VB Voice - March 2023

March 2023

Voluntary Benefits Voice M A G A Z I N E

What is Minimum Essential Coverage?

The Planning Lifecycle of Voluntary Benefits

Overview & Best Practices

Video Overview from Eastbridge Consulting Group

The Commission Conundrum Heaped vs Level Commission

Editorial Board

Mark Rosenthal PwC

Seif Saghri BenefitHub

Jessica DePhillips Mercer

Michael Naumann Reliance Matrix

Jack Holder EBIS

Jennifer Daniel Michael Stachowiak Colonial Life Aflac

Key Contributors

Steve Clabaugh CLU, ChFC

Editorial Staff Co-Editors Trevor Garbers Trevor@voluntary-advantage.com Heather Garbers Heather@voluntary-advantage.com For Media and Marketing Requests contact: Heather@voluntary-advantage.com and Trevor@voluntary-advantage.com

FEATURED ARTICLES 01

The Commission Conundrum

Do Heaped Commissions Still Apply in our Business Today?

02 Ethics in a Digital World

The Impact of Technology & Ethics in the VB Industry Today

03

Never Satisfied with the Status Quo Reflecting on Tom Farmer's Impact on the VB Industry

04 What is Minimum Essential Coverage Overview of MEC and Best Practices

05

Voices of Voluntary Benefits

06

Everyday Ethics, Saying "No"

Interview with Voluntary Benefit Practice Leaders

When to Say "No"

The Planning Lifecycle of Voluntary Benefits

Everyday Ethics, Saying "No"

The Formula for Finding the Right Person

Ethics...

The theme for the March edition of the Voluntary Benefits Voice is “Ethics” which is an ever-evolving topic as more entrants race into our marketplace: new carriers, benefit administration systems, benefit communication firms or, as simple as a new rider on an existing worksite product... Let’s not also forget the growing conversation around all things state mandated long term care happening across our country. As an observation, long term care insurance is potentially trending as the largest unknown Pandora's box that we have encountered in some time.

So, why did we choose ethics for this month's theme?

Simple - Everything we do today impacts multiple generations down the road in making sure the promises we make today - starting with product creation, marketing, contractual agreements, product placement and claims deliverables - are held to the highest ethical standards in protecting our most valuables assets, ranging from our loved ones, property, business ownership, generational wealth, family legacies in addition to, ourselves and our overall wellbeing.

By now, we have probably all heard the famous movie quote in the box office hit Jerry Maguire of “Show Me the Money!”, where Tom Cruise is pleading to get his top player to sign with him at all costs for the upcoming football season. Very much like the exchanges happening in meetings right now within our marketplace of “Show Me the Heaped Commission” or, “Show Me the Marketing Subsidy!”

Well, it’s no secret that there is revenue to be made in Voluntary Benefits today. In addition, the revenue opportunity offered by Voluntary Benefits sales is growing, which potentially opens the door to questionable ethics at all levels. In most cases, this leaves most stakeholders in the positive, except it can impact the policyholder, who believes the entire distribution and placement process up to when they physically receive their policy in hand, was executed with the highest ethical standards.

In this edition, we have challenged industry experts to provide our readership with both data and real-life examples exploring both sides of the coin of not only identifying where ethics can go south per say, but just as important, how can we sustain our ethical responsibilities in keeping our marketplace at the highest level to protect the promises to our trusted policyholders.

By Trevor Garbers One of the best ways to grow in business is to learn from and collaborate with the very best in your industry.

We want to elevate and push ourselves further. We need all of your help to do this. Today, our marketplace is challenged to deliver real-life solutions while being faced with some of the greatest obstacles that we have witnessed in some time. This ranges from The Great Resignation, inflation, increase household debt to income ratios and decreases in overall household savings, which each bring their own set of challenges. Now, add in the fastest growing segment in the insurance marketplace (voluntary benefits), where large amounts of capital are being infused each quarter as everyone wants to be part of this modern day, shall we say voluntary benefits gold-rush, teeing up the perfect storm around the four key topics that force an organization or individual to push one’s ethical envelope, this alludes to issues of compensation, difference in regulation within states, inadequate controls and increased competition.

As a great leader in our industry coined, we can share what you want to hear or, we can share what you need to hear – Here at Voluntary Advantage we prefer the later and we believe staying out in front by having tough discussions around key topics like ethics by delivering data driven facts from the industry's best will only continue to raise our marketplace to new heights!

The Planning Lifecycle of Voluntary Benefits In this video Nick Rockwell, President of Eastbridge Consulting Group, breaks down the decision making and planning process to better explain how to engage employees in benefits

TM

Nick Rockwell President

Danielle Lehman Senior Consultant

As a Key Contributor to Voluntary Benefits Voice, Eastbridge Consulting will be sharing content from our research and experience that aims to represent the perspectives and “voices” of the many different stakeholders in the voluntary market. Eastbridge is the source for research, experience, and advice for companies competing in the voluntary space and for those wishing to enter. For over 25 years, they have built the industry’s leading data warehouse and industry-specific consulting practice. Today, 20 of the 25 largest voluntary/worksite carriers are both consulting and research clients of Eastbridge.

The Conundrum

By Trevor & Heather Garbers

For this article we would like to focus on the concept of heaped commissions – are they necessary (or even ethical) in the industry today?

As with any hot topic, it is important to think about the stakeholders on both sides before making a judgement.

To bring us to a common understanding, Heaped Commissions are when there is a high 1st year commission, with a lower flat renewal – for instance a 60% commission in year 1, with a 10% renewal available thereafter. This type of structure is common with Accident, Hospital Indemnity, Critical Illness, and Permanent Life Insurance; and is compared to the level 10%, 15%, 20% commission commonly paid for other employee benefits such as dental, vision, and term life insurance.

Heaped commissions were created to pay for the cost of marketing and enrolling individual policies on a payroll deducted basis – the establishment of worksite benefits. For years, heaped commissions were really the only option and it was common in our business for cases to move carrier to carrier every (2) years as the sales representative sought to replicate high 60-75% (or higher) commissions year after year, or BOR’s changed hands. At this time, “worksite” products were typically on an individual chassis, which often had commissions that were vested for the life of the policy, and would remain with the writing agent even after a BOR. From a purely revenue standpoint, how long does it take to earn the same or more on a level commission basis, as compared to heaped commissions?

Heaped Commissions

Level Commissions

Year 1: $100,000 AP x 60% = $60,000 Revenue

Year 1: $100,000 AP x 20% = $20,000 Revenue

Year 2: $100,000 x 10% = $10,000 (+$60,000) = $70,000

Year 2: $100,000 x 20% = $20,000 (+$20,000) = $40,000

Year 3: $100,000 x 10% = $10,000 (+$70,000) = $80,000

Year 3: $100,000 x 20% = $20,000 (+$40,000) = $60,000

Year 4: $100,000 x 10% = $10,000 (+$80,000) = $90,000

Year 4: $100,000 x 20% = $20,000 (+$60,000) = $80,000

Year 5: $100,000 x 10% = $10,000 (+$90,000) = $100,000 Total Accrued Revenue

Year 5: $100,000 x 20% = $20,000 (+$80,000) = $100,000 Total Accrued Revenue

We’ll use the examples of 20% level commission and 60%/10% heaped commission, with $100,000 in annualized sold premium to illustrate this for you.

