Whether your Plan refers to the products as voluntary, ancillary, supplemental, or gap benefits, the market is growing. As high deductible health plans continue to be the norm, Blue members are purchasing benefits such as Accident, Critical Illness, Hospital Indemnity, and Limited Benefits Medical to help insulate them from the financial impact of a health event, and to give them financial peace of mind.
Find out why you should consider offering them with BCS.
1.) It is a revenue generator
- In 2019, carriers reported nearly $8 billion in new annualized premium and $38 billion in force premium for Accident, Cancer, Critical Illness, Hospital Indemnity, Limited Benefits Medical, and other supplemental health insurance products.
- This insurance market is growing – Members want to fill the “gap” created by high deductible health plans.
- Your Plan can earn overrides on all voluntary/supplemental sales sold through your producers. BCS Financial can provide revenue projections and based on your medical membership.
2.) Member persistency increases
- Often referred to as “stickiness”, employers with more products are proven to stay longer which often makes medical more profitable.
- Carriers have seen up to a 7-9% increase in medical persistency by adding voluntary products*.
3.) Voluntary is a competitive threat response
- Many major health carriers offer a wide array of supplemental products like Accident, Critical Illness, Hospital Indemnity and Limited Benefits Fixed Indemnity Medical.
- Claims integration (when a medical claim triggers an Accident, Critical Illness or Hospital Indemnity claim) is a key differentiator for major medical carriers selling voluntary in a space where non-medical carriers have historically had majority market share.
- Bundling provides an opportunity for consolidated billing (which employers value) when selling self-funded business with a TPA.
- New markets can open up. Target prospects include employers with lower wage and part-time employees such as hotels, restaurants, construction, retail, and staffing agencies. Employers with white collar employees offer these products to supplement members’ HSAs and provide additional financial security.
4.) Voluntary increases producer differentiation and commissions
- Provides Blue options for producers to provide holistic solutions and earn additional compensation. Ancillary can be used as a ‘trojan horse’ to gain a seat at the table from which to build the relationship and add other Blue products like medical, dental and vision.
- Provides Blue options for producers in an environment where medical commissions are decreasing. Top producers believe their cross-sell rates exceed 30%, and now receive ancillary commissions that rival their medical commissions.
Please contact your BCS contact or Janae Sorenson, vice president of Ancillary Markets, to learn about potential revenue opportunities in your markets. BCS has a fast implementation schedule to that can help you win business in 2021, and make the most of 1/1/22 opportunities.
*BCBS of MA recognized an increase in medical persistency from 7-9% based on lines of coverage added.