Brokers’ Private Exchange Sales Remain Low While Voluntary Benefit Sales Rise

Sixty percent of brokers (including employee benefit brokers, traditional voluntary brokers, and enrollment companies) who took part in a recent survey are selling more voluntary benefits today, up from 53 percent last year, and they attribute much of that to the Patient Protection and Affordable Care Act (ACA), according to data released by Eastbridge Consulting Group, Inc., a marketing advisory firm for insurance and financial services organization And, 18 percent of brokers said that now they are selling “significantly more” voluntary benefits, (including accident coverage, pet coverage, ID theft coverage, and critical illness coverage) and many say it is the implementation of the ACA that is forcing them to focus their business on voluntary products.

Private exchange sales for brokers are low. The results of the joint survey between Eastbridge and Benefits Selling were published in the Brokers and Voluntary Benefits-2014 Spotlight Report by Eastbridge, and show that, although private exchanges have been aggressively promoted, along with defined contribution strategies, brokers are not rushing their clients to use these approaches to benefits. Private exchanges were reported to be suggested by brokers less than 5 percent of the time, although large-case brokers are more likely to recommend them, along with a defined contribution approach, than are smaller-case brokers.

Eastbridge also states that actual implementation of private exchanges has a low success rate, even among large-case brokers. Also, a defined contribution approach is often not included when private exchanges are recommended, and a majority of respondents to the survey said that a defined contribution approach is included less than 25 percent of the time.

Eastbridge concludes that adoption of both private exchanges and defined contribution approaches may just be a matter of time, but says that its latest report “suggests that time is not now.”

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