Note: This example does simplify the issue quite a bit as it doesn’t take into account if the group is case level or policyholder heaped, or if annual premium is growing year after year with new hires or increased participation.

We are creating our projection based on premium written in year 1 only.

In this example, we would need to keep the coverage with the same carrier for at least 5 years for the level commission payout to equal what you would have earned in the same amount of time on a heaped commission schedule.

With the employee benefits industry more competitive than ever, more clients are holding their Brokers/Agents accountable for ROI and utilization.

We’ve all heard of clients who have changed BOR’s simply because another Broker presented the client with their Form 5500 (which is public data) reporting large revenue on these lines and the client was shocked to see how much their (now prior) Broker was making. So how do you justify the revenue that is paid in the first year of a heaped commission arrangement vs a level commission payout?

The question of ethics becomes, are heaped commissions necessary and in the best interest of the client and policyholder in the Voluntary Benefits world today? To answer this, we should consider the perspectives of different stakeholders in our industry.

Brokers: are incentivized based on commissions paid to their firm and so they often prefer level commissions which they can build on year after year, instead of having to replicate large bumps in revenue each year. Replacing VB carriers is also costly from a time standpoint both on their team and the benefits manager at the client and so they may want to minimize their workload to maintain the relationship with the client and keep their client management team happy. At the same time however, some Brokers may be trying to meet a sales goal, maximize an earnout or have a high turnover client that they actively re-enroll every year, which makes heaped commissions enticing for them. They may also be reinvesting a portion of their commissions into implementation fees or value add services for the client.

Consultants: are typically paid a flat consulting fee or fee based on billable hours from the client and so oftentimes will offer VB on a net-of-commission basis (0% commission) because the cost for their time is billed directly to the client. There may also be situations where Consultants offset their fee based on the placement of Voluntary Benefits (making up the difference in VB commission) – in these cases, they may prefer level commissions to maintain a level fee over time.

Career Agents: these are Agents typically representing a single carrier that are bonused and compensated based on annual premium sold and heaped commissions. Because they traditionally enroll employees onsite face-to-face, sales through this channel are predominately based on a heaped commission schedule and Agents are encouraged to re-enroll the group throughout the year to catch new hires and sell additional lines.

Members: with most Carriers, 60/10% in heaped commission equates to the same rate load as level 20% and so there is not a cost differential unless the Broker/Consultant/Agent is taking more or less than 20% in level commission.

Voluntary Benefit Carriers: When heaped commissions were our only option, premiums were also quite a bit higher. Today, heaped commissions leave the carrier at higher risk of replacement after year 2 and makes new cases unprofitable in the first year (at a time when carriers are also being squeezed on premium, marketing & tech fees, and technology overrides).

Carriers typically prefer a level commission structure, but at the same time, they want to write new business and so they almost always have a heaped commission option available in order to meet the needs of their distribution partners. We may see movement on the side of the carriers in the near future towards lower first year heaped commissions or even higher premiums for heaped commissions, as they take into account the cost of higher lapse rates where heaped commissions have been paid.

Enrollment Firms: this is the stakeholder to really consider when it comes to heaped commissions, and so we’ve interviewed Dave Hurlock and Tomas Flores with PES for their input. According to Dave & Tomas, heaped commissions are necessary in their side of the industry due to the higher costs associated with services to support an enrollment including: benefit counselors, account managers, implementation teams, communication resources, travel (if applicable), and technology.

As we are starting to see more carriers trying to transition to a standard of level commissions, we also asked them if enrollment partners are adapting to the concept of a level commission structure. Dave & Tomas said that they are open to this in situations where they can still cover their costs such as: cases with low turnover and certain industries. However, the risk of not recouping the initial capital expenditures are greater with level commissions and so the revenue share (commission split) would have to be adjusted accordingly. Adjusting to level commission also likely includes relying more on technology than on live resources, and depending on the employers’ objectives regarding benefits education for their employees this may lead to a lower level of benefits comprehension with employees.

A common issue in partnering with enrollment firms over the years has been that some provide their services the first year when they receive heaped commissions, but are unable to provide the same services at subsequent enrollments because there isn’t enough revenue available on that case without a carrier change. According to Dave & Thomas, Each case should be properly underwritten to determine if the funding is adequate to support the same level ongoing support. There are numerous factors that are considered when underwriting an enrollment including: industry, employee turnover, growth of the organization, enrollment format (onsite, virtual, hybrid, call center), new hires, planned acquisitions, product mix and scope of services. With that being said, a best practice is that there should not be a reduction of support simply because an enrollment firm did not plan properly. Adding additional products in subsequent years could also be an effective method to allow continued resources to be available for the employees.

If ethically, we should do what is in the best interest of the client and member, is flipping carriers every (2) years for new heaped commissions in their best interest? Does that conversation change when an enrollment firm is engaged and we know the additional value they bring to the client in terms of

decreased administrative burden during the enrollment process, and increased benefits comprehension and engagement among their employees?

The last item to consider here is that the choice of heaped vs level commissions may not be at the discretion of the distribution partner forever. With some states enacting higher loss ratios, they may ultimately be making the choice for us, accelerating the adoption of level commissions and even lowering the level commission amounts available (Example: Washington state).

The reality of the matter today is that, while there is a movement towards widescale adoption of level commission structures as more brokers and consultants engage, and it tends to be the preferred structure of the carriers (with some newer vendors in the marketplace only offering level schedules); there are still situations in our industry where heaped commissions reign supreme and provide funding for valuable communication services for the benefit of the member. As Clients hold their VB distribution partners accountable for the revenue they earn on their account, VB distribution partners should be mindful that they are providing services and value to justify those revenue numbers and the products that they are marketing to employees.

Ethics in a Digital World

By Jennifer Daniel Ethics can be a tricky subject as definitions of right and wrong vary by person, situation, and of course regulations. It’s easy to say, “just do the right thing” until there are different versions of “right”. With the majority of enrollments taking place on digital platforms today, the subject of ethics and technology has become a common one. This article highlights three of them, but there are many more. The goal of this article is not to define what is ethical, but rather to raise some of the ethical considerations that we should all be thinking about.

Decision Support Tools: Let’s start with the topic of using AI, specifically related to decision support tools. The use of AI in helping employees make decisions about their voluntary benefit elections can offer many benefits, including increased efficiency, accuracy, and personalization. However, there are also several ethical considerations that employers should keep in mind when choosing a Decision Support Tool including: 1. Transparency: Platforms should be transparent about how AI is used to make decisions about Voluntary Benefit elections.

This includes explaining the algorithms and data sources used, as well as any potential biases that may exist. Who creates the algorithm? Can the employer influence the recommendations to drive certain benefit decisions? It is important to make sure the Decision Support Tool is providing factual recommendations unique to each individual, not recommendations based on the potential to drive revenue.

2. Privacy: Platforms should ensure that employees' personal information is protected and used only for the purposes for which it was collected. This includes obtaining consent from employees to use their data for AI-based decision making. Many of these tools ask for personal information that the employer may not have access to (nor want), how is that data being used and protected?

