Ware provided his career as evidence.

After spending more than two decades rising through the ranks of one of the largest voluntary providers around and ultimately overseeing sales and distribution for the entire state of California, he retired when he was relatively young

“I knew I would go back in some capacity, but wasn’t sure in what way,” said Ware.

About seven years ago, that way revealed itself when the principal of a successful independent insurance agency with a healthy book of major medical group business approached him. They needed help developing their voluntary, ancillary and supplemental lines of business.

And it was there that Ware’s next venture was born.

The Ware Group, a Champaign, Ill.-based independent brokerage that specializes in voluntary, ancillary and supplemental insurance products delivered through the worksite, now services more than 500 group accounts, which range in size from five to 6,000 lives.

In one sense, brokers were right in their original view of the voluntary market. It is labor and investment-intensive, said Ware. But “there is so much money to be made in the voluntary market.”

The “perfect storm” of the Affordable Care Act and consumers’ mounting out-of-pocket health care costs have forced group health brokers to reexamine the value proposition of the voluntary market, not only for consumers and sponsors, but also for their agencies.

“Brokers know they can’t ignore the voluntary market,” said Ware. “They want to do this. But the question is, ‘Can they?’ ”

Strategic partnerships

The Ware Group’s success has been built on its partnerships with group brokers.

When sponsors choose to partner with his team, they are not picking a specific carrier or a specific voluntary suite of products; they are selecting a provider of turnkey voluntary solutions and services.

That involves far more than simply placing a voluntary agent alongside a group broker during enrollment season, said Ware.

“With voluntary products, it is absolutely essential for brokers to get out of the mindset that you are selling a product to make money, and transition to a mindset that asks what makes sense for employers, what makes sense for participants, and what are the most responsible products to offer,” he explained.

Failure is all but guaranteed if voluntary brokers can’t simplify life for internal human resource teams. While the voluntary pitch can be attractive to sponsors, who often don’t carry contribution costs, enrollment can be time- and labor-consuming.

Mitigating that reality is the voluntary specialist’s first job.

“The key is to reduce the work for employers and HR specialists so they can focus on their core responsibilities,” said Ware.

To do that, Ware employs a sales team, a separate enrollment and implementation team, and another back-office entity that gives participants a human touch point when claims arise.

In all cases, Ware said, he relies on seasoned voluntary pros. For the sales force, it’s essential to understand the nuances and variances between policies from different providers. From there, the sales force coordinates with the group broker partner to fully understand major medical coverage.

The latter is the only way to ensure they’re presenting participants with the most responsible suite of voluntary offerings. Ware uses the example of accident policies. Most of those policies are sold as “24-hour coverage” — meaning workers have protection both on and off the job.

But that can be unnecessary compared with off-the-job-only protection, as existing property and casualty and workers’ comp coverage usually covers workers adequately while they are on the job.

Ware said most of the accident policies his group markets are off-site-only policies. That means employees are not at risk of buying redundant coverage, which reduces their costs and ultimately encourages more participation in accident policies.

Keep accounts fresh

Upon enrolling a group, Ware’s team leaves the technology to the sponsors, which is to say that HR teams have the technological capability — at no new cost — to address ongoing enrollment needs.

Beyond that, Ware deploys a separate sales force to follow up with employers, creating on-site touch points for participants after open enrollment and throughout the subsequent year. That approach allows employers to stay on top of the needs of new hires and address portability questions when workers leave.

By being physically present, Ware said his team limits the labor for internal HR departments and creates new opportunities to add lives to voluntary lines.

“You have to keep accounts fresh by maintaining a high number of touch points with sponsors and enrollees,” said Ware, who added that his agency earns a substantial amount of sales revenue from followup after open enrollment.

But more importantly, said Ware, is the activity after open enrollment, which in turn limits carriers’ adverse selection risk. That results in more favorable price points on voluntary policies.

“Because we get deeper penetration we run into less adverse selection,” he said. “Carriers love that, and it’s why we can get guaranteed issue policies for groups with as few as two enrollees. Carriers want to work with us because we offer a full-service enrollment capability.”

In the end, having a full-service capability makes groups with fewer than 50 lives more attractive to voluntary carriers, who have historically strayed from small groups to avoid higher adverse selection risk.

No 1-800 numbers

For all the Ware Group invests in implementation and follow-up services, the agency’s back office customer service department yields the most references from policyholders.

“The value in getting workers answers to their questions without putting them through the call center wringer has proven to be a revenue generator for us,” said Ware.

His bottom line: To make money in the voluntary market, one has to spend money.

Some brokers can do both core medical and voluntary, he said, but many are happy to have a voluntary partner with turnkey capabilities.

“We can split 50 percent of eligible compensation with the major medical broker and still make money. And of course they are adding to their revenue stream without making any investment,” said Ware.

“It’s a smart move for a lot of brokers, and it makes for a good marriage,” he added.