Why are voluntary products such a logical next step? In addition to providing an opportunity to augment broker income, voluntary benefits are growing increasingly popular with employers.  A robust voluntary offering enhances employers' ability to retain and attract employees. This is especially true now with the many different types of employees — age, gender, lifestyle, life stage, nationality — in today's workplace.

According to MetLife's 2013 Study of Employee Benefits Trends, "68 percent of surveyed employees agree voluntary supplemental benefits are important for helping manage their health care costs."

How are brokers responding to this growing opportunity?

Many brokers are reticent to embrace voluntary benefits because the total commissions on voluntary benefits are much less than the total commissions on core benefits.

For example, the commissions on core benefits (medical, dental, vision, life, disability) for a 100-employee company could be as much as 10 times the commissions for voluntary benefits.

However, if a broker can sell more policies to a higher percentage of employees and do so in less time, the cost/benefit ratio shifts and voluntary benefits begin to look attractive. And, if carrier margins on medical plans start to fall and broker commissions are squeezed, we'll certainly see brokers embracing voluntary products.

Also read: Are brokers really leaving the industry in droves?

What does this voluntary focus require of brokers?

There are a significant number of surveys showing that employees are more responsive to — and have a higher degree of confidence in — voluntary products offered through their employers than through direct solicitation. There's a sense that some due diligence has been done by the employer so employees have more trust in employer-offered voluntary benefits. Benefits brokers can make the process of offering voluntary benefits easier for employers so they definitely have a role.

Unfortunately, the process, as it works right now, has risk for the broker because it's difficult to get people to sign up and if the broker isn't able to capture a large enough group, all his work can be for naught; no sign-ups, no commission.

So how can brokers make a voluntary effort worthwhile?

Brokers need to find ways to get in front of employees that are non-invasive and cost-effective — especially if they're attempting to work with employers with a dispersed workforce. Sitting with a live person, especially if they're perceived as pushy, doesn't work. Nor does it work from the perspective of timing; how can employees focus on making decisions about supplemental benefits for themselves and their families — which takes time and attention — in the middle of their work day?

Off-work, in-home meetings are perceived as invasive. Many carriers have online enrollment systems that let employees go directly to a website and sign up. While online enrollment systems address some of these issues, they have not proven effective for voluntary products; the adoption rate is very low — sometimes less than 5 percent. Some online enrollment systems have call support that enables employees to speak with a human being toll-free, but most don't.

So the question becomes how to provide cost-effective, high-touch — but not pushy — benefit education, advice and enrollment support that makes offering voluntary products a positive experience for employers and employees, and worthwhile for brokers. 

While technology was applied to enrollment some time ago and has greatly eased the process — pre-populated choices, electronic distribution — it hasn't, until relatively recently, been applied to helping employees with how they select benefits, which is critical for voluntary offerings. Fortunately, there is a group of technology-enabled services now available that accomplish this.

What are these services?

These are decision support tools. DST is the acronym for a group of interactive computer solutions designed to assist with education and decision-making. The goal of these solutions is to make it easier, specifically, to make discretionary decisions — those requiring education, advice and the exercise of judgment.

Interactivity and the ability to present information in a manner helpful to making an informed decision efficiently are essential elements of a worthwhile DST. Those being used in the voluntary products space were created to replicate the human experience without the time, cost, invasiveness and threat of human contact. 

By the way, I don't think name "decision-support tool" quite cuts it; it's not robust enough. 

Is there some advice you can offer brokers about how to evaluate a DST for voluntary products? 

I would want to get answers to the following:

Does the DST allow employees to learn and interact at their own pace or is it a "forced work through"?  

Does the solution provide an interactive and engaging experience?  

How many steps from start to decision are required?

Is the solution for open enrollments only or can it be "left behind" for perpetual new hire enrollments as well?

How does the DST replicate the experience of a one-on-one meeting with a professional insurance consultant?

Does it provide relevant information to an employee based on their demographics or is it a one size fits all data delivery?

Does the DST integrate with existing enrollment systems to easily share employee data and avoid data re-entry?

How easily can the DST be integrated with the client's online enrollment system?

Is all necessary information made easily available; e.g., when users go backward in the process, do they lose their place and have to start again?  (If the information about the product is available throughout the process the conversion rate is substantially higher.)

What is the typical employer size the DST can cost-effectively serve?

If the employer makes a plan or system change in subsequent years, must the solution be re-produced—or just re-configured?  Are there fees associated with this?

As the DST provider improves their product, is the employer required to pay for an upgrade or is it automatically included?

Is the solution configured specifically to the employer's plans or does it provide only a general overview?

Do you have any additional thoughts to share?

[PPACA] is providing employers with an opportunity to reset their entire benefits program. While health care reform will hit every business differently — depending on their workforce and labor costs — all are looking for more cost-effective ways to manage their benefits. This can be seen in the move to defined contributions and consumer-driven health plans.

Brokers are uniquely positioned to help employers be successful with whatever change they're considering from both a strategic and tactical perspective. This makes it the perfect time for brokers to get on board with voluntary products.

Employees want them. Employers want them — and employers are now in change mode, which makes it easier to incorporate them. And, with the capability of a good decision-support tool to solve for the hurdles of education and decision support, brokers need no longer resist this surefire way to increase their income stream.

Also read: 5 most popular voluntary benefits