3. Human oversight: AI-based decision making should not be fully automated, and there should be human oversight to ensure that decisions made using AI are appropriate and ethical.

Claims Auto-Adjudication Claims auto-adjudication is a hot topic in the market today. With auto-adjudication, the claims division of an insurance company leverages AI, industry data, and pre-set rules/algorithms to determine whether a claim is covered under the policy, how much should be paid out, and automatically paying it as well. This is ideally done with minimal involvement from the employee filing the claim.

Auto-adjudication has several benefits, starting with less paperwork and hassle for the insured. It also offers increased accuracy, faster processing times, and lower costs due to automation.

However, auto-adjudication can also raise some ethical concerns.

Failure to get employee permission. Is the employee aware that the insurance company is gathering this data on their behalf from 3rd parties? While getting a check out of the blue from your insurance company is usually a good thing, most employees at least want to be aware of what is happening on their behalf and how their data is being used.

Lack of transparency. What access does the employee have to see what data has been gathered, where the claim is in the process and when it will be paid? Some carriers are developing “claim portals” to give employees piece of mind that the right steps are being taken. It’s like the pizza tracker, but for insurance claims.

Review of data. Technology can definitely help employees get claims filed faster. That being said, it is important for insurers to ensure that their auto-adjudication process and systems are fair, accurate, transparent, and that they provide a mechanism for human review and intervention when necessary. This can help ensure that employees receive the coverage they are entitled to and that insurers are able to manage their financial risk in a responsible and ethical manner.

Platform Subsidy Payments Platform fees are often paid by a carrier to support the enrollment of their products on a specific platform.

Generally, the platform is doing work on behalf of the carrier for a mutual client. These fees go by many names: tech credits, technology investments, marketing fees, subsidies and sometimes commissions or overrides.

These fees are not regulated in most states and vary greatly in different situations. Because of this, they pose some possible ethical issues that should be considered: What is it paying for? When subsidies are requested, it should be very clear what they will be used for and how that will benefit the employer and or the employees who are purchasing the insurance products. Is there an invoice showing what work was done and how much it cost?

Who is the subsidy being paid to? If it is being paid to a platform, can the platform accept it and handle the appropriate accounting? Some platforms are not set up for this, in this case it may get paid to the broker, is that process clearly outlined for all parties involved?

Transparency. Is the client aware of the subsidy and how it will be applied? Does the subsidy impact the rates that the employees will be paying for the benefits?

Weight of subsidy payment in carrier selection.

How do you ensure that the best product / carrier decision is being made for the client and members vs just the carrier who is paying the highest subsidy?

As the insurance industry continues to leverage technology solutions, making ethical decisions around these topics is very important. Technology can help move us forward, but we still need humans to drive ethical decision making and ethical choices.

Jennifer Daniel, National Vice President Broker Distribution Strategy and Partnerships at Aflac. Jennifer is a proven leader in the insurance industry specializing in benefits technology and strategic partnerships. In her current role she is responsible for leading multiple teams that drive Aflac’s strategic sales efforts around benefits technology, premier broker relationships and enrollment partnerships. In addition she works internally at Aflac to drive innovation and sales growth.

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Never Satisfied with the Status Quo: Tom Farmer

By Trevor & Heather Garbers It’s not often that we meet people in insurance or benefits who say they chose this career. We usually hear they started in something else and fell into this industry. However, that is not the case with industry legend, Tom Farmer. His story, like his career, is unique and Voluntary Advantage is proud to honor Tom as he retires after over 40 years of doing what he loves and making a difference in the lives of so many.

To know Tom is to look up to him as a great friend and human being, admire him, and dread ever competing against him (although you are guaranteed to learn a thing or two in the process). As we look back at Tom’s career, we’ll start from the beginning. He is a native Californian and number six of seven children. Education was a big part of his family growing up with his parents dreaming of college for all seven children, even relocating from the Cincinnati, Ohio area to California in search of better schools. He was born in Southern California, went to school in Central California at Fresno State University and now lives in El Dorado Hills in Northern California. Although he has experienced three very different California’s in his life, he will tell you that for the most part he grew up in Fresno but now calls Northern California home.

As mentioned, Tom is actually one of the few people you will meet who knew he wanted to be in the insurance industry early in his career. He was a part of the first ever high school insurance program called Insurance Model Agency. It was actually sponsored by the insurance industry to help promote insurance and get young people engaged and interested in the business. During his Junior and Senior years, he was taught by insurance professionals the basics of insurance.

They would talk to other students about their auto insurance, go over coverages and explain their options, and actually run through what it was like to have an agency with customers. This is where Tom fell in love with insurance and found that he really enjoyed talking to people and helping them.

His teacher saw in Tom someone who enjoyed talking to people and had a casual confidence that came across as someone you can trust. She recommended him to a contact at Commercial Union Insurance and he started working full-time as a Personal Lines Underwriter while taking night classes at college in Fresno, where he met his wife Tina and got married. He was the youngest underwriter in the company at the time.

From there, he was recruited to Zurich Insurance as a Marketing Representative which brought him his first job in the voluntary industry, before moving to a sales position selling Zurich payroll deducted, Group Auto & Homeowners Insurance, Life Insurance, Travel Accident and AD&D to large employers. He became the Director of Corporate Accounts and worked for Zurich for a total of 14 years, with the last 5 years reporting directly to the President of the division; who would later approach him to be apart of a startup Benefits Technology company to lead sales and build the strategy.

He became one of the six original founders of RewardsPlus, growing the company to over 250 employees and implementing voluntary benefits at some of the largest employers in the country before selling it to a major brokerage firm who still uses their billing technology today. After selling the company, Tom was approached by Marsh (now Mercer) to help them with their sales of Voluntary Benefits to employers across the country. Today, he has been with Mercer for a total of 20 years.

As you can tell, Tom has an extensive career in our industry and has some of the largest employers and brand names as clients. We took the opportunity while writing this article to interview him to help him continue to share his knowledge and passion with others.

During your career, how have you seen the industry evolve and change?

Tom: When I first started in VB, we sold Group Auto & Home, Group Excess Liability, Legal, Long Term Care and some Life Insurance. Over the years, we’ve seen creative new products like: the online mall for discounts, Employee Purchase Programs, Pet Insurance, Identity Theft, Supplemental Medical Products, Dental, Vision, Part-Time Benefits, Life with LTC, etc., become key solutions in our marketplace.

I’ve also seen a tremendous influx of new carriers enter the market for each of these products.

Previously we had just a handful of carriers that were filed with the Department of Insurance as group products, and now almost every product has multiple carriers and vendors competing for the business.

The change with how employers feel about VB is probably the biggest evolving aspect, where these solutions have gone from nice to having to being a key part of the total benefits strategy for their employees. VB has also transformed from a somewhat isolated off cycle enrollment, to now being integrated into the core benefit strategy.

I’ve also seen the focus of VB change drastically.

When I started, it was not uncommon for the VB team to get the last 20 minutes of a meeting, which turned into the last 5 minutes due to the topics the client wanted to focus on. We would then have to rush through and provide collateral material for the employer to review later and perhaps set up another meeting or call. Now we are front and center, and employers understand the true value of VB as very important to the employees and impactful on retention, acquisition and overall job satisfaction and loyalty.

