IDENTITY THEFT PROTECTION
An employee benefit that delivers peace of mind
By Thomas A. McCoy, CLU
As the voluntary benefits market matures, new products are being added to benefits menus covering risks that fall outside traditional boundaries of health and financial exposures. Identity theft is one such product, and it is proving popular enough that it is being offered on both a voluntary and employer-paid basis.
According to a study by Eastbridge Consulting Group, 2018 MarketVision™—The Employer Viewpoint, 13% of U.S.employers are offering identity protect-ion coverage—4% on a voluntary-only basis; 5% as employer-paid; and 4% on a shared employer/employee funding basis.
“In recent years many employers used supplemental health products such as critical illness coverage as their introduction to the voluntary benefits space,” says Emily Rose, senior vice president of sales for LegalShield’s Business Solutions Division. “Now employers are looking for ways to expand their suite of benefits to include additional voluntary benefits. They are looking for products that will provide value to employees and are easy to implement and administer for the benefits team. A cost-effective, robust group identity theft protection plan helps benefit teams achieve that objective.”
LegalShield, which has been providing legal insurance as an employee benefit for 47 years, introduced its identity theft product, IDShield, as a voluntary benefit in 2003. Since then, IDShield has been growing at an average annual rate of 21%; it now covers one million individuals for identity theft. “Often our group legal protection plan goes hand-in-hand with our IDShield plan,” Rose notes, “with employers adding the two coverages at the same time.
“For the employer that has fully embraced voluntary benefits, identity theft can be a stepping stone into health and financial wellness benefits,” says Rose. “And for the employer that has never offered voluntary products, identity theft protection is a timely and administratively streamlined benefit for employers to consider as they enter into the voluntary benefits arena.”
When identity theft is offered as an employer-paid product, the employer commonly pays for individual coverage, and the employee opts, on a voluntary basis, to add coverage for family members, Rose says.
John Thornton, executive vice president of sales and marketing for Amalgamated Life Insurance Company, calls identity theft “one of the fastest growing employee benefits.” Amalgamated entered the identity theft market about two years ago via an agreement with CyberScout®, to market CyberScout’s identity protection products to single- and multi-employer groups nationwide. These products include identity management, credit monitoring, dark web monitoring and risk minimization services.
“To date, we have received steady interest in these solutions although we are still in the early stages of marketing to identify growth patterns,” says Thornton.
“A large percentage of Americans have experienced some form of cyber theft or know of others who have,” Thornton points out. “High profile data breaches continue to make headlines and most people realize that no one is immune to a possible cyber attack. It’s not a matter of if, but when. We believe that cyber security and related solutions are of great interest to individuals across all ages and demographics,” he says.
Rose agrees. “Identity theft doesn’t discriminate by age, gender or work title,” she says. “New employees just entering the workforce are just as susceptible as employees in the middle of their career or those preparing to exit the workforce for retirement. Unfortunately, without access to a benefit that offers monitoring, employees may not realize they have been a victim until they are buying their first car, or home or even as they are reviewing their retirement savings.”
Fraudulent credit card charges are a common source of identity theft claims industry-wide, Rose says. “The insurance benefit included in the IDShield plan responds in a number of ways, including when the credit card company denies reimbursement for fraudulent charges.”
Other common claims are for expenses involved in the restoration process, including childcare, lost wages and travel expenses, incurred by the participant who needs to appear in court to resolve an identity theft issue, she explains. IDShield’s coverage offered as an employee benefit has a $1 million limit.
Thornton notes, “The industry is seeing more claims filed for cyber attacks and cyber extortion through anonymous online threats. In these instances, financial reimbursement related to the costs associated with the theft of digital information and assets is made up to the policy limits.”
Social media has opened up a new area of vulnerability to theft of personal data. Once again, the risk spans all ages and other demographics, and identity theft protection can respond.
