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Worksite and Enrollment Technology

The Changing Landscape of Voluntary Benefits

Presented by Hunter Whittington,BenTec Division President

Benefits Technologies – Who We Are

• We are one of the largest and fastest growing Benefit Enrollment Solutions Specialists in the country, with over 150 full time professionals. We operate from 14 Divisional Offices around the country, (Boca Raton, FL), with corporate headquarters located in Tulsa, Oklahoma.

• We service over 2,000 active client groups each year across the nation, who collectively employ over 1.5 million people.

• Significant infrastructure investments have been made to maintain two separate Call Center facilities with a combined 100+ available seats. This helps foster the growth of multi-media enrollment and customer service solutions such as perpetual enrollments.

• Our target industries include: healthcare, public sector, transportation, energy, manufacturing, professional service, retail, and banking among others.

• We specialize in the integration of traditional communications and enrollment techniques with modern technology solutions.

12% 12% of employers are considering reducing the coverage levels of benefits offered. That translates into 1 out of every 8 employers in the marketplace.

33% 33% of employees expressed concern that their company intends to cut or reduce benefits in next 12 months due to the economy.

41% 41% of employees consider workplace benefits to be their financial foundation.

The 2009 MetLife Study of the American Dream, MetLife, 2009.

Market Trends

Industry Statistics

46% 46% of Employees have expressed greater interest in learning more information about the benefits offered through their company.

Yet, only 13% 13% of Employers suggest that this is a priority for them.

63% 63% of Employees are interested in speaking with or working with a benefits advisor or counselor.

40% 40% of Employees are highly interested in a broader selection of voluntary benefits

The 2009 MetLife Study of the American Dream, MetLife, 2009.

Market Trends

Industry Statistics

The Growing Importance of the Workplace

Importance of workplace as

source for personal

insurance and savings

products percentage of

plan participants

Gauging The Success Of Voluntary Benefits

PERCENTAGE OF PLAN SPONSORS OFFERING VOLUNTARY BENEFITS 2008 VS. 2011

Prudential 2011

Current Voluntary Benefit Product Offerings

Prudential 2011

Brokers/Consultants

Offer/is offered at least 1 + voluntary benefit

96%

Life Insurance 63%

Disability Insurance 56%

Dental Insurance 52%

Accident Insurance 43%

Critical Illness Insurance 35%

Long Term Care Insurance 33%

Percentage of plan sponsors who offer one or more voluntary benefits

Prudential 2011

Top Advantages of Offering Voluntary Benefits

% of Plan Sponsors

Your company is able to provide some benefits at a lower cost than what employees could purchase outside the workplace

73%

Voluntary benefits help to maintain the competitiveness of your benefits program while adding little/no cost to your company

51%

Voluntary benefits are more convenient for your employees (to access and buy via payroll deduction)

48%

Guaranteed issue (no evidence of insurability, medical exams, etc.) 39%

Employer endorsement (your company has done the research, shopping, and made the decision for your employees)

25%

Higher quality service because of your company’s relationship/influence with the provider

25%

There are no advantages to voluntary benefits 4%

Top 3 Advantages Of Offering Voluntary Benefits

Prudential 2011

2008 vs. 2011

2008* 2011** Change

Voluntary benefits often cost less than if you purchase the same benefits outside the workplace

39% 49% +10

Voluntary benefits offered by your company give you access to a wider range of useful benefits than you might otherwise have available

33% 47% +14

I don’t know enough to say 27% 13% -14

*2008 base: Percentage of all plan participants**2011 base: Percentage of plan participants whose employer currently offers one or more voluntary benefit

Perception is Reality

Those with above average

healthcare benefits

Those with below average

healthcare benefits

With effective benefit

communication

83.6% 76.2%

Without effective benefit communication

25.7% 22.1%

Perception is RealityPercentage of employees responding favorably to their benefit package: 1

1 Watson Wyatt Worldwide. “WorkUSA Study: Effective Employees Drive Financial Results

Misperception is one of the many challenges concerning employee benefit programs facing employers today. Additional challenges can be one or a combination of any of the following:

• rising costs – shifting expense burden to employees

• lack of appreciation for benefits offered and underlying company funding

• lack of participation •Consumer Driven Healthcare Programs, HSA, HRA•Flexible Spending Accounts (FSA)•Voluntary benefits

• inaccurate data•dependent information•address information•beneficiary information•incomplete paper enrollment forms

• time consuming data entry

Benefit Managemen

t

Challenges

Albert Einstein’sDefinition of Insanity:

“Continuing to do the same thing over and over and expecting a

different result.”

Brokers and Consultants – Barriers to Voluntary??Brokers and Consultants – Barriers to Voluntary??

Given the challenges that Consultants face today dealing with their clients, an enrollment firm could be a perfect partner….. We are but there are challenges …..

Broker/Consultant Mentality

• historically core benefit focused

• belief – many consultants don’t buy into it. Don’t want us diluting the value of benefits - Reality: Healthcare Reform threatens Brokers livelihood - Reality: Health Insurance covers everything medically but not everything financially

• spreadsheets are needed - decisions are made based on contractual provisions - VB products are not mirrors of each other

• pricing models - voluntary benefits are a poor value – for right or wrong

• don’t like heaped commissions – many consultants like levelized commissions. Need predictable revenue. The way they are

compensated doesn’t fit into the traditional VB model.

• voluntary benefit counselors push too much product on employees

• billing and administration not worth the headaches – it jeopardizes my client

Brokers and Consultants – What are their Challenges?

