Voluntary Benefits Best Practices for Communication and Enrollment Presented by: Stephen Ivey, Director of Voluntary Benefits
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About Our Presenter Since 1994, Steve s been in the voluntary benefits industry and advocates a professional, consultative approach that encourages suitability over carrier-specificity. Steve is revered as a voluntary benefits expert among his peers and has been awarded as such. Steve stays involved with the insurance and financial community through his National Association of Insurance and Financial Advisors membership and currently serves on the Greater Chesapeake Charitable Foundation Board. 4
Agenda State of the Industry Essential vs. Fringe Communication Studies Different strategies Millennials Integration Technology 5
State of the Industry 39% of employees in 2016 were enrolled in an HDHP 43% of employees in 2017 were enrolled in an HDHP 72% of large employers (500+ employees) are expected to offer an HDHP plan in 2019 Lots of discussion on plan risk management, not as much on EE risk management 6
State of the Industry EE Financial Risk 3 in 5 workers with medical coverage report their deductible is over $1,200, including a quarter who say it is $3,000 or more. They indicate they would not have the funds available to pay for a $3,000 medical expense. Ways Working Americans Would Pay for a $3,000 Medical Bill From a checking/savings account 44% Make a deal to pay over time 37% Put it on a credit card 34% Loan from family, friend, bank, 401(K) 24% Exposure to higher out-of-pocket costs threaten working Americans financial wellness 7
Question #1 What percentage of large employers (500+) are expected to offer an HDHP plan in 2019? a. 72% b. 39% c. 43% d. 50% 8
State of the Industry 65% are highly satisfied with their benefits package 59% say their benefits contribute to their financial security Benefits Satisfaction = Job Satisfaction 84% with high benefits satisfaction report high job satisfaction Benefits Satisfaction = Job Loyalty 74% with high benefits satisfaction want to stay with their current employer for 5+ years 9
Essential vs. Fringe In 2013, 41% said voluntary benefits would have little importance. Today, 5% of respondents say voluntary benefits will have little importance to their employee value propositions and total rewards strategy. Also, 69% believe voluntary benefits will be a very and more important component of their employee value proposition in 3 to 5 years For 2018, 42% of employers offered at least one of the 3 supplemental health plans, and 18% offered all three. (ACC, CI, HI) Voluntary benefits now viewed as essential, Willis Towers Watson survey finds 10
Essential vs. Fringe Percentages of employers offering these supplemental health benefits, per PWC study in 2017. Other voluntary benefits included in the study are identity theft, pet, long-term care, student loan programs, and financial wellness programs. 2016 2017 2021 Accident 46% 52% 76% Critical Illness 43% 48% 71% Hospital Indemnity 24% 27% 50% Voluntary benefits are generally considered an integral component of an employee benefit strategy 11
Question #2 In 2017, what percentage of employers said voluntary benefits will have little importance to their employee benefits strategy? a. 41% b. 42% c. 69% d. 5% 12
Enrollment Studies (LFG) However, 1 in 2 say the benefits information they receive is confusing 79% feel their employer could do more to ensure they understand their benefits 90% of employees say they are more likely to enroll in benefits they feel educated about 65% look at information outside of work hours 90% review with spouse or partner Lincoln Financial Group publication including Re-inventing the enrollment experience 13
Enrollment Studies (LIMRA) More than 70% of employers surveyed believe voluntary benefits improve worker morale and job satisfaction Nearly 60% of employees prefer to buy health benefits at work 50% of employees prefer to buy life insurance through work Voluntary supplemental sales grew 4% last year, fifth straight year of growth Growth of the Worksite Marketplace - MetLife 14
6 Insights to Employee Preferences (Overall Benefit Communication) 1. Want help stressful decision confusing process (49% for ages 18-34) 4 out of 5 feel the company has their best interests at heart 2. Don t know how to calculate the full cost of health care do not understand employer contribution 3. Don t know enough about HDHP - 65% said they were either risky, disappointing or confusing What employees want from the open enrollment experience 15
6 Insights to Employee Preferences (Overall Benefit Communication) 4. Like having choices 5. Trust employer s communication 6. Want info in a variety of channels 60% - electronic 52% - print 32% - personal consultation 30% - live group meetings 22% - benefit fairs What employees want from the open enrollment experience 16
Question #3 What type of communication channel should be used in helping employees to understand the benefits offered during open enrollment? a. Live group meetings b. Electronic information via email, intranet c. Benefit counselors d. Benefit fairs e. All of the above 17
