Private exchanges present brokers with a tremendous opening to increase voluntary sales. A broker who is on the “offensive” will use private exchanges to better place such products to individuals and groups, says Grant Hoffman, general manager and vice president of exchanges at Connecture, a health insurance distributor.
Since private exchanges often use decision-support tools that ask individualized questions, they can better tailor benefit decisions — and voluntary options — for participants. That ability adds to the toolkit of a broker, Hoffman says.
Additionally, employees tend to buy lesser coverage when purchasing through an exchange, leaving them with extra money to purchase voluntary. “The buy-down or reduction in actuarial coverage amounts that some employees are taking advantage of creates a gap,” Hoffman says. “Those employees may have more money to spend on other benefits. … It makes sense in a private HIX [environment] to use some of those dollars to purchase voluntary tailored to them.”
Tinker Kelly, president and CEO of Nashville-based Voluntary Employee Benefit Advisors, a voluntary enrollment firm, says he had not heard of many private exchanges that offer voluntary.
“It’s still in its infancy and people feel it’s coming that direction,” explains Kelly, an Employee Benefit Adviser Advisory Board member. “But we’re not seeing that much yet.”
Exchanges are creating a broker of the future. “The old days of selling benefits are over, and those selling in a consultative function are winning the day,” Hoffman said during a webinar presented by Connecture on Nov. 4. “Brokers who aren’t adapting to the new world are going to have their business picked off. We think the broker of tomorrow has a bright, bright future.”
That broker of the future is selling voluntary products and earning business where they haven’t in the past, Hoffman says. “Perhaps the biggest tailwind in the private exchange market is the additional opportunity to generate voluntary sales,” he said during the webinar. “That’s a commission door that is simply wide open and is driven by all the changes taking place in our industry.”