Benefits bundling seen as a strategic advantage
Momentum has been building to tear down any barriers that separate core benefits from voluntary products so that producers can elevate their strategic role and secure better results across their book of business.
By offering more choice through voluntary benefits in combination with high-deductible health plans and various savings accounts, the thinking is that employers, with the help of brokers and advisers, can mitigate over- or underinsurance of their employees.
Case in point: AmeriGas, the nation’s largest retail propane marketer, has not only eased the administrative and reporting burden for its employees through the Benefitfocus Marketplace since 2015, but also significantly raised participation in voluntary plans.
Also see: “How to have the best open enrollment yet.”
“The ability to have affordable products for unexpected illnesses or accidents that arise that are not covered in a medical plan is a critical component of offering an end-to-end benefits consulting service,” opines Jeff Oldham, VP of consumer strategy at Benefitfocus.
Andy Rosa, director of HR, benefits and workforce health at AmeriGas, likes the idea of a single platform that allows employees to mix and match their core benefits with voluntary or ancillary benefits and see how all those parts fit together. The one-stop-shop approach made available through a cloud-based benefits management platform from Benefitfocus simplified open-enrollment messaging and helped explain complex concepts.
AmeriGas employees are now able to understand how critical illness and accident coverage, along with a flexible spending account, could support their group medical plan with a high deductible. In fact, more than one-third of the roughly 6,500 employees who chose medical benefits also signed up for a critical illness or accident plan. The company has 8,500 employees who are eligible for benefits.
The pecking order of these voluntary benefits, which often are communicated as an afterthought, certainly cast a light on their importance during last year’s enrollment. They were packaged together and listed just right behind medical coverage options.
“It was moved up into the medical plan category because that’s really how people have to think about it,” Rosa explains, noting how the prioritization resonated with employees who gave these plans more careful consideration.
Another number worth noting was a 35% increase in people who opened an FSA, which was listed right after dental and vision options. This result was attributed to the use of a benefits informatics system from Benefitfocus that allowed employees to view on the enrollment site their prescription drug and medical spending over the past year. It was much easier than having to fish out a year’s worth of explanations-of-benefit forms and receipts, he says.
Oldham observes that voluntary products “historically were devised to be sold on paper and either physically at the worksite or through a call center type of enrollment, and as a result, they weren’t very conducive to self-service.”
But times have changed and employers have noticed much greater demand for these benefits to help ease the sting of delivering difficult messages about healthcare cost increases, “Offering your employees more choice isn’t a bad way to sort of balance the bad with the good,” he adds.
Rosa believes that a more strategic use of self-service technology at open enrollment represents an opportunity for benefit brokers and advisers to examine the industry landscape and vet partnerships with best-in-class providers that best fit their employer client needs. “The last thing you want to do as a benefits manager is put something into place that is a benefit and make it cumbersome and difficult for the employees to get to and impacts their paycheck,” he says.