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The online participation challenge.

A RECENT STUDY cited "pressure to relax underwriting standards" as the top concern of voluntary insurers.

One reason for this trend is the movement toward online enrollment through an exchange or benefit administration platform. The personal sales element inherent in an in-person enrollment meeting is blunted when dialogue about voluntary plans is handled online.

This trend has market impetus because ben admin systems provide an easy, one-stop place for employers to administer their plans, and online enrollment works fine in the technical sense. The process can be tracked in one place with no paper forms and no enrollment meetings.

Private exchanges came along promising yet another online selling service: the benefit package recommendation. These are generally based on asking employee a few questions and are designed to help employees select the optimal package.

So, why are underwriting standards such an issue for insurers? The simple fact is, none of this works as well as old-fashioned enrollment meetings.

Most private exchange providers require that any level of participation be accepted, because their premise is that employees will buy based on system recommendations--and they will recommend products as needed--so the right people will buy. One reason for this premise is due to private exchanges' origins in marketing health insurance, not life, disability, or critical illness. It's easy to get participation on a product line that everyone wants. People worry about health insurance, but no one wakes up saying "I better buy disability insurance today."


Brokers using ben admin systems have increasingly requested "no participation requirements" on voluntary products. In order to keep the enrollment process simple, they don't want the complication of underwriting, but they also don't want a line of business to be rejected for poor participation.

It's also easy to see why this is an issue for insurers. After all, we sell more business when participation is good, and underwriters and actuaries relax a bit about the inherent anti-selection in voluntary business relative to the group business, where all eligible employees are covered. It's a given that insurance companies want good participation.

What's the solution? Whenever possible, we suggest that online enrollment be organized as an ongoing process and not a "two weeks open a year" event. Educational communication about benefit options should be sent year round. If possible, enrollment meetings should still be available, and at the very least, the campaign should include webinars and a call center to help employees during enrollment.

A brief summary of an online case our sales team managed accompanies this article. It shows the kind of success that's possible when the employer, broker, benefit administration system and carrier set up the suggested type of campaign.

Marty Traynor is vice president, voluntary benefits and group products, at Mutual of Omaha. He may be reached at

Web Presence


National Service Company with 1,200 eligible employees in 7 time zones and all 50 states


Online enrollment to introduce critical illness product and increase participation on voluntary life and disability


Conduct webinars timed to support multiple time zones; incentivize employees to attend webinars via drawings for iPad mini and Beats headphone prizes (tied to webinar attendance and not purchasing to keep the incentive compliant)
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Title Annotation:competitive advantage
Author:Traynor, Marty
Publication:Benefits Selling
Date:May 1, 2016
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