I know what you’re thinking. Not another article about the impacts of ever-increasing healthcare costs or strategic cost-shifting tactics used by employers still in recession recovery mode. Worse yet, how about another smarmy passage on the virtues of managing the anxieties introduced by impending healthcare reform or on financial stress in general for that matter. No, this article is written for that stalwart group who must make sense of these issues and put them into an insurance context while providing the products and services that we’ve come to count on when we need them most. This group is, of course, the employee benefit insurance carriers. For them incorporating voluntary insurance products into their overall offerings is well…. involuntary in the current climate.
So, what does a typical carrier face when considering offering voluntary products?
In many respects, incorporating voluntary coverages into your product set is a great opportunity. Traditional voluntary offerings supplementing a core benefits package allow employees to customize based on need. Employers (customers) purchase plans that fit their needs while employees (also customers) get appropriate coverage. Additionally, non-traditional voluntary offerings (legal, pet, etc.) open the market to product innovations seldom seen in the insurance industry.
Alas, the dark side of voluntary product offerings lies in the education, enrollment, claims processing and policy administration activities required to support them. With a voluntary product set, carriers must manage cases at the participant level instead of the traditional plan and class level. For many carriers, this introduces participant detail into legacy processes and systems that they may not have been designed for.
Overall, carriers with successful voluntary offerings have business architectures that:
Obviously, each of the four broad topics listed above represent a small feat in summarization. In the real world, insurance providers face intimidating enterprise specific complexities with daunting necessities for success that drive the ever-elusive competitive edge. At NEOS, we believe that for providers, voluntary products are a reality of the contemporary market. The journey they represent can be significant and, as with all such journeys, the best first step is to be sure to know where you’re starting from as well as establishing where you’d like to go. In the end, one always influences the other.