State of the Union: The Impact of COVID-19 

Assurity: Hello and welcome to Assurity’s new podcast, Focus on Voluntary Benefits. In this series, we’ve partnered with Eastbridge Consulting Group to discuss the state of the voluntary benefits industry, as well as strategies brokers can use to grow their business in today’s market.

I’m your host, Matt, and I’m excited to introduce our first guest, Bonnie Brazzell. Since joining Eastbridge more than 20 years ago, Bonnie has managed projects for both worksite and group clients with a focus on strategic, business and marketing planning, as well as market analyses and business line assessments. She has written numerous articles for BenefitsPRO and other publications, and is a featured speaker at many industry events.

Bonnie, thank you so much for joining us today. It’s great to have you.

Bonnie: It’s good to be here. Looking forward to it.

Assurity: Let's start by talking about the elephant in the room right now: the COVID-19 pandemic. It has obviously had a profound impact on business as we know it, and the voluntary benefits market is certainly no exception. Can you start by talking a little bit about the impact of the pandemic and what you're seeing in the voluntary benefits market?

Bonnie: Obviously, we're all just trying to get through this and figure out what's going to happen next. I think there's still so many unanswered questions that are related to what is going to happen because so much of the voluntary industry – so much of our sales – get to take place in the fourth quarter. And so we're still trying to figure out what all this stuff means. But so far, I've been really pleased with how the industry has responded to the pandemic. A lot of good things have been happening as a result of this very bad thing that has happened. For one thing, I think, as an industry, we may be communicating even more than we ever had. Carriers are communicating with their brokers; carriers are responding to clients. They're making all kinds of accommodations for clients to extend coverage to allow more time to pay premiums for those that have been impacted with layoffs and furloughs. And amazingly, the carriers have just adjusted very, very quickly to having everybody work from home. And yet from what I have heard, very little impact on operations. In other words, claims are still being paid, even though people are working from their home. We're still getting answers to people's questions. So we've done a good job in being able to respond very quickly to something that's never happened to us before. And we're all learning new skills, like how to hold a Zoom meeting and how you can stay in contact with someone on a more personal basis when you can't really meet with them. So brokers haven't been able to meet too much with their clients. But from all we're hearing, they're staying in touch with their clients on a very regular basis. And we'll just have to see what happens as we proceed through the year. From what I've heard so far from some of our clients, they haven't really seen too many negative impacts in terms of their business. But at Eastbridge, we do a lot of research. And this is an area where we're going to continually do short surveys. We've already done a couple, which I'll talk about in this session. But we're also going to continue to monitor that with brokers, with carriers with clients just to see what's going on and how people are failing.

Assurity: Yeah, absolutely. And it is amazing to see the ways that carriers and brokers alike have responded especially like you said – with communication. It is incredible to see how a little bit of distance can bring people somehow closer together in many ways. It's definitely good to see those positive impacts, but there are also a lot of concerns in the industry.

What are some of the top concerns that brokers share about the impact of COVID-19 – what it has had, or what it will have – on their voluntary business?

Bonnie: We did a survey about six weeks ago with brokers asking them about their concerns, and the number one concern was what impact this is going to have on enrollments. And 71% of brokers that we surveyed were concerned that enrollments would decline as a result of this. They were somewhat concerned about whether or not employees will have less interest in voluntary benefits, although there's almost as many that think employees will be more interested in voluntary benefits, because this pandemic has highlighted the need for some coverages other than just your medical coverage. A little under half of them are worried about that. Surprisingly, only about 13% were concerned about the impact of a reduced workforce due to all the closings, layoffs and furloughs. A more personal concern that they had – about a third of them were concerned about how much time it was going to take them to answer specific questions related to COVID – and trying to find time to do that, along with all the other things they needed to do. It wasn't that they didn't want to respond; they absolutely do. But it was just at that point six weeks ago: “How much time of my day is this going to take?” and “Will I be able to handle it along with everything else?” It was interesting that only about 10% of brokers that we survey said they didn't have any concerns about COVID. I don't know where they were in the process. Maybe they were in some of those states that had very little impact at that point in time. But again, not surprisingly, the biggest concern was, “What is this going to do to enrollments? And will employees still be interested in voluntary benefits?”

