When it comes to benefit enrollment, which method is best?

By Adam Stohlman

Stohlman Financial Services, LLC

With all of the products, carriers and enrollment systems available in the group benefits market today, it is critical that we, as advisors, consider all alternatives in determining which best fit our clients' needs. In regard to enrollment systems, specifically, to know which is best, we need to know what is offered, how well it will work with the products we are selling, and how well it will mesh with the requirements of the carrier involved. At the same time, of course, and of the same importance, is the question of how well it will integrate with the program or programs our client may already have in place. In short, the question we should always be asking when selling group benefits is, "What type of enrollment system will work best for all concerned?"

In researching this topic recently while seeking to purchase or develop my own system, I came across some very interesting studies. Though I will discuss them in summary here, so as not to infringe on any copyrights or proprietary material belonging to others, it is my hope that fellow advisors working in the group benefits area will find the information I gleaned from these studies to be instructive.

The first piece of information is that there seems to be a real disconnect between agents and brokers, as well as other benefit professionals and HR/Administrators, in regard to what they consider the most effective enrollment methods versus the enrollment methods they actually use. The surveys and reports I have read make it plain that a great majority of HR/Administrators feel that group meetings are the most effective means of enrolling group members in benefit plans. Individual sessions with a benefits advisor seem to come in second, and online enrollment comes in a very close third. At the same time, however, these same two populations repeatedly state that online enrollment is the method they utilized most, and by a margin of more than two-to-one over individual sessions with a benefit advisor, which is the method they actually seem to utilize least.

The second piece of information is that, in similar surveys of brokers and financial advisors themselves, group meetings and individual sessions are both considered the most effective enrollment methods, and by similarly large majorities. Online or Web-based enrollments come next, and again with similar ratings. Amazingly, in our modern age, paper enrollments still seem to come in as a fairly strong fourth. Unlike HR/Administrators and other benefit professionals, however, what advisors consider the most effective means of enrollment is actually the one most utilized. Group meetings are the method most often used for enrollment by more than two-to-one over online enrollment in most studies. Not surprising from the producer standpoint, however, is that individual sessions and paper methods come in much further down the list than their initial "effectiveness" ratings indicated.

So, what does all this mean? Again, it should be noted that this is not a scientific analysis, but rather a summary of information from a number of studies and surveys reviewed by this writer in researching this particular topic. Nonetheless, what I have discovered does provide information that may be helpful in determining the best method to utilize for group benefit enrollments, and it may not be far off the mark from what a large, scientific study might find. Moving on to what this information means, it is clear that while group meetings and individual sessions may be considered ideal by both HR/Administrators and advisors, they simply are not the most practical or beneficial for all parties concerned. Instead, from both a business efficiency standpoint and a sales standpoint, it is online enrollment that makes the most overall sense.

Why? Online or Web-based enrollment is already the method most utilized by HR people and benefit professionals in survey after survey, and as a result, it is the method already most familiar to them. Likely, this is because online enrollment is by far the most inexpensive, time-saving, convenient, complete, and least error-prone method of conducting enrollments of any of the methods available today. Most current online enrollment systems can integrate with or at least compliment many existing employer's or group's existing HR systems (or provide them with a system if they do not already have one). Some of them also can accommodate the products and underwriting requirements of many different carriers simultaneously in one simple system, and consequently can be easily administered, monitored and reported from by all parties to the enrollment.

From the client standpoint, this means that online enrollment saves the employer, association, or group time and money in both the enrollment process itself and in correcting errors or problems afterward (since they arise far less often). It also makes changes and life events much easier to handle. Further, it is extremely convenient for communicating benefits information to all group members, setting up enrollments, and giving members the opportunity to enroll from work or home, 24/7. Further still, while it may be that participation rates and per-member sales is a bit less than group or individual meetings might provide, online enrollment still provides the next highest participation and sales rates compared with any other method, according to many studies -- probably due to the convenience factor. And beyond all of these advantages, online enrollment is also the least costly method of enrollment, in real terms.

From a producer or advisor standpoint, while online enrollment still provides relatively high participation and sales rates, it simultaneously saves us as advisors a tremendous amount of time per group benefit sale in regard to the enrollment process itself, monitoring of enrollments, dealing with ongoing administration issues, and handling subsequent enrollment errors. This then allows us as to use that time savings to make more actual group benefit sales, increasing income versus time spent per sale while also increasing our presence in the marketplace and our opportunities for referrals and future sales.

Out of all the studies and surveys reviewed, the data seems clear. Whether an advisor chooses to use just one carrier's online enrollment system and to be bound by that system per sale (not the most efficient or profitable choice, in this writer's opinion), or chooses to use an independent online enrollment system that allows an advisor to wrap around virtually any pre-existing benefit plan and sell virtually any carrier's products, core, supplemental or voluntary, (the ideal and most profitable scenario), online enrollment offers the most advantages of any enrollment method available today, and therefore should be considered the best enrollment method for all concerned.

Copyright 2010 by Adam Stohlman All rights reserved.

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