and 44% expect to increase employee participation.

The anticipated growth is even stronger in certain market segments. Among start-ups (less than five years old), 60% planned to add voluntary benefit plans; among highly-digital firms, 58%; large firms (over 1,000 employees), 56%; and retail firms, 55%.

Guardian’s study was conducted by an independent research organization in the spring of 2020, just before the pandemic took hold, surveying 1,700 benefits decision makers and 2,000 full-time employees.

“We’ve found recently that employers are very interested in making sure they have adequate offerings for their employees,” says Estep. He notes that in this COVID-19 era, one product of increasing interest has been hospital indemnity.

“It’s been a focus for employers because the product is closely tied with hospital admissions and confinements. Historically, hospital indemnity sales haven’t picked up quite like critical illness and accident, but we foresee that changing in the years to come because if you’re admitted to the hospital, the benefit really does help.”

Another area of increasing employee interest is life insurance, Estep says. “The pandemic has put a sharp focus on one’s health and financial wellness, with hospital indemnity and life insurance at the forefront. Awareness of life insurance has definitely grown over the past year, particularly among younger generations of employees that previously had not considered life insurance as a product to fill that financial gap.

“With life insurance, the questions come up from people who don’t have any life insurance at all, or from those asking if they need more.

“We recommend that employers offer a broad portfolio because different employees have different needs,” he continues. “It’s easier today than ever to do that with the proliferation of digital platforms. You’re not printing out paper and handing it out. The digital tools can allow you to offer a wide range of voluntary products without a great deal of administrative burden.”

More products for employees to choose from can be a good thing, but workers still have to understand what they are buying. Clearly communicating product features and tying them to workers’ needs has proved troublesome across the benefits industry.

Guardian’s study states: “When too many options are made available without effectively explaining the needs or problems the products address (for example, who should buy an accident policy through the workplace and what specific costs will this cover that a medical plan may not), then the result is inertia.”

The study found that workers who consider their benefits communications to be highly effective has declined from 68% in 2014 to 50% in 2020. Those who said they were highly satisfied with the open enrollment experience went from 67% in 2014 to 64% in 2020.

“We found that 25% of workers feel that enrollment is overwhelming and not very helpful, and two-thirds of workers want more personalized, targeted benefits communications,” says Estep. “There is definitely a void that we need to take seriously.”

As part of the study, Guardian gave workers a “pop quiz” on benefits. In 2020 their average score was 70% (a C-). Scores were much lower for certain demographics: those with incomes below $50,000 (40%); ages 25-30 (39%); and single parents (35%). Of those who received a grade of “D” or lower, 60% gave themselves a high rating on their benefits knowledge.

“Most workers still lack sufficient knowledge about their benefits and require a more-guided enrollment experience. That could include interactive modeling tools, decision guidance, mobile applications, and opportunities for support via a call center or even a chat bot,” Estep says.

The study found that employees’ perceived value of their benefits program jumps substantially when the benefits are communicated effectively.

Employers recognize this need for more effective benefits communication. Only 54% of employers said they believe their employees have a strong understanding of how their benefits work, and 39% agree that their organization needs to educate employees better about their benefits selections during open enrollment.

For employers, the payoff from a positive benefits enrollment experience is a more loyal workforce. Guardian’s data shows that 79% of employees expressing high satisfaction with their enrollment experience want to stay with their employer five years or more. For those expressing low satisfaction, 52% want to stay with their employer for five years or more.

One simple tool that is linked to higher workers’ satisfaction with their benefits plan is to survey them regularly about their enrollment preferences. One in three employers that do this have employee satisfaction scores 10 points above average, according to Guardian’s study.

Guardian recently introduced a new tool to broaden consumers’ awareness and understanding of supplemental health products—a campaign called “Simply Put,” consisting of a series of five two-minute videos, one explaining voluntary benefits in general, and one each on hospital indemnity, dental insurance, accident and critical illness. All are presented in a simplified, lay-person language format.

“The logic behind the campaign is to take the complications out of explaining the benefits products,” says Estep.

The videos are light in tone. The first one in the series begins with a consumer asking: “Voluntary benefits? What exactly am I volunteering for?” The product-specific videos explain the voluntary benefits using a Q&A format and direct the consumer to their employer or broker for more information. As of mid-January, the videos had received more than 2 million views from consumers, employers and brokers.

“The ‘Simply Put’ campaign lets us demonstrate the need that exists for these products and then provides brokers and consultants with the tools they need to have those conversations ultimately with the benefits decision maker, whether it’s an HR manager, CFO or benefits manager. It’s creating this open dialog, and the brokers are taking interest in it,” says Estep.

“Our focus as an insurance company is to make sure we provide decision guidance that helps a worker understand ‘what are these benefits, and how can they help protect me?’”

For more information:

Guardian Life “Simply Put”

The author

Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.

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