• diminishing revenues from traditional product channels

• product and price driven decisions dictate terms

• it’s a spreadsheet world

• constant threat of competition

• limited ability to communicate messaging except through group meetings

• the constant need to bring “value” to their services to differentiate themselves

Issues We all Deal With

The Pain Points:

EMPLOYEE EDUCATIONDo the employees of your clients understand…

•their benefit options?

•the underlying costs of the programs?

•The new high deductible health plan (HDHP) that was implemented?

Are the employees of your clients utilizing…

•the features of the wellness programs?

•efficient prescription plan usage?

•the emergency room, as opposed to a doctor’s office or urgent care?

Get into their Heads

Talk

Their

Language

Employee EnrollmentEmployee Enrollment

Do your clients have….• a geographically challenging population?

• outdated or missing employee data?

• a self service enrollment system with low utilization?

Do your clients still…• enroll their benefits on paper?

• manually key in employee elections?

• pay for communication services?

AdministrationAdministration

Are your clients….• paying for ineligible dependents on the benefit plans?

• bogged down with ongoing plan administration?

• having difficulty with new hire processing?

Hooks and DriversHooks and Drivers

In many cases, voluntary benefits can be positioned to provide your clients with the most cost effective solution to their communication, education, enrollment and administration needs.

What Do We Use to Drive Enrollments and What Do We Use to Drive Enrollments and

Employee AccessEmployee Access•Core Benefit Enrollment (electronic)•Confirmation Statements•Dependent Audits•Wellness Campaigns•Employee Surveys•Beneficiary Updates•Hidden Paychecks•Benefit Guides (customized)•Benefit Administration solutions

The Power of OPTIONS

Local Service Partner with an enrollment firm that is located in your regional market!

What are some differentiators to look for??

Random Thoughts

on

Consultantsand

Brokers

Many Consultants and Brokers are not commission driven:

Many fee-based Consultants and Brokers will not want

commissions to show on a Schedule A. The solutions is to offer the additional services that t he commissions will fund.

What is new in the VB world that can get the attention of the Consultants and Brokers?

More products are moving towards a group-based chassis.

Single rate structure, single plan design, single brochures. Underwriting is becoming more streamlined – ease of enrollment, less reject rate which means fewer billing discrepancies. Also DISCOUNTS ON CORE PRODUCT RENEWALS FOR PUTTING IN THE VOLUNTARY PLANS!

How can VB help the Broker/Consultant drive core participation?

Transitional products like Hospital Indemnity/Gap, Accident,

Critical Illness plans help bridge gaps for higher deductible and high out-of-pocket plans. Employees are more willing to elect those programs if VB pays for some base services.

How do you tackle dependent audits?

VB funds the Dependent Audit process. Employees don’t feel

as threatened when a third party enrollment firm conducts the audit. Employer is not as negatively connected to the process.

What about wellness programs?

There is a huge drive for wellness programs, but difficult to

effectively communicate and engage the employee. Enrollment firms are the perfect partner.

Automotive Manufacturing Case StudyNumber of Employees: 277Locations: Western Michigan Scope of Project: Enrollment of the Core and Voluntary Products and Verify Dependents.

•Enrolled all associates in their core products using the client’s proprietary enrollment system•Verified dependent status on all associates•Interviewed over 77% of entire population•43% of all associates participated in the voluntary program•$48,000+ in premium sold

Metal Forming, Decorating & Coating Case StudyNumber of Employees: 700Locations: 3 States; 7 FacilitiesScope of Project: Core Enrollment with Voluntary Benefits

•Assisted all ee’s with the communication and enrollment into a new HDHP•Health premiums were going up 20% from last year•Collected Tobacco Free Certification forms•24 hour shifts at all 7 facilities•Over 95% of all ee’s met with a benefit counselor•62% elected one or more benefits•$148,000 in premium sold

Health System Case StudyNumber of Employees: 2,082Locations: West Michigan Scope of Project: Core Benefit Enrollment

•Core Enrolment with in depth explanation of new benefits platform•24/7 shift requirements – 15 benefit counselors deployed for 3 weeks•Met with 92% of eligible population•Exceeded GI on all Voluntary products•Wrote over $734,000 in VB premium

Plastic and Rubber Case StudyNumber of Employees: 2,200Locations: 13 main locations within the Midwest. Scope of Project: To offer the employees the option of purchasing additional voluntary insurance to supplement the benefits the client was removing. Also, there was an urgent need to generate participation into the high deductible plan.

•Core communication and enrollment for client that had never had 1x1’s and had never offered voluntary products to their ee’s previously•Used our on line scheduler for all the satellite locations•Met with 97% of all eligible employees•Participation exceeded 50% in the voluntary plans•Increase participation in “EVERY benefit by at least “double digits”•Wrote over $500,000 in VB premium

Hospital Case StudyNumber of Employees: 3,300Locations: 18 separate locations across Mid-Southern MichiganScope of Project: To provide every staff member with a hands-on, educational enrollment experience with a newly implemented benefit administration system.

•Assisted with the implementation of new Ben Admin system•Helped educate and facilitate the enrollment into this system•Client would not mandate meeting, thus “highly encouraged” every staff member to take advantage of the on site 1 x 1’s•Met with over 85% of all eligible staff members•Helped negotiate a $100,000 fee offset for client on their benefit administration system•Over 50% of all staff member participated in voluntary plans•Wrote over $780,000 in total voluntary premium

Web Demo, illustrating one of the many platforms that we work with: Common Benefits

Web Demo includes:

•Benefit Administration•Core Enrollment, &

•Self Serve capabilities

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Thank you