Assurity: It is interesting to see how it's a rather even split between those who are afraid that the appetite is going to go down and those who predicted it might actually increase.

Bonnie: Yeah, and we're going to see that and several other things as a part of our research that it's kind of a mixed bag. That's one reason we're so interested about redoing this survey here in the next month or so to see how now that we're into several months, how are people feeling – has that mixed bag shifted any, or are we s till kind of evenly mixed between “it's going to hurt us” and “it's going to help.”

Assurity: On that note, employer enthusiasm for voluntary – do you foresee an impact to that employer enthusiasm? And what are your thoughts on the idea that the need and demand for voluntary benefits will actually increase once things are back up and running?

Bonnie: Yeah, you know, it is so interesting. Again, this was one of those areas that we asked brokers about whether or not they thought that employers would be more or less enthusiastic for voluntary as a result of what we're going through with the COVID. And again, mixed bag – almost 40% said they felt like employers would be more enthusiastic about voluntary benefits and offering those, and about a third said they thought it would be less enthusiastic. About 11% said that didn't see a difference and there was a significant percentage – about just under 20% – said they weren't sure yet. But again, we say that mixed bag of 39% saying more enthusiastic, 33% saying less enthusiastic. But what's really interesting is we did an employer study right around the same time following the broker study. It was a study that we had already planned on doing with employers. It wasn't specific to the COVID pandemic. But we thought, “Wow, what an opportunity to throw some COVID questions in there and see what is on employers” minds related to COVID.” So it was very interesting. We asked them if were they anticipating making any changes to their benefits package or their benefits program as a result of the pandemic. And almost 60% – 56% – said they didn't plan any changes to what benefits they were offering as a result of the pandemic. But in addition to those that say, you know, it's status quo, we're going to continue to offer what we've always been offering. We had 18% say they were planning on offering a new voluntary benefit in the next 12 months or so, which is what the question asks: “Do you plan on making any changes in the next 12 months because of the pandemic?” So 18% said that they would add a new voluntary benefit in the next 12 months. Interestingly, this is about the same percentage that in the past when we've asked a similar question, without the pandemic as the backdrop, but just asking employers, “What do you anticipate you're going to do over the next one to two years?” It's almost the same percentage – it was up just slightly, but not enough to be significant. But I think that's a very, very positive sign that 18% want to add a new voluntary benefit. Another 13% said that they were thinking about moving a benefit that they had previously paid for or contributed something to – moving that to voluntary. Again, that number was almost the same as what it is without the pandemic as the backdrop. The one thing that did change was we had about 13% saying that they may drop some benefits completely. And typically in our surveys, that's a really low number. In fact, when we did this – we asked this question back in 2018 – no employers were anticipating dropping a benefit completely. A couple of years prior to that, it had been like 3% or something like that. So 13% potentially dropping some benefit was the biggest change, I think, to that. But again, I think it's just a very positive sign that either they're not going to make any changes at all and continue to offer what they're already offering, or they're potentially going to offer new voluntary benefits. So a very positive sign as far as what employers are expecting.

Assurity: Yeah, especially as the pandemic is impacting their bottom line, it's definitely a good sign and perhaps a bit of a silver lining to see the industry growing at a similar rate to where it has been in the past.

Bonnie: Yep, indeed.

Assurity: Now looking past the employer – more down the line to the employees themselves: Can you discuss the potential impact, positive or negative, to enrollment participation? Have you seen anything to indicate whether that's going to go up or down?

