to select a voluntary benefits provider
are nearly 2000 insurance firms in the
United States. Due to the explosive
growth in the voluntary market, many
firms have recently entered the voluntary
benefits area (some have left just as
quickly). There are some guidelines
which may assist you in determining which
agency you will work with on handling
your voluntary benefit business.
Ask how efficient the carrier is
when it comes to paying claims.
This question should come first, since
this is the ultimate acid test of any
program. Some carriers compete on low
premiums (price), some compete by paying
brokers higher commissions, neither of
these are truly valid metrics from an
employers perspective. Most top brokers
offer top carriers, and tend to have a
consultative approach. They offer
programs that fit the client's needs
regardless of the commission structure
they are offered. Find out which carriers
have the most marketshare in your area,
if your broker is not recomending that
carrier, you should do a little homework
to find out why not. Carriers gain share
by providing high payouts, having low
expense ratios and a strong servicing
record. Your local Insurance board will
have report of customer satisfaction
rankings for insurance carriers, ask for
a copy. And while you are at it, ask for
financial stability rating from
AM Best or similar agency.
satisfaction should be the first
qualification that you investigate when
considering voluntary benefits. As an
employer offering a voluntary program you
do not want to hear how long employees
have waited to collect on a claim. If
there was an unfortunate event, your
employee needs the money now; when they
incur the expenses. You do not want to
hear how difficult it was to collect on a
claim. An insightful question to ask is
whether or not the insurance company has
a claims committee for appeal or review
of denied claims. A good claims committee
looks for legal reasons to pay a claim,
not reasons to avoid payment.
Ask how the billing is done.
Good questions include "How do we
handle a missed deduction due to
vacations, sickness, etc.?" Be wary
if the carrier will send a bill to the
employee for a single missed payment.
Most top carriers have found a way to
defer the payment or ideally will have an
Internet billing solution that will allow
corrections to be made on-line.
Find out if the agent needs to collect
money with the application, the preferred
method is to have the carrier do the
collections. It is helpful to find out if
the payroll administrator can make
adjustments on the bill for terminations
and changes. Determining the number of
billing modes is another key point, the
best answer comes from carriers that have
flexibility by offering many modes such
as weekly, bi-weekly, monthly, etc.
Now is a good time to find out if there
is a central 800 number to call for
customer service. Most benefit agents are
out in the field servicing accounts, it
is an advantage to have a toll free
number for your employees, a bi-lingual
number is a bonus if your firm has a high
percentage of non-english speaking
It is important to understand the number
of participating employees required to
form a group. The smaller the number
(less than 10), the better the answer.
The product set should meet five key
1. Affordability - generally speaking the
weekly premium should be in the range of
their hourly wage.
2. Complement existing benefits -not
compete with something that the company
already pays for.
3. Underwriting - Simplified field issue
4. Simplicity- easy to understand
5. Universality - a broad spectrum of
offerings allows customization and
minimizes the likelihood that you will
need several voluntary firms or invoices.