What are you the most passionate about when it comes to Voluntary Benefits?

Tom: There are two things that I tend to feel the most passionate about with regards to VB: 1. First is that we are really helping people during times of unexpected expenses and life events. I’ve spent a big part of my career at benefit fairs and open enrollment meetings and have heard firsthand the stories of how our products help people in real and impactful ways. One story I’ll share, was a woman who worked in the cafeteria of a hospital, who came up to me and shared that her husband had passed away unexpectedly during the year. She had purchased a Critical Illness plan but the claim was denied. She didn’t give it much thought and just thought it wasn’t covered. After a little research and a call with the carrier, we determined that it should have been paid, but the cause of death was communicated wrong on the claim form. I was able to reach her and let her know that she will be getting a check and while happy for her, it made me concerned about how other people may be entitled to benefits but perhaps didn’t fully understand the process and importance of the wording of the claim. It helped to drive me to make calls to carriers about improving communications in the claims process, because I also can’t stress enough what a difference that check meant to her and her family.

2. The other aspect I’m passionate about is Diversity, Equity and Inclusion (DEI) and continuing to see DEI evolve and create change in how we intentionally communicate and get educated about the disparities with ethnicities and underserved markets. I’m proud of starting the Mercer VB DEI Committee, which is flourishing and now also includes vendors to help contribute to ongoing change within the VB industry. We still have a long way to go, but I’m so encouraged by the response and enthusiasm with this important topic.

Tom is one of the classiest individuals I have had the pleasure of working with. In all my years in this business, I have never worked with a better person than Tom Farmer. He is what makes this industry special. He always does what is best for his clients. He is truly “ the best of the best”. – Jay Hutchins, Aflac

You have made an incredible impact on our industry. What accomplishments are you most proud of?

Tom: Thank you. That’s very kind. I would say helping to move the needle for VB to be viewed as an important aspect of the total benefits strategy for employers. I’m proud of this industry and have never hidden my enthusiasm for being a part of it and have loved speaking across the country at different events on the importance of VB. It wasn’t always easy, but little by little, we have been able to make our point and now we have an army of strong VB professionals who are proud of what they do and the value we bring to so many consumers across the country.

I’m also honored and humbled to have been elected to the VB Hall of Fame and recognized by my peers for contributions in the VB industry. I recognize the importance of the jobs I’ve helped to create by offering VB programs to many of the largest employers across the country. Having this recognition from your peers is a humbling experience. It is an honor to have HR leaders representing some of the largest and most visible employers in the country ask my opinion and advice; I’m proud about helping to drive change and make a meaningful difference.

I’m grateful for the relationships and friendships developed over the years with colleagues, vendors, and competitors. I have learned a tremendous amount from so many in this industry during my career. My philosophy is that when we win a new client case, be humble. When we lose, be gracious.

Where would you like to see the VB industry go from here?

Tom: I’d like to see the continued evolution of enhanced value, education and collaboration in the best interest of the client. Employers expect us to provide assistance and partner when we need to and create a strong program for their employees. I also would like to see brokers and vendors continue to be creative and not be satisfied with the status quo but look for ways to improve products through strong plan designs and education. Our focus should always be on making it as easy as we can for the consumers to enroll, have excellent service when needed, and pay claims when the time comes. We need to focus on the consumer and push ourselves to excellence in all parts of the process, and continue to discuss utilization and ways to connect more with consumers and clients so value remains high at both the employee and employer level.

What imprint do you hope to leave on the industry?

Tom: There is a famous quote that states, “People may forget what you say, they may forget what you did, but people will never forget how you made them feel.”

That quote rings true for me. I hope I have left a positive impact on my clients, colleagues, vendors, consumers and everyone else in the VB industry, that made them feel cared about them and what we are doing collectively to help people. If you are in someone’s life, even for just a fleeting moment, let it be a good moment. I hope I made people smile and left a positive image about our wonderful industry.

Once I announced my retirement plans, I’ve had people in the industry reach out and travel from all over the country to wish me well and thank me for what I’ve done for the industry and for their careers. I can’t even begin to express what that has meant to me and how humbled I am to have been given this wonderful gift of being on the other end of receiving these kind and heartfelt thoughts. Those are the greatest of gifts to receive, and I will never forget to share that same feeling with others who have meant so much to me and how important words are and the impact they have.

What will you miss most about working in this industry and any last words of wisdom?

Tom: I have been so fortunate to be surrounded by great colleagues my entire career. They are lifelong friends who I respect and admire, and I’ve learned something from all of them. My success in sales has been a team effort with working from within the infrastructure of the body of people that creates the presentations, proposals, answers the RFP’s, and customizing content and design based on my requests.

The brokerage, implementation, communications, call center, billing, claims and everyone related to customer service has played a role in allowing me to have a story to tell to prospects and clients. I will miss the people in all of these roles and am so appreciative and thankful for their help and dedication to excellence.

I have also been blessed with working with the best sales team anyone could ask for. The team at Mercer is truly one of a kind, and the support and kindness they have shown throughout the years will not be forgotten.

Tom is like the Godfather of VB. He was one of the original architects that got us to where we are today.

He fully understood early on how VB truly impacts employees lives and how to set customers up for success engaging their employees. Throughout his distinguished career, Tom has built hundreds, if not thousands of relationships and I can promise you, each person along the way remembers what he brought to the table. Tom also so generously helped many of us along the way. His patience, partnership and collaboration should be the roadmap for all that follow.

Customers don’t always remember what you tell them, but they do remember how you make them feel. We will always remember how Tom made us feel. Thank you Tom for your friendship, partnership and mostly for all the laughs along the way. - Leslie Young, MetLife National Accounts We are genuinely happy for one another’s success and happiness in work and life. Mercer has allowed me to work with some of the largest and most respected employers in the world. I took that responsibility seriously and tried my best to honor the brand and represent the company with integrity and professionalism. I have nothing but admiration and thanks to everyone at Mercer.

I will miss the chase of the prospect and that feeling when you do win the business. I will also always appreciate the lessons learned when we lost. I’ve felt that losing shows the true colors of someone and helps to shape you as a person and define your character.

My parting words of wisdom are to be engaged, continue to listen first and talk later, present in a conversational manner and balance your life with family and friends that make success meaningful and appreciated. My hope is for all those in the business to be proud of our industry and continue to make a difference in the lives of others as well as adding value to your own. Thank you to all who have contributed to my learning experience throughout my career.

As mentioned before, to know Tom Farmer is to look up to him as a great friend and human being. He has been married to his lovely wife Tina for 39 years in May of this year and they have two sons: Kevin is a BioMedical Engineer living in Southern California with his wife Jill and their first granddaughter Isla (who turned two in December), with another one on the way in August; and Brian, who lives nearby in Northern California, who has a bright future with Apple. Aside from spending time with his family, he is a die-hard Reds, Bengals and Sacramento Kings fan,

and enjoys golf, hiking national parks, pickleball, basketball, softball, traveling and going to sporting events or Presidential museums across the country.

He’s even written a children’s book.

As for what will keep him busy during retirement, Tom is looking forward to taking more walks with his wife Tina, and having more meals at home with her.