Bonnie: Yeah, you know, again, we've got some broker opinion studies, which I think are very interesting. It is, again, a mixed bag, as we've seen before. We've got about 36% of brokers saying they expect more employees to enroll in voluntary benefits. But then again, reflecting those that had some concerns, we had about 49% say fewer would enroll in voluntary benefits; about 10% said no change. And then there were again, a small percentage that said they just aren't sure. Again, I think this is a mixed bag. Some can argue very eloquently that the pandemic has really highlighted the need for the types of coverages that are typically sold as voluntary benefits, particularly the supplemental health type of plans that are sold in the voluntary space. And then others are just concerned that with layoffs and everything else going on that we may see lower participation. This is also a question that we asked employers – a very similar question to what we asked the brokers – and they were, interestingly, more positive than the brokers were, which is not typical. Oftentimes when we do something where we ask brokers a question and then we ask employers or employees a question, brokers tend to be more positive and more optimistic about things than the employer audience does, but this time, employers were more optimistic. Fifty-two percent of employers say they expect more employees to enroll in voluntary benefits. And 24% expected no change. So that's a huge number there – you've got three-quarters saying that it's either not going to change or it's going to increase with more of them. On the increase side, only 12% of employers said they expected fewer employees to enroll in voluntary benefits. So I think there's some real positive finds there. We're cautiously optimistic. It was also interesting that employers with 50 or more employees were even more positive than those in the smaller cases, which I guess makes sense because some of the smaller businesses have certainly been impacted much more heavily, oftentimes because of the lockdowns and having to survive as a small business. So that may not be a big surprise that 50 or more were more positive, but it was an interesting comment. So, again, as I said, we're cautiously optimistic that enrollment participation is not going to be severely impacted in a negative way due to this pandemic.

Assurity: Yeah, I think your earlier point is something that's good to focus on – that employees themselves are far more cognizant of the risks and where voluntary benefits can definitely help them. We’ve actually seen something anecdotally here: Some brokers Assurity works with have seen instances where there are more employees enrolling for voluntary products, even as some employees in the group are furloughed. So we're seeing this interesting mix of less potential employees but a higher participation amongst those eligible employees that are working. Is this something that you've seen at all?

Bonnie: We have mixed evidence. But yes, I think there is some of that we've seen with some other carriers reporting that, you know, we are seeing employees be a lot more interested in voluntary benefits against, especially those plans that are called the “supplemental health plans” where you're really helping with the accident, the critical illness, the hospital indemnity – those types of coverages just kind of seem to … it's kind of gone home that those can play a very big role in helping out if an employee is faced with some sort of health crisis.

Assurity: Absolutely. And as an additional follow-up there, it is interesting seeing more employees furloughed and watching the entire economy yo-yo back and forth as it is. Do you think portability in supplemental products is going to be more enticing to employees as the enrollment season comes around?

Bonnie: Yeah, that's an interesting point. And it's one that, you know, we've seen some clients who've never really pushed the whole portability concept. I mean, it's been there, but it's not been a primary focus or promotion for them. And we've seen some of our clients, carriers going in and really starting to promote that because they were having increased calls from employees who were already covered, wanting to know whether or not they could keep those coverages in force while they were furloughed. So I do think that's an excellent point and we are going to see more people asking about it during enrollment, and if they're not asking about it as a broker who's doing an enrollment, or an enroller or who's working with the enrollment, it might be a very important thing to mention that these products can be maintained even if something should happen where the employee is no longer able to have payroll deduction done.

Assurity: Now, I think a theme throughout this entire situation is just adaptability. People are changing their approach. You mentioned communication is going differently. People are working from home, so enrollment season this year will probably look pretty different than it has in in past years. So how are you seeing brokers changing their approach to enrollment to adapt with these times?

Bonnie: Yeah, absolutely. They are most definitely planning on doing things differently. You know, 44% of brokers say they're going to make many more self-serve options available during enrollment. You know, there's been a mixed bag. I mean, we've seen a definite increase in self-service enrollments through the internet, through mobile applications – those kinds of things – over the last five years. But even those brokers who were kind of holdouts to the face-to-face interactions with employees I think are going to make many more self-service options available to their accounts this year. Seventeen percent said that they did not anticipate doing any in=person enrollments, whether that be group meetings or whether that be meeting one-on-one with employees. Thirty-seven percent said that they probably still would do some if the employer would allow it, but it would be a reduced number or frequency of those in-person meetings. We also had about 15% saying that they were planning on adding call center capabilities to their enrollments, so employees can enroll over the telephone and actually have almost the same type of interaction with the enroller as they might have if we were still face to face, because with Zoom and WebEx and all the different types of video meetings that are available these days, a broker or enroller could actually sit down with an employee and be face-to-face virtually for that. So, you know, some talking about adding call center type of enrollments, only 22% of the brokers that we talked about said that they were not planning on any changes. What we didn't ask was, “Are you already doing a lot of self-service?” Which I suspect that was the case.

