Trends in Voluntary Employee Benefits. Introduction: Definitions. We use the terms worksite and voluntary interchangeably.

Transcription

1 Trends in Voluntary Employee Benefits SHRM May 16, 2012 All information supplied in this presentation is owned by and is 2012, Eastbridge Consulting Group, Inc. You may quote from this presentation with full attribution. Any other use requires prior approval by Eastbridge Consulting Group, Inc. 1 Introduction: Definitions We use the terms worksite and voluntary interchangeably. They both refer to life and health insurance products that are sold at the worksite with premiums paid 100% by employees through payroll deduction. As a result, we exclude core or employer-paid coverages. 2 1

2 Sales Trends: Voluntary Sales New Business Premium (in millions) 3 Market: Number of Products by Size Segment # of Voluntary Benefits Offered (of Those offering Voluntary) Small Accounts (10-99 employees) Medium Accounts ( employees) Large Accounts (1,000+ employees) 4 2

3 Products: Mix of Sales by Product Line 2011 Mix by Line of Business Life continued to grab the largest share with 25 percent of sales, up slightly from 24 percent in Disability again had the next highest share with 20 percent, the same as in Hospital indemnity and supplemental medical plans captured the third largest share with 13 percent. 5 Products: Growth Trends by Product Category Voluntary /Worksite Ten Year Growth Rate Trends by Product $Mil. CAGR 7.2% 3.3% 1.5% 2.9% 1.2% 16.9% 6 3

4 Employers: Top Voluntary Products Offered Top Voluntary Products Offered 7 Employers: Top Voluntary Products Offered by Employer Size 8 4

5 Employers: Market Penetration by Product Benefits Offered Employers: Embracing Voluntary Products Twenty-one percent of employers are considering moving a product from employer paid to employee-paid. Twenty percent say they are likely to add a new voluntary benefit. % of Employers that May Add/Introduce a Voluntary Product in the Next Two Years 10 5

6 Employers: Importance Factors in Choosing a Carrier 11 Employers: Employers Motivations Most employers offer voluntary products because they perceive that their employees need the coverage. Employers also see voluntary products as helping them control the cost of benefits. 12 6

7 Employers: Role of the Broker 13 Employees: Growth by Line of Business 14 7

8 Employees: Number of Voluntary Products Owned Number of Voluntary Products Owned 15 Employees: Reasons for Buying 16 8

9 Employees: Importance of Choice Employees value having a choice of benefits. 17 Employees: Importance of Choice (continued) Almost one-third of employees say they are willing to pay more for benefits if they are allowed more choices. 18 9

10 Employees: Confidence in Your Decision about Voluntary Post-sale Attitude of Voluntary Buyers 19 Employees: Sales Potential Interest in Buying by Product 20 10

11 Employees: Voluntary Ownership by Household Income Level 21 Employees: Voluntary Ownership by Age 22 11

12 Employees: Voluntary Ownership by Job Classification 23 Enrollment: Acceptable Methods of Enrollment Employers are open to a wide variety of enrollment methods for voluntary products

13 Enrollment: Satisfaction with Enrollment Over the past decade, the industry has made significant improvements in the satisfaction employees feel with the enrollment process. Overall Satisfaction with Enrollment 25 Enrollment: Prevalence of Different Methods of Enrollment Companies offer a variety of methods, with group and individual meetings being most commonly offered

14 Enrollment: Use and Participation by Method 32-60% Enrollment Average Frequency of Use 20-50% 10-25% 7-30% 2-10% Broker handles Broker s agency has in-house enrollers Carrier provides enrollers Contract enrollers Enrollment company Carrier enrollment website TPA or Benefits administer platform Enrollment company call center Carrier call center Paper enrollments are gradually disappearing. Employee participation by method 27 Enrollment: Average Participation by Product Line 28 14

15 Enrollment: Average Participation by Enrollment Method 29 Enrollment: How Employees Learned about Voluntary Benefits 30 15

16 Enrollment: Most Helpful Communications Communications Employees Prefer 31 Enrollment: Preference for Learning about Voluntary Benefits Employee Preferences 32 16

17 Thanks! Questions? Gil Lowerre Eastbridge Consulting Group, Inc. 50 Avon Meadow Lane, Avon CT