She has sacrificed so much during his career and always supported him with travel and meetings and so a big part of his retirement will be spent enjoying the simple things in life with her, including being more spontaneous to get on a plane or take the 6hour drive to see their beautiful granddaughter (and her sibling on the way). You’ll also be able to find him volunteering in the community and coaching with the Special Olympics or working on his next children’s book. He’s also planning on seeing every stadium in one season and using that as an opportunity to visit with friends around the country that share his love for the game.

For the past 16 years, Tom has been a mentor, friend and colleague to me, colleagues at Mercer and peers within the industry. Through his passion and personal character, Tom has worked to drive change and positive impact, especially regarding diversity, equity and inclusion (DEI) efforts. Tom reached out to me 3 years ago after George Floyd passed away and said “Jess, we have to do something, we can no longer sit back and be idle, we have to do something to help.” Tom’s passion, drive and leadership are unmatched in the insurance industry — truly making the world a better place. We wish him the absolute best in retirement and will continue his legacy and DEI efforts on! – Jessica DePhillips, Mercer It is no coincidence that this feature on Tom Farmer is in the Ethics edition of this publication. Tom is someone that has always strived to do the right thing for his clients and policyholders during his career and his impact has helped to shape our industry into what it is today. His contributions have helped to bring Voluntary Benefits to the forefront of the Benefits industry and have pushed all of us to challenge the status quo for the benefit of the end user.

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INSERT YOUR COMPANY NAME HERE Advertise in the Voluntary Benefits Voice Magazine Link Your Events in our Calendar of Events ($50) List Your Company & Contact in the Directory of Services ($100) Sponsor a Speaker Series Event Contact heather@voluntary-advantage.com for more information!

What is Minimum Essential Coverage (MEC)?

By Philip Cannon, Evolved Benefits The concept of Minimum Essential Coverage (MEC) was established by the Patient Protection and Affordable Care Act (ACA) in 2010. The ACA, also known as Obamacare, was a comprehensive healthcare reform law that aimed to improve access to healthcare and make it more affordable for Americans.

The MEC provision of the ACA mandates all health insurance plans to offer essential health benefits, ensuring access to basic healthcare services for all Americans regardless of their income or health status. Although MEC plans generally cover preventive care such as annual check-ups and vaccinations, they may not include other critical healthcare services such as prescription drugs, maternity care, mental health services, and hospitalization. This can be problematic for individuals requiring these services, as they may need to pay out-of-pocket.

However, it's important to note that MEC plans were never intended to replace Major Medical plans, but rather provide a more affordable healthcare option.

MEC plans can be particularly appealing to groups with limited financial resources that may not be able to afford more comprehensive health insurance coverage. For example, if you work part-time or in a temporary position, you may not qualify for employer-provided health insurance or even individuals with limited financial means who are not about to afford Major Medical coverage, could consider a MEC plan as a viable alternative.

In addition to preventive care, MEC plans now offer access to a range of essential health services, including primary care, specialty care, behavioral health, urgent care, and prescription drug coverage.

By providing employees with access to these critical health services, many MEC plans can help promote overall health and wellness, making them a valuable starting point for those looking to improve their healthcare coverage.

MEC plans can be an attractive option for groups seeking a cost-effective way to provide some level of healthcare coverage to their employees. To achieve this, we can identify suitable employers within industries that often employ part-time, seasonal, or low-paid workers. These industries are particularly relevant as they tend to have a higher proportion of employees who may not have access to traditional full-time employment benefits, making them an ideal target for MEC solutions. Some examples of target rich industries for MEC plans include: Security Hospitality Landscaping Staffing Trucking Assisted Living Facilities Housekeeping/Janitorial Agriculture/Ranching

Construction Manufacturing Plumbing Restaurants Grocery Stores Home Healthcare Cannabis

If you’re an employee benefits advisor, there are key features to a MEC plan you should understand before presenting the plan to your clients including: administration, compliance, and financing. These are often overlooked, but are also the main source of misrepresentation of MEC plans in the market. This is problematic because MEC plans are frequently offered to companies with high turnover rates. If the third-party administrator (TPA) does not have adequate systems in place to handle the high volume of additions and terminations, it can result in poor customer service on both the group and employee levels. It's crucial to work with a TPA that has the necessary infrastructure and expertise to manage the administration of the plan efficiently and effectively. By doing so, you can ensure that the plan meets the needs of your clients and their employees.

As previously noted, MEC plans offer limited coverage and may not fully protect employees from out-ofpocket expenses related to uncovered services.

However, as benefit advisors, we can help mitigate this exposure by offering various worksite benefits that can be paired with MEC plans to create a more comprehensive solution. By leveraging these additional benefits, such as hospital indemnity insurance, critical illness insurance, accident insurance, or short-term disability insurance, we can provide employees with a more well-rounded solution that helps them manage the financial impact of unexpected healthcare expenses. This approach not only helps protect employees but also demonstrates our commitment to providing a comprehensive benefits package that meets their unique needs.

Benefit advisors today face significant challenges related to compliance, as regulations and healthcare laws are constantly evolving. Compliance with the ACA is a major concern for MEC plans, and TPAs are responsible for ensuring that the plans meet ACA requirements. Failure to comply with these regulations can result in penalties and legal issues.

When choosing a TPA that offers MEC plans, here are some key factors to look for: Compliance expertise: The TPA should have a deep understanding of the Affordable Care Act (ACA) and be able to ensure compliance with its regulations.

Strong customer service: A good TPA should have excellent customer service and be able to provide support to clients and their employees.

Robust technology: The TPA should have a reliable and efficient technology platform that can handle a high volume of additions and terminations.

Flexibility: The TPA should be flexible in their approach to plan design and administration, allowing for customization to meet the needs of the client.

Financial stability: The TPA should have a strong financial position and a solid reputation in the industry.

Experience: The TPA should have a proven track record of administering MEC plans and a deep understanding of the healthcare industry.

Network of providers: The TPA should have a network of healthcare providers that can offer affordable care to participants in the MEC plan.

Having a thorough understanding of the financial responsibilities associated with MEC plans is also crucial when considering them for your clients. MEC plans are self-funded solutions at their core, which means that a portion of the premium is dedicated to funding claim management. TPAs are responsible for managing claims and ensuring that they are processed correctly and promptly. Poor claims management can result in delayed payments to providers or even denied claims.

At the end of the policy year, the TPA will "true up" the claim funding account for the employer, and if there is a deficit, the employer will be responsible for covering the difference. This can be challenging for employers, as it's difficult to budget for unforeseen expenses.

To help mitigate unforeseen exposure for groups with traditional self-funded MEC plans, TPAs can use stoploss policies to cover any additional deficit generated outside the claim-funded account. It's important to note any specifications or aggregate limits that would be the group's responsibility before these policies would kick in and cover the excess. Additionally, some TPAs have introduced captive arrangements as a form of self-insurance for a group of entities or a single entity to insure against a specific risk. Obtaining appropriate documentation is crucial to legally establish and ensure the effectiveness of such arrangements, thereby protecting the interests of the group. However, some TPAs may falsely claim to have included these provisions, putting both the benefit advisor and the group at significant legal and financial risks.