8 Tips for Benefits Enrollment Best Practices for benefits enrollment 1. Create a campaign think of OE as a marketing campaign 2. Tailor-made messaging use information to tailor messages to different audiences 3. Revisit, re-evaluate, remember get feedback to improve the process 4. Campaign early start well before the actual open enrollment dates 5. Give the information time to breathe have a process that is not overwhelming 6. Engagement is the key active enrollment vs. passive enrollment 7. Talk the talk communicate effectively about benefits with multiple generations across different platforms 8. It all comes together holistic message 18
8 Tips for Benefits Enrollment 1. Create a campaign a. Announcement letters b. Flyers, posters, brochures c. Videos (carrier or 3 rd party) d. Emails (can have embedded videos) e. Timeline for each that works with OE published timeline (can start 90 days out) 19
8 Tips for Benefits Enrollment 2. Tailor-made messaging a. Emails based on demographics b. Accident plans millennials, families c. Critical illness plans older ages, 40+? d. HI plans examples of how it costs with and without supplemental coverage e. Mobile applications f. Decision support tools 20
8 Tips for Benefits Enrollment 3. Revisit and re-evaluate a. Evaluate campaign b. Evaluate messaging c. How to make the process better 4. Campaign early a. Timeline should include pre-enrollment strategy prior to OE can be 4-8 weeks before the start b. Voluntary timeline should be written out with who does what by when c. Employees need to see messaging and information multiple times 21
Question #4 Best Practices for benefits enrollment Using best practices for benefits enrollment, why would you provide examples and information for different demographics? a. The plan would be cheaper for younger employees. b. To help a specific age group understand why the plans work for them c. To discuss best plans with family members where applicable d. Because some people do not have access to mobile phones or computers 22
8 Tips for Benefits Enrollment 5. Give the information time to breathe a. Communication throughout the year an extension of pre-enrollment process b. Needs based communication for supplemental health plans (claim examples for ACC, CI, etc.) c. Wellness benefit reminders (a great, but under-used benefit) 23
8 Tips for Benefits Enrollment 6. Engagement is key a. Active enrollment vs. passive enrollment (doesn t necessarily mean making new elections or lose benefit) b. Reasons for active enrollment: New benefit Compensation statement Confirmation of elections and deductions c. Positioning of supplemental health benefits on the enrollment platform right after medical is preferred versus at the end of the elections 24
8 Tips for Benefits Enrollment 6. Engagement is key d. Decision support tools on the website with the benefit election e. Group meetings f. Benefit counselors how to use, per diem or salaried vs. commissioned, outside firm or internal personnel g. Kiosk enrollment support h. Hall center support No single way is the best, but a multi-faceted approach generally yields the best education and the best results. 25
8 Tips for Benefits Enrollment 7. Millennials a. Make it easy, be brief, entertaining and authentic with clear direction b. What s in it for me? Consider offering treats, techy giveaways to boost attendance if not mandatory. c. No paper or print guides for this group. They prefer electronic information could be on company website, emailed to them or available through notifications on company social media. d. Send text messages with reporting features e. While we work with this insurance terminology daily, most employees do not f. Be sure to reword the insurance jargon! g. Make everything available 24/7 Recognize the values that differ from their generational predecessors. Recommendations to have a successful open enrollment with millennials 26
Question #5 What is one way to hold a successful open enrollment for millennials a. Hold several long open enrollment meetings to give time for proper plan selection b. Provide print guides for the group to read through during down time c. Make everything available 24/7 in an electronic format, including on social media d. Make meetings mandatory 27
8 Tips for Benefits Enrollment 8. Our integrated model approach Dedicated Voluntary Account Manager Needs based consultation Administration and Billing Carrier and Plan Design Selection Enrollment Meetings Employee Education 28
Technology Tidbits While accident and hospital plans can be almost universally built in a platform, critical illness can be tricky For example: age banded rates vs. issue age rates. Tiered rates with age bands. Non-linear rate structure. Late entrants and medical underwriting. Make sure. Use decision support tools, videos, flyers, library of forms, co-browsing for enrollment counseling Place supplemental health plan options right after medical, whole or universal life right after voluntary term life in the decision making process. All platforms are not the same and voluntary carriers have their preferred technology partners 29
Questions? If you have any further questions about the information discussed in this webinar please feel free to contact us at: AP Benefit Advisors, LLC HQ: 200 International Circle Suite 4500 Hunt Valley, MD 21031 1813 Sweetbay Drive Suite 10 Salisbury, MD 21804 M.F. Irvine 21 East 5 th Avenue Conshohocken, PA 19428 Stoudt Advisors 280 Granite Run Drive Suite 250 Lancaster, PA 17601 2975 W. Executive Parkway Lehi, UT 84043 (800) 451-8519 www.apbenefitadvisors.com Download Slides www.apbenefitadvisors.com/webinars/ Questions & Requests info@apbenefitadvisors.com