Benefits Company

Big benefits for smaller employers

"Simply Unum" helps brokers deliver solutions on an integrated platform

By Elisabeth Boone, CPCU

When property/casualty agents think about employee benefits, the first word that leaps to mind probably is not “simple.” For a litany of familiar reasons, many P-C producers just don’t feel comfortable discussing benefits with their commercial clients, even though those clients need the products and want to work with the agency that knows them best.

As relentlessly rising health care costs drive the price of group health insurance ever higher, employers are intensifying their search for ways to control costs while still offering affordable options to their workers. Increasingly, employees are being asked to take on more of the responsibility for their health care costs, and that’s a tough proposition even in the best economic times.

Although businesses of all sizes are struggling to rise to this challenge, small to mid-sized companies are being particularly hard hit. Their very survival may depend on their ability to rein in the cost of benefits, and many smaller employers have been forced to drastically cut benefits or increase deductibles and copays.

What’s more, smaller employers often are straining to meet the administrative demands of implementing and maintaining a benefits program. In addition to shouldering this responsibility, the human resources staff may be called on to manage issues related to restructuring or layoffs.

Standing ready to meet the needs of this market is Unum, a leading provider of employee benefits with operations in the United States and Great Britain. In April 2008 the insurer launched Simply Unum®, an integrated product and service platform that allows companies with 10 to 500 employees to choose from a menu of group and voluntary benefits. Now available in all states, Simply Unum has more than 3,500 customers and has won several awards for its system design.

Making it easy

Heading up the Simply Unum business unit is Andrea Gordon, vice president, a 25-year veteran at Unum, who has held a variety of positions in the areas of sales and service.

The impetus for creating the Simply Unum platform, Gordon explains, arose from the insurer’s awareness of smaller employers’ need for a comprehensive benefits solution that provides broad product and funding choice, employee education and enrollment, and ease of administration including simplified and real-time billing.

“Our target market is the smaller employer that is typically very stretched from an HR standpoint, particularly in this economy,” Gordon says. “These companies often have a lean HR staff that is trying to cover a lot of areas. Our challenge was how to solve that problem for the employer with an integrated, simple system to deliver and administer benefits that are both employer and employee paid.

“We wanted to bring those two product categories together through common processes for quoting, case setup, employee education, enrollment, implementation, and administration processes,” she explains.

“Traditionally, voluntary and group benefits have been in separate ‘silos,’ even if they were offered by the same company,” Gordon continues. “We’ve brought those two products together to create administrative efficiencies for the employer.”

The Simply Unum platform, she says, was created with input from every department in the company that interacts with a customer. At the core was the IT division; also actively involved in developing and testing the system were representatives from the sales, underwriting, enrollment, service, and claims units.

Using Simply Unum’s integrated platform, Gordon says, “We are able to deliver the full spectrum of employer-paid and voluntary products to the employer. On the voluntary side, we offer traditional worksite products that are underwritten and purchased on an individual basis: accident, critical illness, individual short-term disability, and whole and term life. These products are typically age banded, so the employee pays a premium based on his or her age at issue,” she explains. “The products are totally portable.”

Simply Unum’s group benefits menu includes employer and employee paid Life and AD&D, as well as short-term and long-term disability coverages. The integrated platform, Gordon says, gives an employer the flexibility to select group products that are entirely employee paid or whose cost is shared by the employer and the employee.

“We’re not seeing a lot of competitors in this space that are truly offering integration with the breadth of product portfolio that we have,” Gordon asserts. “With Simply Unum, we’re able to offer more than 28,000 possible product combinations.”

The enrollment process, which traditionally has been dreaded by employers and producers alike, is virtually painless with Simply Unum, according to Gordon. “We manage the entire enrollment process, and we offer flexible options for employers to choose from,” she explains.

“For an employer whose workforce is more professional in nature and has easy computer access, online enrollment may be a popular choice. In a manufacturing firm or other similar industries, employees may be more comfortable enrolling over the phone or in a face-to-face meeting with one of our benefits representatives. We work closely with the employer to design the best enrollment strategy that is most appropriate for his employees,” Gordon says.

