Originally posted January 06, 2014 by Caitlin Bronson on https://www.ibamag.com

As small businesses and individuals consider their healthcare strategies within the context of the Affordable Care Act, several industry research bodies suggest voluntary benefits and services will emerge as a boom market for producer sales in the next five years.

According to the Towers Watson 2013 Voluntary Benefits and Services Survey, the importance of voluntary products in a company’s rewards strategy will grow 27% in that timeframe, while nearly 90% of producers surveyed by Eastbridge Consulting Group said they expect sales of voluntary benefit plans to increase.

While the most common voluntary products like vision, dental and disability will continue to see stable sales, however, Towers Watson said the following three are the ones to watch in 2014.

If you’re not already offering these plans, now may be the time to make a concentrated push for clients looking to expand their rewards strategy in a cost-effective way.

Critical Illness
Small businesses with fewer than 50 employees are not required to offer employee medical coverage under the Affordable Care Act, but many are looking to provide some sort of benefit plan to attract and retain quality workers.

As such, Towers Watson expects affordable medical benefits like critical illness or accident insurance to increase in sales in the upcoming  two years. In a survey of small business employers, Towers Watson found 8% plan to introduce a critical illness plan in 2014 and another 13% are considering such a plan in 2015.

Accident plans are already popular, but another 9% of survey respondents said they are considering adding one by 2015.

This tallies with the experience of Tye Elliott, vice president for core broker sales with Aflac.

“Critical illness and accident plans have been thought of as secondary, but that’s not the case anymore,” Elliot said. “Small businesses want to invest in their employees, but they want to do it practically. At a very small out-of-pocket cost, [critical illness benefits] are amazing in terms of the loyalty that builds among your clients.”

Financial Counseling

Nearly 20% of small businesses told Towers Watson they were considering adding financial counseling benefits within the next two years, particularly during this fall’s 2014 enrollment season.

Towers Watson expects employers will want to increase workers’ retirement and personal finance knowledge as the burden of financial planning falls increasingly to individuals, who pay as little as $5 to $20 a month for such benefits.

Financial counseling can even be paid solely by employees through payroll deferral, meaning no cost for employers and increased ease and peace of mind for workers.

Identity Theft Protection

With widely publicized cyber breaches like the ones that afflicted Target and Snapchat this holiday season, identity theft protection is going to be a hot item in 2014.

In fact, a recent poll from LifeLock indicated nearly 60% of producers have fielded requests from commercial clients on identity protection benefits.

Like other voluntary packages, identity theft protection is available at a generally low cost to employers. Average coverage ranges from $7 to $20 a month, with most policies offering coverage of up to $1mn.

Greg Meyer of N.C.-based Worksite Benefit Advisors said the real market for producers is in small- to medium-sized businesses, as larger employers are often targeted directly by vendors. An effective pitch from an educated agent could do wonders.

“Brokers really need to show employers the impact that ID theft plays on lost productivity caused by ID theft of an employee,” Meyer said. “If you have an employee whose identity is stolen on the road, this not only impacts that company’s corporate credit card account, it impacts productivity because the road warrior will be off the road coping with the stress and drama that goes along with trying to recover and recoup his or her credit.”

According to Towers Watson, 20% of small businesses are considering adopting identity theft protection policies by 2015.