Worksite Marketing (WM) is not simply the sale of group voluntary benefits or ancillary benefits to a specific captive group.
WM reflects the fact that the products are being sold to individuals at their place of employment, rather than in their home.
Today, companies are thinking more creatively and strategically about how to design benefit programs that are both within cost constraints and attractive to employees.
Many are turning to Voluntary Benefits and Services (VBS) to help achieve this goal- creating an emphasis for effective, engaging and proactive WM strategies.
Why is WM on the rise?
VBS is gaining importance for companies' employee value propositions (EVPs).
- Carriers are seeking new and enhanced revenue streams as Group product revenue levels remain flat. A recent Eastbridge study noted there is an estimated $26 billion of annualized premium in-force (2012), up from $15-$20 billion in 2007.
- Healthcare Reform (PPACA) and state exchanges are changing the way employees obtain and evaluate healthcare benefits.
Employers are turning to voluntary benefits and services to personalize their benefit offerings and support their employee benefits strategy.
10,000 Baby Boomers will reach retirement age every day for the next decaded - an opportunity for employees to obtain appropriate levels of life insurance.
- Gen Y consumers are seeking greater choice, flexibility and portability of benefits.
An increase in competition among carriers and other insurers to enter the WM space before it becomes saturated is growing year over year.
- The Carrier name is still growing in importance for brokers, employers, and employees. Employers see carriers as playing a key role in helping providing year-round benefits education for their employees.
- Brokers believe employees will spend more on healthcare benefits, while at the same time employers will add voluntary coverage.
- Over the next five years, brokers see the biggest help in increasing voluntary sales is that employees will have more choices than in the past. The biggest detriment over the next five years is that employees may not fully recognize their own financial needs.
- Employees see increasing value in voluntary benefits and would allocate over half of their benefit dollars to health insurance.
Why WM Matters
WM plans - which are packages of benefits that the broker and employer have developed to be offered to their employees - may vary greatly from one company to the next.
The plans may include both traditional group benefits as well as individual products.
Regardless of the benefits that are chosen by the organization for a WM plan, the distinguishing attributes of WM benefits are that they are written for, sold to and owned by the individual employee, rather than the employer.
One other important aspect of WM benefits, which distinguish them from group voluntary benefits, is the fact that, while they may be paid via payroll deductions, they are portable and “travel” with the individual policyholder if they have a change of employment.
The benefits that are being packaged and sold in WM plans are traditionally the domain of life insurance carriers, but competition is also coming from healthcare providers in the form of voluntary and ancillary group benefits.
WM’s overall goal is to drive increases in supplemental and voluntary revenue from existing and new, takeover and virgin business, customers. WM representatives actively consult with multiple stakeholders to develop, build, and implement a customized enrollment campaign based on the employer’s enrollment goals, demographics, and plan offerings.
According to Towers Watson’s 2013 Voluntary Benefits and Services Survey results, the voluntary benefits listed below are becoming more popular. Towers Watson’s survey results shed light on how employers develop voluntary benefit strategy and design the VBS product portfolio.
The responses of more than 320 U.S. companies ranging from 540 to 345,000 employees confirm a growing interest in and focus on voluntary benefits. The findings also reveal the role of VBS in a post-reform world, emerging products and relevance for workforce segments. Popular voluntary benefits currently include:
- Critical-illness insurance: Giving employees a lump-sum payout in the event of certain critical illnesses such as a stroke or heart attack
- Identity theft insurance: Covering the cost of certain expenses in the event that someone wrongfully obtains and uses an employee’s personal data
- Financial counseling services: Taking the form of one-on-one counseling with a certified financial professional or occasional seminars
- Pet insurance: Covering the cost of some injuries and illnesses to cats, dogs, and in some cases exotic pets
- Long-term-care coverage: Reimbursing for long-term-care costs that generally are not covered by health insurance, Medicare or Medicaid.
A Fresh Look
According to Towers Watson, amid a fragile economy, tight benefit and salary budgets, and major new health care reform legislation, HR professionals face significant pressure to control costs while delivering benefits that are competitive and aligned with employee needs.
To manage this balancing act, employers are rethinking their financial commitment to employee benefits and redefining their employee benefits strategies.
Against this backdrop, companies are thinking more creatively and strategically to design benefits programs that are both within cost constraints and attractive to employees. Many are turning to voluntary benefits and services to help achieve this goal.
In some form, voluntary benefits and services have supplemented core benefit packages since the 1960s. Today, these benefits are evolving, and deserve a fresh look given the new landscape and their role in the overall EVP.