How to make a difference using ancillary insurance benefits

1. MAKING A DIFFERENCE AS A
HEALTH INSURANCE PROFESSIONAL
Providing Uncommon Value
Making a Difference

2. Opportunity Is Nowhere

3. Opportunity is Now Here

4. 60% think medical insurance
is a growth opportunity
13% of brokers are taking a
wait and see attitude
11% of brokers will
continue current strategies

5. WHAT DO YOU DO?
WHY SHOULD I DO BUSINESS WITH
YOU?

6. What is Your Mission?

7. IBMS MISSION IS NOT ABOUT
COMPUTERS OR TECHNOLOGY. IT’S
ABOUT ALLOWING ITS INDIVIDUAL
EMPLOYEES TO CREATE WAYS FOR
CUSTOMERS TO SOLVE
OPERATIONAL PROBLEMS
Jim Collins – Author Good to Great

8. HOW THE CONSUMER WANTS TO BUY
 Carrier via website 25%
 Online website 20%
 State Run Health website 17%
 Carrier via sales center 16%
 Agent 12%
 Carrier via phone 5%
 Remain uninsured 5%
Small Group Purchase Through Broker
41%
Source: SightLinx 2011

10. TO MAKE A DIFFERENCE
 To transform, change, alter
 A significant change in situation

11. Making A Difference Is Not:
Getting a lower price
Shopping the market
Providing a spreadsheet
Maintaining an updated census
Returning calls
Enrolling the group

12. A Broker Still Focused on Price and Spreadsheets

14. DEFINE YOUR ROLE
 Single Product Insurance Agent
 Health Insurance Agent
 Group Insurance Specialist
 Consultant

15. SINGLE PRODUCT INSURANCE AGENT GROUP INSURANCE AGENT
 Major medical Major
Medical
Disability
Income
 Long term care
 Medicare Supplement
Accident Dental
Client
Critical
Life
Illness
LTC
DEFINING YOUR ROLE

16. # 1 EMPLOYER CHALLENGE
Rising premiums for group major
medical insurance
Is not the #1
Challenge
It is a Cause

17. TYPICAL SOLUTIONS
 Raise Deductibles
 Increase office visit copayments
 Shift premium to employee
How do employees feel about these
changes?

18. Why Do Employers Offer Benefits?

19. COMPLICATING THE ISSUE
No Wage Increases for the Last 3 to 5
Years

20. THE REAL EMPLOYER CHALLENGE
 Employee Morale and productivity
 And
 Employee pressure for increased wages

21. STATISTICS
9TH ANNUAL STUDY OF EMPLOYEE BENEFIT TRENDS FROM
MET LIFE
 1 out of 3 employees are looking to change
jobs within the next 12 months
 Employee Loyalty: 2008 – 59% / 2010 –
47%
 Believe the employer cares
 2008 – 41% / 2010 – 33%
 A major unspoken employer objective is
improving morale, productivity and retention
and PRESSURE FOR INCREASED WAGES

24. POSITIONING
Causing to fall into line or position

25. POSITIONING QUESTIONS
 In designing your benefit plan what goals were you trying
to achieve?
 In looking at your benefits I can shop each benefit
independently or we can look at all of your benefits within
the context of your benefit budget, which would you
prefer?
 If I can expand your benefits within the context of your
benefit budget would that be of interest?
 Would you agree that a key component of any cost-saving
strategy should be management of employee perception?

