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Big Voluntary Opportunity In Small Business Market

If you are a health insurance advisor considering the voluntary workplace benefits market but thought that your clients might be too small to qualify, it might be time to take another look.

“Every single workplace is a potential customer,” said Jennifer DeProspo, regional director of development with Wexford, Pa.-based BOST Workplace Benefits. “How do you make the leap? You start small.”

As more companies seek a piece of the workplace market, they are making it easier for smaller sized workplaces to qualify for benefits, DeProspo said. “Workplaces with as few as two or three employees can qualify, depending on the company providing the products. This is a great market to begin going after because many times these small workplaces think they can’t qualify for coverage.”

Faced with decreasing commission revenue from health insurance premiums, many health insurance advisors are finding that adding voluntary workplace benefits to their product offerings can help offset the loss of health insurance commissions.

“Adding workplace benefits to your practice is a great way to increase your revenue and secure more business,” DeProspo says. “If you’re not doing it, someone else will.”

The workplace benefits market offers new opportunities not just for more revenue but also for better client service.

“The more lines of business you have in a company, the greater your retention rate,” DeProspo said as one reason why workplace benefits offer a reliable source of income. “The more lines you have to offer, the more your clients will look at you as a one-stop shop.”

Diversification into workplace benefits is not only for health insurance advisors, DeProspo said, with more traditional life and disability insurance carriers also diversifying into this market.

“With health care reform, what employees are seeing are increased deductibles and co-pays, making (workplace benefits) more attractive,” she added.

“The voluntary workplace market is being flooded with new products on a regular basis. We also are seeing health insurance carriers offering voluntary dental and vision benefits. Health insurance advisors who are sticking with traditional health products are missing out on a great opportunity to offer these products to employees who have a need for them.”

Voluntary workplace benefits include:

  • Accident coverage, which can pay benefits to employees who are injured on or off the job.
  • Critical illness coverage, which pays a lump sum to employees who are stricken with a major event such as cancer or a heart attack.
  • Medical “bridge” or “gap” plans, which provide coverage to help employees pay higher deductibles on their health insurance.
  • Hospital plans, which pay cash to employees who are hospitalized for a specified period of time.
  • Cancer coverage, paying benefits to employees undergoing cancer treatment.
  • Dental and vision plans.
  • 24-hour telephone access to physicians, nurses or other medical personnel when illness strikes and clients need ad-vice on whether to go to the emergency room, for example.
  • Pet insurance, helping employees pay veterinary expenses.
  • Legal services such as will preparation.
  • Short-term and long-term disability insurance.
  • Health and wellness programs.

With more products becoming available to more workplaces, DeProspo said they are two types of groups that advisors should seek out in offering workplace benefits – those who don’t have benefits and those who do.

“The biggest thing the advisor has to do is ask,” she said. “If (the group) doesn’t have (benefits), ask why not. If they do have them, ask the business owner or HR manager if they have shopped it out lately.”

It is relatively easy for a health insurance advisor to expand into workplace benefits, DeProspo said, because most benefits companies have resources that can help. “It’s easy to position yourself as a consultant,” she said. “The resources are out there.”

The time and effort needed to conduct the employee enrollment may be a challenge faced in working with this market. For example, a workplace with three shifts of employees may need to have enrollment meetings conducted throughout the day to serve the day-shift workers and after midnight to meet the needs of the late shift workers. DeProspo suggested that health insurance advisors establish a relationship with an enrollment company. “The enrollment company can find someone local who can help you enroll the employees while you concentrate on your book of business,” she said.

The health insurance advisor also can expand that partnership relationship by partnering with a financial advisor who also can cross-sell 401(k)s and discuss retirement savings options with employees, DeProspo said.

“Don’t be afraid of partnerships and don’t try to be a jack-of-all-trades,” she said. “Partner with someone and be looked at as a one-stop shop.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Follow her on Twitter @INNsusan. Contact her at [email protected].

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