In last month's entry, "Changing the Benefits Conversation from Products to Solutions," I wrote about how the services we provide are more than simply products – they are solutions to our customers' problems. This month, I want to expand on that a bit with a more specific example of how a solutions-oriented approach can present new opportunities to meet customers' needs.
Consider the growing financial vulnerability of consumers and how they are being squeezed on their benefits costs.
- According to the Kaiser Foundation's 2010 Employer Health Benefits Survey, workers' premium contributions have risen 47 percent since 2005, while their wages over the same period rose just 18 percent. Also over the same period, prices rose 12 percent, eroding most of the income gains.
- According to an AHIP Center for Policy Research study from May 2010, 10 million people were enrolled in a health savings account/high-deductible health plan (HSA/HDHP) in January 2010 – up from 8 million in January 2009 and 6.1 million in January 2008.
- A Kaiser Health Tracking Poll from December 2010 found that 25 percent of Americans had trouble paying their medical bills over the past year. That number rises to 36 percent of those living in households with annual incomes of less than $40,000.
Taken together, the numbers indicate the extent to which employees are being asked to take on more responsibility for their health care, and how they are becoming more financially exposed to higher deductibles and other out-of-pocket expenses.
It may seem like perverse logic to suggest that you have the opportunity to sell more insurance to someone in that situation. But the fact is, there are a number of voluntary insurance plans that can help consumers address their increased exposures by offering benefits of lump-sum payments for events including hospitalization, critical illnesses, or cancer. These benefits can help offset the higher deductibles and out-of-pocket costs that employees are exposed to.
These types of plans are gaining more traction in the market as employers learn more about them and become comfortable with them, and though they do involve an additional expense for employees, the premiums are reasonable when weighed against the exposure of the employees.
Since an employee may be seeing this type of plan for the first time, the key in selling it is to provide resources and information at enrollment that clearly communicates the value to the employee.
Steve Howard is vice president of Benefit Solutions, a business unit of American General Life Companies. His monthly blog on ASJ addresses issues and trends in the insurance industry. He can be reached at [email protected].
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