Assurity: Just a follow up there: You know, you mentioned 17% were saying that they weren't going to be doing any in-person enrollments. And we have seen a rise in the past years in virtual enrollments and these call center-type enrollments. Does that represent a pretty large jump?

Bonnie: We've never asked that question before as to whether or not they will not do any in-person meetings, so I don't know what how much of a jump it was. I would say that there were already some brokers that would not do any in-person meetings. But I don't think there were a lot that didn't do any. They didn't do the one-on-one, in-person meetings, but most of the time, there was at least a group meeting or a benefit fair or something like that. So my guess is that is a pretty big jump, although I don't have the stats to back me up.

Assurity: Sure, of course.

Bonnie: So I was going to share with you what employers said, because we ask a very similar question of employers as to what types of changes they might be anticipating for this year's open enrollment cycle based on the COVID situation. And 40% said that they were not planning on any changes. Now, many of those were already internet-based enrollments. But again, even though they may be internet-based enrollments, they would have still been doing group meetings and benefit fairs and that type of thing. So about 40% said they would be making no changes. The smaller the employer, the more likely it was that they said they wouldn't make any changes. Twenty-seven percent said that they were going to reduce the number of in-person meetings. Twenty-six percent said they would be eliminating in-person meetings, so a little bit higher percentage of employers say that they want to eliminate any type of in-person meetings than what we saw with the brokers. Twenty-five percent were going to move to online enrollment, and 11% were going to move to telephonic enrollment. I think you know that employers and brokers are both thinking the same thing – that they are going to have fewer in-person meetings or going to have to enroll via the internet, via call center – they’re going to have to be more accommodating. And they may have to be able to offer multiple enrollment approaches to meet the needs of those employees.

Assurity: And it'll be really interesting, I think, to see once the channels are established, if these trends continue over the coming years – once the options for more in-person enrollments are back – whether people doing virtual enrollments is going to persist.

Bonnie: Yeah, that will be interesting. You know, it's like what we're seeing with people working from home. You know, everything I read says that even after this pandemic ends, that we will probably see a big increase of the people who are working from home, at least the majority of the time, as opposed to going back to an office. So I think the enrollment changes maybe the same way – that once we kind of make that shift, there's going to be a certain percentage of them that stay in that type of virtual world.

Assurity: Yeah, absolutely. Now at Assurity, we provide virtual communications and tools like custom websites and educational product videos that brokers can use to connect to their clients, and we've seen a large increase in the appetite for these tools and communications. Now, how important would you say that these types of tools and avenues are right now? And how do you see brokers leveraging tools like this?

Bonnie: I think they are absolutely critical. You know, since as we've already said, we're not going to be doing as many in-person sessions of any type. We absolutely have to make sure that as an industry, brokers and carriers working together, that we have a very robust plan to educate and communicate benefits to employees because even though we're going to have employees enrolling online, we have to make sure that we are doing everything we can to equip them to make good decisions for themselves and their families. We know from the past when we do a passive enrollment without that robust plan of education and communication, that participation results decline. You know, we had – I don't know, maybe five, six, seven years ago – we had a big influx of people wanting to enroll online. And we had a lot of internet platforms, enrollment platforms that popped up. And, frankly, some of them were not very good. They were, I call them “app taking” systems. They were not helping the employees figure out what they need to consider for their families what might fit their needs. They were just filling out the app on a computer as opposed to a paper form or something like that. So when we did that, without any kind of help around it or communications around it, we saw participation results in the industry decline, I don't know, five to eight points during that era when we had those app taking systems. Now today, we've moved past that with our online platforms. We've got online platforms that really do a much better job of educating. But again, we've also learned as an industry, as a broker, as a carrier, that we have to have all those tools and that robust communications plan to surround it, It’s like I talked about – there's two steps to the enrollment process. There's the education and the communications. And then there's what I call fulfillment, which is when the individual actually sits down in front of the computer screen and decides what they are going to enroll in. And both of those parts have to be there. So the tools that you're talking about are absolutely critical to being able to put together that robust plan. carriers who can supply those types of tools to brokers are going to be the carriers that brokers look to to help them through this, because some of those things are very difficult to create on your own, if you will. So I think they're going to be very critical for both our results as an industry, but also as carriers compete to have brokers use their products and their tools as opposed to another.

