Informed Choices    Voluntary products education initiatives benefit the buyer, broker & insurer Imagine grocery shopping with a store marketing representative following behind your shopping cart, explaining every product. Or think about trying to pick out new clothes while trying them on in a small group-while being lectured on new styles. Voluntary benefits-personal insurance products sold at the worksite and paid by payroll deduction-are becoming increasingly popular with employers and many employees. But the way employees choose and enroll in voluntary benefits can be complicated and difficult for some employees. And, as a result, profitability growth could be stalling. Voluntary benefit insurers usually provide communications materials and help for agents and brokers who conduct open enrollment. But effectiveness varies. Some employers allow agents to conduct small group meetings during which employees make their choices. Others conduct one-to-one counseling and record choices during or after the meetings. Some ask employees to enter their own choices in online enrollment systems. However, none of the techniques is perfect, industry leaders say, and improvements would help boost voluntary business growth. Recent insurance industry research indicates that employers are choosing to offer more voluntary benefits-primarily to replace employer-paid group benefits. According to the 2011 LIMRA report, "Voluntary Benefits Penetration and Market Potential," about 57% of U.S. employers offer voluntary benefits and about 20% of U.S. employers are considering adding a new voluntary option within the next two years. LIMRA is an industry research organization based in Windsor, Connecticut, that represents more than 850 insurance and financial service companies in 73 countries. Click here for the complete article …

VARIETY IN VOLUNTARY    Carriers, large and small, offer a range of worksite solutions Voluntary benefits business continues to grow, fueled in large part by tightened employer budgets. It's a competitive market, but one with room for a diverse field of carriers, featuring a variety of products and niche strategies. "What makes the voluntary market so exciting is the speed at which it changes," says Steve Hannah, regional vice president of group insurance sales for Mutual of Omaha. "Growth in our voluntary business has more than doubled over the past five years." Short-term disability has grown the fastest," he says-up 500% over those five years. Although this kind of growth obviously proves the appeal that voluntary products can have with employees, it doesn't mean that the broker's role in selling voluntary products will be a piece of cake. Many benefits plan participants remain shell shocked by the assaults on the two pillars of their traditional benefits program: their employer-paid health plan-hit by increased costs for participants, and their defined contribution retirement plan-battered by wildly unpredictable market forces. As they digest these unsettling changes, employees may feel overwhelmed when they are presented with the choices that come with products they will be paying for. HR directors, for their part, may need to be coaxed out from the bunker mentality that they've developed as a result of employer belt tightening. The need for effective communication between the broker and HR executives, and between the broker and plan participants has never been greater. Click here for the complete article …

VOLUNTARY BENEFITS: Into The Mainstream    Studies identify changes in employee attitudes; opportunities for brokers in competitive market Historically, one of the primary purposes of employee benefits has been to recruit, retain and reward employees. However, the recession and the resulting difficult employment market have changed the traditional role of this powerful HR tool. Because of the problems in the economy as well as the rapidly escalating costs of traditional benefit programs, employers are being forced to pass more of those costs on to employees. Whether it is through increased deductibles and co-pays, higher premiums, reduced limits, or some combination of all of them, employees are now shouldering more of the financial burden of traditional benefit programs. In many cases, this is, causing a change in the overall value of these benefits in the minds of some employees. Consequently, employers are struggling to find ways of providing benefits that will not add to their costs. Many of these employers think that voluntary benefits may hold the key. As a result, in some cases, the "traditional benefit package" is beginning to evolve into a comprehensive suite of benefits that includes those that can be provided at little or no cost to employers and still deliver high value to employees. So, while voluntary benefits are nothing new, today they are becoming a staple in many companies' HR arsenals. Employee observations Eastbridge Consulting Group, Inc., a consulting group specializing in worksite benefits, has completed several surveys that should be of interest to anyone involved in the employee benefit arena. One of the first and most important findings from its surveys is that employees still look to their employers for the lion's share of their insurance protection. Click here for the complete article … Stop Loss Health Coverage Protects Self-Insureds    Self-insuring health risks expands to smaller firms In 2010, Middletown, Connecticut, a city of some 43,000 residents, faced the prospect of a 20%+ health insurance renewal rate increase, along with other economic challenges. City leaders explored alternatives, including negotiating with the incumbent insurer and with city unions, but none of the options provided sufficient savings, according to a news release issued by the city's mayor. So Middletown leaders decided to switch from fully insuring the city's medical program to self-funding it. The move, coupled with certain other plan design changes and a higher employee contribution rate, led to what the mayor describes as a first-year savings to city taxpayers of more than $800,000. Middletown is not alone in self-funding its health care costs. According to The Kaiser Family Foundation 2009 Employer Health Benefits study, 57% of covered American workers were enrolled in some sort of partially or fully self-insured health plan. Employers who self-insure bear some or all of the risk for paying claims. They generally tap third-party administrators (TPAs) to administer the plans and often purchase what's called stop loss coverage to protect against unusually large payouts. A brief prepared in December 2010 by The George Washington University's National Health Policy Forum says, "In 2014 and beyond, smaller employers with relatively healthy workers that have low medical costs may find it financially advantageous" to self-fund their health plans. The shift-and suggested timing-relate to changes called for in the Patient Protection and Affordable Care Act (PPACA) that Congress passed in 2010. Click here for the complete article …  Click here to unsubscribe This message was sent by The Rough Notes Company, Inc., 11690 Technology Drive, Carmel, Indiana, 46032 1-800-428-4384