Best practices for evaluating products that employers and employees need
In a previous post, we discussed best practices for segmenting your customers–laying out a clear strategy on where to start when cross-selling ancillary insurance products. Now that you’ve run your analysis, separated out your accounts and talked to your brokers, it’s time to turn your attention to the products themselves.
What exactly are you going to be selling?
Without a doubt, there are a lot of great ancillary products out there–you probably know of a bunch already–covering a wide range of consumer needs, from disability coverage to vision, pet and travel insurance. Plans can find it overwhelming to sort through and assess all of the options, so here are some recommendations on where to start:
- Listen to your accounts and brokers. – What concerns are they hearing from employers? What benefits are current and prospective employees asking for?
- Look at product service trends. – In order to offer products that both employers and employees want, you need to keep a close eye on what’s happening in the marketplace. Here are a few important trends to consider:
Health care costs continue to rise
Employers are continuing to see their health care costs rise–an increase of 8.5% is predicted in 2024–in spite of all the cost containment strategies they’ve put in place over the past few years. Employees are hurting too–half of adults say it’s difficult to afford health care, so many delay care or avoid filling prescriptions.
Even when employees can afford to purchase insurance, many struggle to pay the rising out-of-pocket costs that come with high deductible health plans, which have become popular with employers. For plans, this means offering ancillary benefits like accident, critical illness and hospital indemnity, which would allow employees to get the care they need without being hit by devastating medical bills, so they can focus on getting healthy and returning to work.
The job market remains tight
With steady, low unemployment, employers looking to attract and retain quality employees need to stay competitive. One way for them to do this is by offering benefits outside of health insurance that are in demand. For example, employee well-being has been a priority since the start of the pandemic four years ago, so offering holistic programs is a win-win for both employers and employees–doing the right thing is usually good for business, too.
So who are the right partners? And what should you be looking for in them?
The established answer to both of these questions is that you’ll want to partner with carriers that offer the ancillary products with the highest demand, as we outlined above. Unfortunately, that’s just not good enough any longer. Employers aren’t looking to pay more for employee benefits, and employees don’t have any extra cash for benefits they might not ever use.
You need to be looking for supplemental health carriers that understand this, and have developed new or modified existing products to address these concerns. These are carriers that offer employers alternative funding options, and have shifted from the traditional “pay and submit” claims submission process to a more consumer friendly claims payment process.
As you consider potential partners, you’re going to want to look at a mix of established carriers and new health tech companies–the latter have focused more on ease of use for both employers and employees. Specifically, here are some questions you’ll want to ask:
Their revenue model:
- For established carriers, what are their underwriting results? What’s their loss ratio? If their margins are too high, that could be a sign their products aren’t consumer friendly.
- For newer health tech companies, what are their enrollment and underwriting results? Can they share success stories that back-up their value proposition?
- Use of technology: Are they still doing things the “old way” and using a legacy system? Or are they cloud-based and API-enabled? Employees are more likely to take advantage of products that have single sign-on (SSO) and user-friendly member portal capabilities.
Their claims submission options:
- What are their pay and reimbursement options? What are their turnaround times?
- What medical payer claims integration opportunities are currently available?
At the end of your evaluation, you need to be comfortable that the partner you’re going to work with truly understands the financial concerns of your customers and their employees, and is committed to helping you address them.
Save the Dates
We’ll be diving into the topic of ancillary insurance products more deeply this spring with back-to-back events: First up is a free webinar on April 23–we’ll focus on how plans can improve member and account satisfaction through cross-selling. Then on May 14 we’re hosting a workshop to facilitate connections between plans and carriers.
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Make sure you’re on our email list, so you can get the registration details for the webinar and workshop when they’re available.
