By Dale Nichols
Understanding the intricacies of enrollment strategies for your voluntary worksite products is often the single most important factor when considering risk protection. Unlike retail simplified issue individual products, underwriting is a significantly less critical component of the overall success of a voluntary worksite program. Sometimes, the application for a voluntary worksite product only includes an actively-at-work question. Unlike a group, employer paid product, the probability of near 100 percent participation is highly unlikely. Therefore, it is important to clearly understand your enrollment strategy and how it will counteract the anti-selection inherent in programs with little underwriting requirements where participation is not driven by an employer premium payment.
While there are many factors that lead to success in selling voluntary benefits, including customer need, number of products, demographic buying patterns, enrollment method, SIC code, and bargaining group presence, the most important factor to consider is employee access. Regardless of the enrollment method, providing enrollers with a positive working condition is the key to a successful voluntary benefit implementation. Whether the enrollment is counselor-assisted or self-service, an active, mandatory enrollment (an enrollment strategy set by the employer and broker/consultant that requires all eligible employees to participate in the enrollment process) is ideal.
Why does access matter?
- From the Employer’s perspective
- Offers a forum to cover any important corporate initiatives.
- Can reduce the cost of employee enrollment and benefit administration.
- Increases employee engagement and retention.
- Generates fewer employee questions for HR.
- Builds morale.
- Reduces the need to pay for certain benefits.
- From the Employee’s perspective
- Leads to better understanding of all benefits, which creates appreciation.
- Creates the opportunity to fill a benefit gap.
- Improves informed buying decisions which leads employees to keep their coverage longer.
- From the Producer’s perspective
- Provides the participation required to be considered successful.
- Provides other value-added services such as communication tools, dependent eligibility auditing services or benefit administration services.
- Generates additional opportunities to interact with potential customers and the success needed to strengthen client relationships.
- Successful enrollment leads to referrals.
And finally, why is employee access important to the Insurance Carrier?
- Improved risk profile: Better employee access leads to better spread of risk.
- Increased premium: Good employee access will also lead to higher premium.
- Increased persistency: The voluntary benefit replacement cycle is less frequent than traditional benefits—potentially creating a longer-term customer.
- Greater profitability: Employee access has a direct impact on profitability. The more employees who participate, the greater the spread of risk, which minimizes anti-selection.
- Improved, more competitive pricing: During the product development cycle, actuaries examine historical claims results but may not link the results to the enrollment method or the level of employee access.
So, how do industry leaders obtain access?
- Employee access needs to be defined and confirmed at the beginning of the sales cycle. Many enrollment providers and carriers ask for a signed two or three year strategy from both the broker and employer to ensure a solid understanding of the expectations.
- Access is positioned along with the product package.
- The employer group is educated on the importance of access, or participation in the enrollment process, which is the key driver for advantageous underwriting approval and ongoing product offering.
- Professional delivery minimizes work-flow disruption. Most often employers will work with an enrollment partner to determine an appropriate strategy for their population and to execute that strategy. Whether it is a face-to-face, call center or self-service enrollment, each requires its own unique roll-out.
Although the enrollment method used is not the most important factor, it can have a great impact on the level of voluntary benefit participation. Each enrollment method has its distinct advantages. During counselor-assisted enrollment meetings (either face-to-face or over the phone), employees have the opportunity to ask questions and receive immediate feedback. This interactive approach improves the level of employee understanding and participation during the enrollment process. One-on-one meetings also allow a benefit counselor to create a personal connection with the employee, improving the level of trust. Counselor-assisted enrollments typically have the highest levels of participation; therefore, the risk is spread among a larger percentage of the employee population.
Self-service enrollment offers the convenience to enroll at any time. Although you may have lower engagement than that provided from a counselor-assisted environment, best-in-class online systems incorporate decision tools and video assistance to help improve the employees’ level of understanding. Participation rates also rise with the addition of online chat or call center support, allowing counselors to answer questions on benefit offerings and system navigation.
Example of Multi-year Enrollment Strategy
Below is an example of a multi-year enrollment strategy often recommended when introducing voluntary benefits:
Year 1: Counselor-assisted annual enrollment with each employee, introducing one or two voluntary benefit products. Ongoing newly eligible employees call a contact center for a personalized benefit onboarding experience.
Year 2: Counselor-assisted annual enrollment, introducing an additional voluntary benefit product. Ongoing newly eligible employees call a contact center for a personalized, benefit onboarding experience.
Year 3: Introduce self-service enrollment for annual events (potentially with call center support) and continue call center benefit onboarding for all newly eligible employees.
In summary, regardless of the employer’s chosen enrollment method for its employees, the key drivers of participation are working conditions and employee access. These “working conditions” are the communication and support mechanism that an employer provides to ensure that all or most employees participate in the overall enrollment process. Enrollment partners and carriers can predict participation levels, but only for those employees that were exposed properly to the products. Therefore, the “working conditions” are directly correlated to the ability to reduce our risks. If all, or almost all, employees are exposed to the product, we can determine how to build, price and underwrite products in a predictable manner, reducing our exposure to anti-selection.
Dale Nichols, chief operating officer at Benefits Communications Inc., works with partners (insurance companies, brokers, large employers, technology firms and consultants) to customize affordable solutions in the areas of benefit enrollment, communications, data management and staffing. Dale can be reached at dnichols@benefitcommunications.com.