In today's tough job market, especially for smaller employers who may not have the resources to offer more comprehensive health insurance plans, MEC plans can be a good tool for employers to help retain and recruit employees. By offering a MEC plan, employers can avoid penalties for non-compliance and provide their employees with basic health coverage, which can help improve employee health and wellbeing, reduce absenteeism, and increase productivity.

Benefit advisors who adopt MEC plans and understand how to integrate them properly into their clients' benefits offering can unlock opportunities for organic growth by reviewing their current block of business and assessing the entire group population. This approach not only enables benefit advisors to identify potential gaps in coverage and recommend suitable solutions but also helps protect their most valuable clients from competing brokers.

Furthermore, offering MEC plans as part of a comprehensive benefits package can differentiate benefit advisors from their competitors and position them as trusted advisors who are invested in their clients' long-term success.

Employers are increasingly looking for benefit advisors who can be creative and innovative in designing benefits solutions that meet the diverse needs of their employees.

In summary, there is a growing demand for MEC plans within the employee benefits world, and benefit advisors who can leverage them effectively have the potential to unlock new opportunities for growth, retain valuable clients, and provide a more comprehensive benefits package that meets the needs of their clients and their employees.

Philip Canon is Founder & Managing Partner of Evolved Benefits, a specialty General Agency that provides nationwide consulting and plan configuration to meet your needs and the needs of your clients—especially in niche markets. They specialize in Minimum Essential Coverage (MEC), Government Contractors and HCSO. Philip has dedicated his career to serving the employee benefits community and is known for developing products that become high performers in underserved markets.

Voices of Voluntary Benefits XXX

By Michael Naumann

This publication is titled “the Voluntary Benefits Voice” because our goal is to share the voices of Voluntary Benefits leaders across the industry to help us grow both in our own practices by learning from one another, but also as an industry. We try to share insights from a diverse set of leaders and entities across the country in each edition and in that spirit, Michael Naumann, VB RPL at Reliance Matrix, has interviewed several VB Leaders from different brokerages. Here is what they had to say about employer funding of traditionally “voluntary” benefits and where the market is going.

Michael: What trends in the industry are you seeing around employer funding of Voluntary Benefits?

Lorrinda Lattimore, VP, Sr. Consultant, Voluntary Benefits & HR Technology, Lockton: Funny question isn’t it… if it’s employer-funded, then is it still called Voluntary Benefits? There is a higher interest from clients and unlike in previous years, I am seeing clients take action on funding certain plans.

Allysa O’Donnell, Senior Advisor, Supplemental Insurance Professionals: We are seeing a trend around employer funded voluntary plans, particularly when an employer switches to an ICHRA model. Switching to an ICHRA can save a lot of money for employers and they are using the savings to then completely fund dental, vision, disability, etc.

Leah Govedarica, Director of Voluntary Benefits Strategy and Development, Alliant Insurance Services: Employer funding is growing in popularity, especially last year when employers were competing against one another for talent. While this is not a new trend, we did see an uptick in employers exploring the option of funding an Accident, Critical Illness, or Hospital plan for those enrolled in a High Deductible Health Plan. We also saw an increase in funding products like Identity Protection and Legal.

Employers found that by funding these types of plans, they were able to provide employees with peace of mind and/or resources during a time of need, at a budget friendly price point.

Accident + Critical Illness + Hospital Indemnity

Michael: Where do you want to see the Voluntary Benefits industry go?

Brett Daniel, Assistant Vice President, W/SW Region, Consumer Benefit Solutions, AON | Health Solutions: Based on current trends, industry developments, and my personal experience, there are a few key areas I would like to see the Voluntary Benefits industry potentially go: Increased use of technology: The Voluntary Benefits industry could see increased use of technology to enhance the benefits experience for employees, such as offering online enrollments, mobile apps, and virtual benefits fairs.

Greater focus on wellness: The industry could place a greater emphasis on benefits that support physical, mental, and financial wellness, including wellness programs, wellness incentives, and telemedicine services.

Personalization: The industry could evolve to offer more personalized benefits options, allowing employees to choose the benefits that are most relevant to their individual needs and preferences.

Increased collaboration with employers: The industry could work more closely with employers to develop customized benefits packages that meet the unique needs of their employees.

Greater transparency and simplicity: The industry could aim to provide greater transparency and simplicity in the benefits selection process, making it easier for employees to understand their options and make informed decisions.

Integration with other benefits: The industry could work towards integrating Voluntary Benefits with other benefits, such as retirement plans and health insurance, to create a more cohesive and comprehensive benefits experience for employees.

The industry could work towards integrating voluntary benefits with other benefits, such as retirement plans and health insurance, to create a more cohesive and comprehensive benefits experience for employees.

Brett Daniel Lorrinda Lattimore, VP, Sr. Consultant, Voluntary Benefits & HR Technology, Lockton: Keep evolving.. we are going backwards if we aren’t listening, learning and growing.

Shawn Ferguson, National Senior Vice President, Director of Voluntary Benefits & Product Development, Acrisure: Supplemental Health Benefits need to be considered more often with core medical and funding strategies. Employees need help from their employer to guide them in the direction of covering more 1st dollar risk exposure.

Pre-and post-enrollment communication needs to be front and center. Guidance, whether in person, call-center, or Decision Support, needs to be provided to all employees at every OE. We need to realize that Benefit Election/OE is the most important investment/financial decision that most people will make over the course of the year.

Lifestyle products finally have a place on the core platform and are becoming a greater part of the employee benefit strategy. Offering products that span the employee’s life stages and life events will continue to be essential in addressing the needs of a diverse workforce.

Susan Elder

Susan Elder, Voluntary Benefits Practice Leader, Strategic Non-Medical Solutions, Brown & Brown: Voluntary Benefits were once an afterthought, a “nice to have”. The mindset around VB has been shifting for years. While it is nice to see the voluntary benefits program, particularly the supplemental medical products become table stakes to attracting and retaining employees in a tight labor force, until we reach the point that these products are elevated and discussed alongside core and are part of the decision tree, we have work to do.

We must continue partnering with carriers to deepen the claims integration process until we reach the point it is truly a touchless, seamless employee experience.

Financial transparency is an absolute necessity – the broker/consultant must be willing to hold tough discussions with clients and carriers alike to facilitate loss ratio monitoring and appropriate rate action as a continual discussion.

Lifestyle products finally have a place on the core platform and are becoming a greater part of the employee benefit strategy. Offering products that span the employee’s life stages and life events will continue to be essential in addressing the needs of a diverse workforce.

Much appreciation and gratitude to the Voluntary Benefit Practice Leaders for offering these insights. When actionable and applicable knowledge is shared within our community, we can expand our expertise and drive positive change. I'm looking forward to sharing additional interviews in upcoming editions as we grow and become stronger together.

Brett Daniel, Assistant Vice President, W/SW Region, Consumer Benefit Solutions, AON | Health Solutions: is a Mid-Market Lead Consultant for Voluntary Benefits & Enrollment Solutions within Aon’s Health Solutions practice.

In this role he is responsible for empowering results for AON clients through innovative and effective voluntary benefit strategies and enrollment solutions.

Lorrinda Lattimore, VP, Sr. Consultant, Voluntary Benefits & HR Technology, Lockton: is responsible for leading Lockton’s Voluntary Benefits and HR Technology specialty practices for the Pacific Series.

