Voluntary Benefits Choosing the Right Fit

Steve Ivey Director, Voluntary Benefits

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.

Intro/Agenda

Thought processes for an effective

integrated voluntary benefits plan.

• State of the market

• Primary vs. Supplemental

• Price vs. Process

• Client Centric vs. RFP mentality

• Communication and Enrollment

• Administrative Platforms

Choosing the Right Fit

Current Plans - Designs and

Goals

Group demographics and locations

Plan pricing and

underwriting

Prior experiences

Communication and Enrollment

Strategy

Administration – enrollment and billing

Primary vs. Supplemental

Primary

• Health Insurance

• Life Insurance

• Disability Income Protection

• Retirement Benefits

• Long Term Care

Supplemental

• Gap/Hospital Indemnity

• Accident

• Critical Illness

• Voluntary Disability

• Voluntary Term and/or Permanent Life Insurance

• Non-insurance Benefits (identity theft, legal, pet, etc.)

State of the Market

Employer Perspective

• 45% of employers view voluntary benefits as an essential part of an integrated health benefits package, rather than just an add-on

• 58% of employers believe voluntary benefit improve employee morale and satisfaction

• 60% of employers use voluntary benefits to replace employer paid benefits and reduce costs

45%

58%

60%

0% 20% 40% 60% 80%

Essential Part of Benefits

Package

Improve Morale

Replace Employer-Paid

Benefits

Source: MetLife Study 2014 and LIMRA Study 2011

State of the Market

Employee Perspective

• 46% of employees say they are not prepared to pay out-of-pocket expenses not covered by major medical insurance

• 51% of employees say they have less than $1,000 available

• 62% of all personal bankruptcies filed in the United States are caused by medical problems

• 78% of all personal bankruptcies filed due to medical problems, those filers had medical insurance at the start of their illness/injury

46%

51%

62%

78%

0% 20% 40% 60% 80% 100%

Not Prepared to Pay Out-

of-Pocket Expenses

Less than $1,000 Available

Personal Bankruptcies Filed

due to Medical Problems

Personal Bankruptcies Filed

with Medical Insurance at

the Start of Injury/Illness

Source: Aflac in 2012 and Harvard Business Study in 2009

Gap/Hospital Indemnity

• Employee risk from deductible and co-insurance

• Types of expenses – hospital, surgical, diagnostic, ER

• Family deductible vs. individual deductible

• HSA vs. HRA

• Cannot cover all of the out-of-pocket expenses, but an acceptable amount

Accident Plans

• 24 hour plan vs off the job only plan

• Effect on workers comp claims

• Wellness benefit – costs and use

• Average accident costs $4,000 out-of-pocket

• Dual options – worth it?

• Price vs. Benefits ($4/wk vs. $6/wk)

Critical Illness Plans

• Guaranteed Issue

• Open enrollment

• Pre-Existing Conditions

• Benefits reduce 50% at age 70?

• Spouse benefits can be half of employee amount

• Participation Requirements

Life Insurance

• Voluntary Term with Permanent (Universal Life or Whole Life) – should always be together

• Lifetime employee benefit

• Life insurance planning and advise

• Adding Universal Life or Whole Life with Long Term Care rider

• Guarantee Issue or CGI

Disability Insurance

• Group vs. Individual

• Monthly STD claims vs. Weekly STD claims

• Incremental benefits vs. flat percentage, typically 60%, a benefit for older employees or dual income employees?

• Dual offers on both STD & LTD (elimination period for STD and benefit period for LTD)

Communication & Enrollment Strategies

• Methods: • Face-to-face, call center, online

• Combination

• Messaging: • Customized

• Clear

• Communicated during enrollment

• Participation requirements vs. acknowledgment requirements

• Open to new hires or just once per year? GI?

• Can voluntary benefits easily be a part of the core platform?

• Single sign on or imbedded in the system?

• Underwriting/EOI within the system or separate process

• Anniversary with core benefits or separate , or both?

• Is the system open throughout the year or just at open enrollment?

Benefit Administration System

Choosing the Right Plans

Current Plans - Designs and

Goals

Group demographics and locations

Plan pricing and

underwriting

Prior experiences

Communication and Enrollment

Strategy

Administration – enrollment and billing

Questions? If you have any further questions about the information discussed in this webinar,

please feel free to contact us at:

Crawford Advisors, LLC

HQ: 200 International Circle | Suite 4500| Hunt Valley, MD 21031

1813 Sweetbay Drive | Suite 10 | Salisbury, MD 21804

201 King of Prussia Road | Suite 650 | Radnor, PA 19087

280 Granite Run Drive | Suite 250 | Lancaster, PA 17601

2975 W. Executive Parkway, Lehi, UT 84043

(800) 451-8519 | www.crawfordadvisors.com

Stephen Ivey, Director Voluntary Benefits – SIvey@crawfordadvisors.com

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