26. MAKE A DIFFERENCE WITH ANCILLARY
BENEFITS

27. CRITICAL ILLNESS

28. Use an employer paid group
critical illness product to
manage employee
perception

29. THE STRATEGY
 Offset increased deductibles, coinsurance
and copayments with employer-paid Critical
Illness coverage
 Premiums - $1.20/$1000
 Can issue amounts as low as $1000 -
$5000
 Opens the opportunity for employee
voluntary CI buy-up

30. PRESENTING THE SOLUTION
 Option 1  Option 2
 Old Plan - $1000  Old Plan - $1000
deductible deductible
 Renewal Premium: $399  Renewal Premium: $399
 New Plan: $2500  New Plan: $2500
deductible deductible
 New Premium: $369  New Premium: $371.40
 $2000 Critical Illness  Includes $2000 Critical
 Premium: $2.40 Illness

31. FOR THE EMPLOYER
 Provides a low cost – high perceived value
benefit
 Helps manage employee pressure for
increased wages
 Takes the sting out of increased deductibles
and copayments

32. Making a Difference
In the
Employee’s Life

33. STATISTICS
 1 out of 3 adults have some form of Cardio
Vascular Disease (50% under age 65)
 CVD #1 cause of death
 Heart disease is the #3 cause of limitation
of activity
 Cancer survival rate: 65.3%

34. MEDICAL BANKRUPTCY
 CNN 6/5/2009 Report:
 2001: 46% were Medical Bankruptcies
 2004: 50% were Medical Bankruptcies
 2007: 62% were Medical Bankruptcies – 80%
had medical insurance

35. MAKING A DIFFERENCE WITH
LIFE INSURANCE

36. LIFE INSURANCE FACTS
 LIMRA 2010: 75% of Americans agree that life insurance
is the best way to protect their family
 30% of households with children would have trouble paying
bills if the primary breadwinner died today
 40% more said they could not pay for living expenses if the
primary breadwinner died today
 80% of households do not have an insurance agent
 USA Today 12/3/2010
 Only 44% of households have an individual life policy
 30% of households have no life insurance

37. GROUP LIFE FACTS
 BLS 2010: 62% of full time employees had access
to life insurance at work - 96% participate
 1-49 EE: 44% have access / 95% participate
 50-99 EE: 57% have access / 95% participate
 100-499 EE 71% have access / 96% participate
 Businessinsurance.com
 VGL: Offered in 23% of companies in 2006

38. Would you like an idea to
increase your per enrollment
revenue?

39. ADDING LIFE INSURANCE TO GROUP
CLIENTS

40. WITH CORE ENROLLMENT
 Utilize a Term to Age 100
 Consider a Critical Illness Rider
 Consider Dual Option
 Voluntary Group Term / Term to 100
 Do not try to sell the product – get
conceptual buy-in
 “After I get each employee enrolled in the group
______ I would like to give them the opportunity
to purchase some additional term life insurance
that they pay for – do you see a problem with
that?”

41. DIFFERENTIATE WITH DENTAL

42. TRADITIONAL AGENT APPROACH
 100% Preventative – no deductible
 80% Basic Services
 May include Perio / Endo / Oral Surgery
 50% Major Services
 Basic and Major Subject to $50 annual deductible
 May or may not include ortho
 May include roll-over
 Utilize the spreadsheet

43. NON-TRADITIONAL AGENT

44. THE INNOVATIVE INSURANCE AGENT
 Replace annual deductible with lifetime deductible
 Consider per visit copayment
 Replace 2 cleanings every 6 months with 2 per year
 Instead of partial employer contribution use 100%
employer paid minimal plan design
 100% for 2 cleanings 2 times per year with $10 copay
 80% for x-ray annually
 Sample NC rate – Less than $5 per employee per month
Sells the plan not the spreadsheet

45. ADD DISABILITY INCOME

46. # EE STD STD EE LTD LTD EE Contrib
Contrib
1 – 49 23% 30% 18% 10%
50 – 99 34% 25% 29% 6%
100 – 499 43% 17% 36% 9%
Companies Offering Disability Income

47. IF YOU DO NOT CHANGE DIRECTION,
YOU MAY END UP WHERE YOU ARE
HEADING
Lao Tzu

48. If you don’t
create change,
change will
create you
Unknown

49. MEL SCHLESINGER, RHU, REBC
(336) 777-3938
mel@melschlesinger.com
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