Leah Govedarica, Director of Voluntary Benefits Strategy and Development, Alliant Insurance Services: her team provides dedicated support and expertise in reviewing and implementing Voluntary Benefit programs.

Susan Elder, Voluntary Benefits Practice Leader, Strategic Non-Medical Solutions, Brown & Brown: is responsible for all aspects of Voluntary Benefits for Brown & Brown, Strategic NonMedical Solutions including product initiatives, support of sales and client services as well as leading the VB consultant team.

Allysa O’Donnell, Senior Advisor, Supplemental Insurance Professionals: SIP is a Specialized General Agency that partners with medical brokers for all ancillary needs including all education and enrollment as well as postenrollment servicing needs.

Shawn Ferguson, National Senior Vice President, Director of Voluntary Benefits & Product Development, Acrisure: is responsible for helping Acrisure’s 600+ locations across the US to implement successful VB strategies. He has operated solely in the VB and enrollment segment of the industry for the past 15 years.

Michael Naumann, Worksite Practice Leader (Western US) for Reliance Matrix.

Michael Naumann has over 23 years of diverse experience across employee benefits, enrollment solutions, affinity-based programs and third party administration. At Reliance Matrix, Michael creates sales and marketing strategies to accelerate worksite growth, drives business development, and influences product development.

Everyday Ethics Saying “No”

By Hunter Sexton, JD, MHA Compliance Counsel, Sydney Consulting Group Saying “no” can be difficult.

It’s especially anxiety inducing in the context of business, where the expectations and incentives of delivering the “yes” can feel overwhelming. This is a quintessential ethical conundrum: doing the right thing because it’s the right thing to do. Delivering the “no” when it’s the right answer to deliver, despite the pressure to do otherwise, is what we explore here in the context of working with industry partners.

Saying “no” to clients We begin with perhaps the hardest “no” of them all: saying “no” to a client. After all, as the saying goes, “the client is king” and declining the sovereign has historically been a fatal mistake. So, why risk a trip to the proverbial gallows? Because delivering the hard news is partly why you’re engaged in a business relationship in the first place. Anyone can be the “yes man,” agreeing to all manner of unsubstantiated notions their client may possess, and nodding along to preposterous plans of action. But the valuable partner is the ethical one. The ethical partner is unafraid to challenge a client when their positions demand it rather than merely “going with the flow.”

Saying “no” to brokers Delivering a “no” to a proven broker can be as gutwrenching as it is with clients. It is more often than not brokers driving the success (or lack thereof) of a new plan’s introduction into the market. Brokers understand their bevy of options for partnership and thus where one partner can’t provide, the partner is more often than not replaced. So, saying “no” may leave you in the lurch with powerful and influential brokers.

And yet, we urge readers to deliver the “no” when it is right to do so. Overpromising your distribution channel what a plan is capable of, or its attractiveness in a given market, is a sure-fire way to erode a reputation and fracture a productive business relationship. And so, even where one risks a short-term opportunity with a broker, we urge our readers to think critically about the ethical implications and ramifications of an expedient path.

Saying “no” to regulators Declining a government regulator is another frightening prospect for most. This trepidation is well founded as regulators have special authority to disrupt your business and, should you be so unlucky as to draw their ire, these disruptions can be devastating.

That said, deference to authority for the sake of authority itself is both unethical and unwise. Unethical in the sense that law is concerned chiefly with compliance, never obedience. Acquiescence to a legal position merely because the position is espoused by a government entity is problematic, as this methodology does not inquire into the substance of a rule, but rather, is only concerned with who espouses the rule. Such deference is also unwise as it emboldens regulators to claim greater authority to intercede in contractual relationships between carriers and the individuals and groups they insure.

Remaining firm and declining to adhere to “deskdrawer” rules unexpressed in the actual law of a jurisdiction is the more ethical route, albeit the more difficult one.

Practical implications of “yes” Theoretical discussion aside, compliance professionals experience no dearth of “. . .what’s the harm, let’s just do this, business is on the line. . .” highpressure moments in our daily lives. Forthrightly, the response to the chorus of consternation is wound up in the potential damage that may be done to personal and business-wide reputations and relationships due to State enforcement and disciplinary actions. The public record is littered with cautionary tales where decisions to disregard ethical considerations, whether through mundane disinterest or malicious defiance, result in quite negative outcomes. For the reader interested in a journey through someone’s very worst day, one can look to New York’s Insurance Disciplinary Action Summaries page. There, those so inclined will find a record of fines ranging from $1,000’s to $1,000,000’s, revocations of licenses, suspensions of the ability to do business, and everything in between. Of course, New York is not alone in policing ethical failures. Such records are abundant among state regulatory bodies.

In one example, a very large carrier acting over the course of several years failed to file and obtain approval of certificate forms covering thousands of individuals insured under an out-of-state association group. The state of residence for the covered individuals expected compliance in order to ensure appropriate consumer protections were in place. The penalty for this violation was substantial, including a hefty fine and halting the offering of the plan in-state.

It is quite a simple thing to imagine the conversations that may have happened to push for accommodating the business. Whether the shortcoming was deliberate or otherwise, the answer in this case was “yes,” when there ought to have been thoughtful challenges to the filing strategy.

The implication here is not that every case is evidence of the existence of a “bad actor.” Many of the decision-makers in the aforementioned examples could have simply been misinformed or left to their own devices. Still others must have weighed the alternatives and succumbed to the allure of success or the avoidance of acute pressure.

Nevertheless, ethical considerations need not be so granular and specific. Countless of these cases may simply illustrate the fact that real ethical concerns can be as ordinary as questioning whether there ought to be a baseline understanding of the repercussions of what can and cannot be done.

Our ethics are challenged on a daily basis, and having to say “no,” deliver unsavory news, or taking costlier strategic directions are amongst the most difficult of these challenges. Yet, it is imperative that we do so. For our clients, business partners and regulators, we must routinely summon the courage to deliver the integral and ethical “no.”

Hunter Sexton is a Compliance Consultant with Sydney Consulting Group, LLC. Hunter leads a best-in-class Regulatory Compliance Team that works with carriers and regulators to bring supplemental health and life products to market. Hunter earned his Masters in Healthcare Administration from the University of South Florida’s College of Public Health and his Juris Doctorate from Stetson University’s College of Law. Hunter came to Sydney Consulting after 12 years of industry experience with major medical carriers that included sales, marketing, plan operations, and finance.

The Formula for Finding The Right Person

By Steve Clabaugh, CLU, ChFC One of the key principles found in Jim Collin’s classic book “Good to Great” for becoming a great company, is that of finding and placing key employees in their most effective positions. He called this “getting the right people in the right seats on the bus.” While we might all agree with his premise, the challenge comes in determining who are the right people, how we recruit them, train them and support them in achieving their highest and best work. It’s tricky and messy to be sure.

While finding (or becoming) the right employee is always going to be challenging, I learned a formula many years ago that can help in evaluating and selecting the right person. It can also help you analyze whether a particular position is the right one for you.

Talent x Relationship = Productivity Talent is defined as: the capacity for a near perfect performance.

Relationship is defined as: the ability to trust that each of the parties is committed to acting in the best interests of the team.

