A few days ago, as I was talking with one of the employee benefit brokers we work with, she commented that the benefits business has changed radically in the past few years. Think about it, she observed: When I started in the business we didn’t have PPACA to deal with, we didn’t communicate via texting, cell phones were a luxury and there was a very limited choice of voluntary products. She concluded, “My business is completely different today.”
That got me thinking about my focus on the voluntary business over almost 30 years. Do I think the business has changed completely over that time? Has the value of past experience been overshadowed by the issues and technologies of the present?
The more I considered this question, the more it seemed to me that the fundamentals of the voluntary business have changed surprisingly little over the past 30 years. What are these fundamentals? Consider employers. The idea that employers want to provide expanded benefits at little or no added cost has been around since the 1980s. Those who began selling voluntary benefits in this era of HR-IS services will be interested to know that by the mid-1980s, Section 125 services were routinely packaged with products, as were benefit statements revealing the hidden paycheck represented by benefits.
Products? In those days, most sales emphasis was on permanent and term life products but there were also disability income protection plans, hospital indemnity plans, cancer/dread disease products and others. Today’s product portfolio of insured products shows evolution and fine-tuning, for example, of hospital indemnity into “mini-med” or cancer/dread disease products into today’s critical illness plans.
Employee enrollment? While today we use systems and technology to promote enrollment opportunities for employees, enrollment in the 1980s took every bit as much planning and communications support as it does today.
The tools are more sophisticated, but the techniques and basic tactics are the same: Employees need to be convinced how important it is to consider their personal and family financial security and want to be educated on available answers to these needs. Also in the world of enrollment, we still struggle to convince employees to purchase voluntary products in competition with everyday expenses. In the 1980s we would say “this policy costs about the same per week as a pack of cigarettes.” Today, we compare costs with a gallon of gas. Finally, making employee enrollment as simple as possible continues to be essential.
What has changed most is distribution. Today, voluntary plans are sold by a wide variety of carriers and many types of distributors to employers of all kinds across the country. In the 1980s, distribution tended to be much more a specialists’ game, centered on enrollment companies and agents who sold for companies branded as “salary savings” or “payroll deduction” carriers. And, geographically, a preponderance of distributors and carriers in the 1980s were in the southeast, where employers did not offer as broad a range of paid benefits.
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