“A person’s social media account can include personally identifiable information,” Rose points out—“their date of birth, where they work, where they live, their email address. Sometimes people go so far as to put their phone number or their full mailing address. IDShield can monitor a plan participant’s Facebook, LinkedIn, Twitter, and Instagram profiles for information that may put them at risk. We can advise them of potential problems and take care of them on behalf of the participant.”
IDShield monitors social media for a participant’s exposure to reputational risks. “We look for vulgar or inflammatory language or photos that someone else may have posted that could be embarrassing,” Rose explains. IDShield can then notify the participant and take down something that could be harmful.
Thornton says, “Cyber criminals are targeting social media platforms at an increasing rate. They are using new methods such as social bots—automated software that controls social network interactions by persuading other social media users that they, the bots, are real people.
“The primary intent is not to steal financial data, but rather to create negative or false perceptions that can damage reputations by taking personal information and/or photos and posting it on another unauthorized site. This in turn can affect an individual’s ability to secure credit, employment or business opportunities.
“Different carriers have different policies and coverages relating to social media attacks,” he notes.
Thornton and Rose agree that protection for social media risks can be an especially valuable feature in plans that include coverage for family members. At IDShield, 70% of covered employees have chosen the family plan, which includes up to 10 family members.
Whenever any person in the family—adult or minor—has his or her identity compromised, the experience is likely to compromise the work performance of the working adults in the family. Employers, whether they offer identity theft on a voluntary or employer-paid basis, are making it easier for an employee to stay focused on the job at a difficult time; absenteeism and presenteeism are likely to be reduced.
“Another benefit to employers from offering the coverage,” Rose explains, “is the residual effect it may have on the company’s own data security objectives. The more informed employees are about online threats to their personal information, the more likely they are to recognize threats to the employer’s data security and help reduce those threats.
“For example, if they are checking personal email, they may be less likely to click on a phishing email that could potentially open an employer up to being vulnerable. By giving employees tools to protect themselves and to educate them about threats to their personal identity, it can leak over into the employer side and help make for a safer corporate security environment.”
Thornton adds, “As with any risk management offering, employers who make identity theft and credit monitoring services available to their employees demonstrate that they take their employees’ concerns seriously and are proactive in helping them attain vital protection.”
IDShield’s product offered within an employee benefit plan has rates based on group size and is available for family or individual coverage, monitoring one or three credit bureaus.
Rose acknowledges that the market for identity theft coverage is “saturated,” with much of what’s available being offered outside of the workplace. “We work with employers to make our coverage affordable, and employees put a value on the due diligence of their employer in selecting a product for them,” she says.
Amalgamated, through CyberScout, has two pricing levels. The Silver Plan includes one-bureau monitoring, dark web monitoring and 24/7 access to a fraud specialist. CyberScout’s Platinum Plan pulls information from three credit reporting agencies and provides additional social media monitoring for employees and their children.
Thornton puts the pricing question in perspective this way. “Given the average time it takes an individual to recover their identity is 165 hours and could entail spending over $4,000, the cost is very affordable—less than a cup of coffee a week.”
Thornton predicts the need for identity theft coverage will continue to grow “as new and more pervasive cyber threats occur at increasing rates—whether from ransomware, malware, phishing or social engineering attacks. As our world becomes more connected with increasing smart technologies being deployed, from our mobile devices to smart home technologies, cyber thieves have more opportunity to capture sensitive data,” he says.
Decades ago, long before the Internet completely altered our speed of access to everything, good and bad, Betty Rollin wrote an essay for The New York Times about happiness. It included a line that was something like, “I worry about when happiness might end. Will it be gradual or ‘Pow!?’ I’m most afraid of the ‘Pow!’”
Today’s digital world has accelerated and expanded the possibilities for the “Pow!” event—the jolt out of nowhere that immediately darkens an individual’s life and requires fast action. When someone’s personal identity data is stolen, the victim can be jolted by direct financial loss, lost time spent in recovering and a 24-hour cycle of stress that can go on for weeks.
Identity theft protection provides peace of mind by preventing, detecting and resolving threats to our personal data. Its future as an employee benefit looks bright.
For more information:
Amalgamated Life Insurance Company
Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.