Vision insurance sales experienced double-digit growth between 2013 and 2014, contributing to an overall growth trend in voluntary benefits, according to an industry survey.
Reported in its latest U.S. Worksite Sales survey, LIMRA—a worldwide consulting firm for insurance and financial services—found that sales of vision insurance as a voluntary benefit increased by 24% in 2014 compared to 2013, with all voluntary benefits increasing by 5% overall in that timeframe. That's in comparison to dental insurance sales, which increased only 7% in that period.
This is not only the fourth straight year that voluntary benefits sales have increased, but also the fourth straight year that vision insurance has increased by 12% or more, according to LIMRA.
Ron Neyer, LIMRA assistant research director, stated in a news release that voluntary benefits are experiencing this uptick, in part, because these products "allow employers to enrich their employee benefits portfolio at no direct cost."
Although there's significant activity in the voluntary benefits space with vision leading the way, it remains a major advocacy priority of the AOA to enlighten employers and payers on the benefits of a more integrated and imbedded eye health and vision benefit. And despite the growth in voluntary benefits, health plans continue to integrate eye exams and other eye health benefits.
However, given this upward trend during unprecedented change in the eye health and vision care market, doctors might benefit from understanding the difference among voluntary, supplemental and ancillary benefits. David C. Contorno, CEO of Lake Norman Benefits, Inc., and Benefits Selling magazine's 2015 National Broker of the Year honoree, offers a breakdown of these terms:
- Voluntary benefits refers to any type of additional benefit that is added to an employer's menu of benefit options, and are benefits that employees pay entirely. The most common voluntary benefit is life insurance, according to the National Association of Health Underwriters.
Supplemental benefits tightly tie into another line of coverage to enhance that existing benefit package, and are often referred to as "gap coverage." It often is a financial payment that fills in the "gap" between what the insurer pays and what the employee (covered person) has to pay out-of-pocket.
Ancillary benefits often refers to an "add-on" to the employee's principle or core plan akin to having additional coverage beyond what is covered by the health/medical plan that is fully paid by the employer.
"That's not written in stone, and the terms can be somewhat regionalized ... so there are little nuances," Contorno says.
As for the growth in voluntary benefits, Contorno pinpoints two factors: first, a desire by brokers to replace or increase their business revenue, and secondly, that some brokers may suggest a shift to making selected benefits voluntary in their sales efforts to demonstrate a cost savings to the employer—though it is not true cost savings. This second point reduces the employer's health plan benefits, and forces them to employ voluntary benefits to make up for the costs that the plan no longer covers by shifting additional costs to employees.
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