A boon for brokers

Although voluntary products are becoming more popular because of the difficult economy, not all employers are eager to offer them, Gordon observes. “We’ve seen a lot of employer resistance to offering worksite products because they’re very labor intensive. The employer has to set up a system for payroll deduction of premiums and then has to take responsibility for administering the program once it’s in place. Our integrated approach makes it easier for our brokers to introduce the concept of voluntary benefits,” she says.

“With Simply Unum, our brokers can offer employers a way to remove those barriers with respect to the complexity of implementing and administering a worksite benefits program,” Gordon explains.

“Our platform operates more like a group platform and makes it easier for the employer to administer all of its benefits, not just the group products,” she continues. “This lets us go deep with each customer and offer the spectrum of benefits in an integrated way. If the employer buys short-term disability from us, it’s just as easy to add critical illness and accident because it’s all managed on the same platform, front to back. Overall, it’s a much more comprehensive and consistent delivery system,” she declares.

In addition to giving brokers an integrated benefits solution to offer their clients with 500 employees or fewer, Gordon points to another reason that Simply Unum should appeal to brokers. “Brokers want to be out selling: identifying prospects and acquiring new customers,” she says.

“Often a broker wants to provide a value-added service to a client and gets involved in helping the client administer worksite products, and that’s very time intensive for the broker. The Simply Unum platform incorporates real-time billing, so if you make a change to one product, that change is made throughout the system.

“That eliminates a lot of the back-end work that can bog down a broker,” Gordon says. “Our pitch to the broker is that Simply Unum is not just good for the employer but also should help reduce the amount of work the broker’s administrative team is doing for the employer with respect to ongoing administration and billing reconciliation.”

For property/casualty producers who want to offer benefits solutions to commercial clients, Gordon remarks, Simply Unum offers some key advantages over competitors.

“In the past, delivering an integrated benefits solution to the employer was much more difficult for a P-C producer because he had to work with a carrier that offered both group and voluntary products but had them in the separate ‘silos’ we mentioned earlier,” Gordon says.

“The integrated platform of Simply Unum reduces the amount of time it takes the P-C producer to become comfortable in this environment. He already knows that his customers have a need for these kinds of products. If he can bring them to the customer in a way that’s easy and streamlined and administratively simple, the producer doesn’t have to be an expert in benefits,” Gordon asserts.

Choices for a tough economy

The economic downturn has significantly increased the appeal of voluntary and combined voluntary/group products for employers who are struggling to control costs while still offering their employees affordable lifestyle-appropriate product choices at the worksite.

“We’re definitely seeing a trend for employers to pass more of the cost of benefits on to employees,” Gordon observes. “We recently introduced an option called Benefit CreditsSM that allows employers to control their costs by offering employer-funded credits in fixed dollar amounts to employees, who can then apply the credit to the coverage they choose,” she explains.

“For example, say I’m an employer who wants to offer my employees short-term disability coverage and that it will cost $100 a month per employee,” Gordon says, adding that she’s chosen $100 for illustrative purposes only. “Out of my budget, I can afford $30 a month. I’ll fix that as the amount I’ll always pay for STD, and I’ll know that it’s never going to change. I pass the remaining $70 on to my employees. The employees get the coverage at a reduced cost, and I as the employer enjoy the security of a fixed cost, which is a big advantage, especially in a tough economy like the one we’re in now,” Gordon says.

“A big part of the reason that employee benefits programs are always going out to bid is that costs are always changing,” Gordon points out. “Employers are always feeling like they should be shopping their coverage to get the best deal. If you can fix your costs, you’re in a very strong position.

“Next year the employer in our example might be willing to put in $40 instead of $30, but in any event he always knows what his baseline cost will be,” she continues. “That allows the employer to plan from an HR perspective what benefits he will offer from year to year.”

An agent or broker who can deliver a simple, comprehensive benefits solution to clients with 500 or fewer employees is sure to be a hero to those clients—and to retain those clients when competitors come calling.

“The P-C broker has a huge competitive advantage because he has established relationships with the employers we’re targeting,” Gordon says. “With Simply Unum, we can make the benefits process easy and painless for both the employer and the broker.”

For more information:
Unum
Web site: www.unum.com