Productivity is defined as: the measured results of the team compared to the goals of the organization.

Assign 0 to 10 points for each category representing the likelihood of a positive outcome for the hire. The perfect candidate (who does not exist) would have a 10 for Talent and a 10 for Relationship, resulting in a 100% likelihood that this is the exact right candidate for this position. While a perfect score is literally impossible, it is helpful in setting an acceptable score range when considering candidates. Averaging the scores of several interviewers helps improve the accuracy of the evaluation. We found it best to only consider candidates who had a score of 60 or above with a preference for those above 70.

Here are some examples of cases where we missed the mark and one where we hit a real home run. As I said, it is not a perfect formula – just a helpful one .

CJ’s Story I was very excited when CJ (not her real name) agreed to join our organization. We had worked well together, as peers, at a former employer and enjoyed some good successes. Our working relationship had been very positive and, I knew, she understood the position and was extremely qualified to excel in it. My expectation was that she would help us take the business to a new and higher level than we had ever achieved. My disappointment, when she abruptly quit less than 6 months later, more than equaled my initial excitement.

In preparing our annual plan and budget for the upcoming year, we asked our top leaders from each department to work together so that plan and budget for IT, Administration, Underwriting, Accounting, Customer Support and Administration all supported the goals of Sales and Marketing. As a group, these leaders would present their proposed plan for the next year together to me and our CFO. Based on our feedback plus that of the entire group they would each go back and refine their plan which they then presented for our approval.

As it turned out, CJ resented having to report to me at all and having to receive my approval of her plan and budget was more than she was willing to endure. Some of her fellow officers reported that she was very angry following our meetings and questioned “who does he think he is to question our plan and budget requests?"

Real world score (unfortunately done after the fact): Talent (8) x Relationship (1) = Productivity (8).

Frank’s Story Frank (not his real name), was a different story with the same result. Following a series of successful job performances resulting in advances in position and responsibility at his prior employers, we felt he was ready for promotion to an officer level opening with us. He seemed to be an immediate fit for our work culture and was universally liked by the entire staff.

Unfortunately, it turned out that he was not up to the level of job performance we needed for a very critical role. The job required the ability to make tough decisions related to hiring, supervising and evaluating his direct reports. The measurable results of the entire department moved consistently downward; which resulted in a negative impact on the other departments. When our senior officers and I discussed the situation, we came to the very painful decision that a change was necessary. We moved Frank to a different position better suited to utilize his skills without the requirement for difficult decision making. Less than a year later he decided to accept a position with a different company.

Real World Score (unfortunately done after the fact): Talent (5) x Relationship (9) = Productivity (45) William’s Story We took our time before offering a position to William (not his real name). He looked to be a very promising candidate from the first interviews. He had been quite successful in his prior employment in an industry very different from ours.

We could see that he possessed some outstanding qualities and had a tremendous positive desire for success. The fact that he had no experience in insurance, however, was a major concern we needed to address.

The position we were hiring required a great deal of persistence in developing successful relationships with insurance brokers and then helping them sell worksite benefit solutions to their employer clients and ultimately to the employees themselves. In addition, he or she would need to develop an extensive knowledge of a variety of products offered by multiple carriers. The wrong hire could result in a negative impact on our growth and profitability.

By the time we offered him the position we had results from senior staff, department heads, administrative and clerical staff and even a couple of our top brokers. When we offered him the position, we accepted that he would require a great deal of time, energy and expense. We also felt like we had the beginnings of a working relationship that would make the investment pay off. It did for our company then and for the industry even today many years later, as he is a nationally recognized leader in voluntary benefits.

Real World Score (prior to hiring): Talent (8) x Relationship (9) = Productivity (72).

Hopefully, this formula and these examples will give you a tool you can use to help find the right people for the right positions in your organization. It has been successful for many organizations and is just as helpful for job candidates as they consider whether a particular opportunity is right for them.

Steve Clabaugh, CLU, ChFC started his career in insurance as a Field Agent, moving on to a Sales Manager, General Manager, Regional Manager, Vice President, Senior Vice President, and President/CEO. A long time serious student of professional leadership, Steve created the Relational Leadership program that has been used to train home office, field sales associates, mid-level managers, and senior vice presidents.

Industry Updates Voya acquires Benefitfocus

Trustmark brings flexibility, simplicity to the challenge of care with new Trustmark Life + Care® product Amidst a rising need for care, the future can seem uncertain. Now, it no longer has to.

Launched in 2022, Trustmark Life + Care is a new permanent life insurance solution that delivers a muchneeded answer to employees’ need for care benefits.

With simple administration, guaranteed benefits and premiums and the flexibility to receive care on employees’ terms – it’s time to take charge of tomorrow.

No one knows when you might need care or what form of care you may require. With Trustmark Life + Care, certificate holders have the flexibility to control who provides care, for how long and how benefits are received with the ability to switch between professional and family caregiving.

By offering guaranteed rates and benefits along with guaranteed issue underwriting, insurance brokers have an easy-to-administer product that lets them offer valuable care benefits to a wide range of employees at a time when the need has never been higher.

To learn more, visit trustmarkvb.com Trustmark Voluntary Benefits provides innovative voluntary benefits that help policyholders achieve greater financial security. Employers offer these benefits to help round out their benefits protection and help attract top talent to increase workplace satisfaction. With more than 100 years of industry experience, Trustmark has the expertise to provide clients with complete benefit solutions that simplify the lives of employers while providing much needed protection to their employees.

Trustmark and Trustmark Life + Care are registered trademarks of Trustmark Insurance Company. Benefit, definitions, exclusions and limitations may vary by state.

On Jan. 24, 2023, Voya completed its acquisition of Benefitfocus, Inc., an industry-leading benefits administration technology company that serves employers, health plans and brokers. The transaction accelerates Voya’s workplace-centered strategy and increases the company’s capacity to meet the growing demand for comprehensive benefits and savings solutions at the workplace. Benefitfocus extends Voya’s workplace benefits and savings reach and capabilities by providing benefits administration capabilities to 16.5 million individual subscription employees across employer and health plan clients

PPLSI Enhancements for IDShield plan for prospects with 200+ eligible (2023 or 2024 effective dates): Cryptocurrency wallet monitoring Financial account transaction and subscription tracking Enhanced credential monitoring Enhancements for LegalShield plan for the 2024 plan year for prospects with 200+ eligible: (Note due to filing this is only for 1/1/24 effective date cases) Elder Law Matters/Estate Planning Complex will preparation for elder parents Probate education Family Law Matters Document preparation for reproductive matters Representation for reproductive matters including embryo egg donation/adoption and suit of ownership* Up to 30 hours of support for divorce, child custody and enforcement and modification of a support order* Pet protection Gender rights LegalShield coverage enhancements are not retroactive and are effective 1/1/2024. *Representation for coverage is only available with LegalShield’s Enhanced Family Plan.

Copyright 2023 by Voluntary Advantage, LLC. All rights reserved. No part of this magazine may be reproduced in any form without consent.

The Voluntary Benefits Voice is published monthly in digital format only by Voluntary Advantage, LLC. Subscriptions are available at no cost by subscribing at www.voluntary-advantage.com.