Assurity: And I think it's an excellent point that you bring up that those those education aspects and those communication aspects absolutely still have to surround the enrollment, even if you're not meeting in person.

Bonnie: Absolutely.

Assurity: So what are some other steps that brokers can take now to position themselves for success – both immediately and also later in the year as enrollment season comes about?

Bonnie: I read an article not too long ago, that was really about how to maintain clients in this new virtual world. And I thought the advice in it was really good and appropriate for what brokers can be doing right now. One of the things they said, of course, was to reach out regularly and stay in touch with your clients. But the other thing that they said was to keep it personal. Don't just send out a canned newsletter or a canned message, but personalize it to the client. And I think brokers can do that, as they are helping their clients through this – keeping them informed, but keeping it personal, modifying that canned presentation to appeal to that particular client because we have to meet those clients where they are today. And so I think it's important to do that to keep it personal. Ask them how they're doing, ask them what their issues are, ask them what their questions are. Maybe even beyond just what you are going to do for your open enrollment cycle, but just trying to have a more full picture of what's going on. I think the degree to which you can use Zoom meetings or any type of video meetings to stay in touch, I think that helps create that more personal touch where we can actually see each other even if it is virtual. So I think all of that is really good, and it's stuff that brokers can do today. I also think that it's never too early to start planning for that open enrollment season, particularly with all the changes that are likely to have to occur during this particular open enrollment season. Go ahead and start planning and working with your employer clients for that process. Be a partner with them to figure out what's going to work best for them in this environment, and don't wait till the last minute to do it. I think having a plan and working through it and partnering with your employees and explaining why some of the things that you might be recommending – why is going to be appropriate and why it can help their employees have a better enrollment experience. Because the bottom line is most employers really are offering voluntary benefits because they want to help employees have a better set of benefits that help and solve problems for them and their families. And so I think that explaining why if we do this, what's gonna happen with employees, we can get through some of that process, but just, you know, explain it and partner with them to develop that and do it sooner rather than later.

Assurity: Yes, definitely. Well, that is all phenomenal advice. Bonnie, is there anything more that you'd like to add for our listeners as they go about the rest of their year?

Bonnie: No, just, “let's keep it positive.” Because, you know, there’s a lot going on that we can be negative about. But I think there's a lot of hope that we're going to come through this fine and the world may be different, but that's not necessarily a bad thing. Like you're saying some of these virtual enrollment things may turn out to be a very positive experience, because not everybody buys in the same way. So I think we're gonna see some things happen as a result of this that linger even after we're through this pandemic that are very positive. So I want to stay on that side of things, the positive side of things.

Assurity: Definitely. And I think the research you presented today gives a lot of reasons to be hopeful and to be positive about the future. Well, I just want to thank you once again, Bonnie, for your time today. It has been an absolute pleasure having you on, and we look forward to talking to you again.

Bonnie: All right, thank you so much. I enjoyed it.

Assurity: And to our listeners, thanks for tuning in to Assurity’s Focus on Voluntary Benefits. If you’d like to learn more about Assurity and our voluntary products, visit Assurity.com. You can also email us at podcasts@assurity.com and we’ll be happy to connect you with the sales team in your region. If you’d like to learn more about Eastbridge Consulting and their research, you can visit them at Eastbridge.com.

Thanks for listening.

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