Media room

January 5, 2004

Fortis Benefits delivers new voluntary model for emerging growth segment

KANSAS CITY, Mo. - Fortis Benefits, recognized as a market leader in voluntary dental, has reinvented its voluntary business model to better meet the needs of employee benefit brokers, employers and employees. While dental continues to be a lead product, the new model is not product centric, but instead focuses on simplicity, value, execution and communication.

Michael Peninger, president, Group Nonmedical at Fortis Benefits, said the company had to alter its perspective on voluntary benefits.

"To build a business model capable of serving the needs of our chosen segment, we could no longer think of voluntary as a product line," Peninger said. "Instead, we now think of voluntary as a business in its own right. It is a dedicated focus on this voluntary framework that will keep our products and services state of the art for the long term."

The change in approach is due to Fortis Benefits' perspective that employee benefit brokers, who have not been as involved in the double-digit growth of the past decade, will be responsible for significant growth in the future.

"We talked to a lot of employee benefit brokers before we designed this model," said Neal Lucchi, vice president of Voluntary Marketing. "Everything we are doing is designed to meet the needs of our chosen broker segment and their clients."

A “voluntary” benefit refers to insurance coverages and other benefits – such as life, dental and disability insurance – sold to employees at their workplace. These benefits have surged in popularity in recent years because they are widely viewed as a “win-win” proposition for both employers and employees, particularly in trying economic times.

Many employers have embraced voluntary benefits as costs for basic medical insurance have soared, because it allows them to continue to offer a full benefit package to valued employees while keeping benefit costs manageable. Employees can choose products and coverage levels that fit their needs, and pay for those coverages at affordable group rates through convenient payroll deduction. As a result, employee benefits are evolving from a mostly employer-paid system to an employer-employee partnership.

Lucchi noted that a host of factors may have prompted employers to begin to implement voluntary programs, but the likelihood of employers' continued interest in the future will be impacted by their choices of carrier. "Human resource managers are not happy when the payoff for putting in a voluntary program is an administration nightmare," Lucchi said. "Our model is designed to take those concerns off the shoulders of human resource professionals who are constantly being challenged to do more with less."

Fortis Benefits allows brokers to offer a total package of voluntary benefits from one company, with simple and seamless enrollment, administration, billing and customer service. This approach works for brokers because it enables them to recommend a carrier they can rely on to deliver what customers want. Employers can win by reducing overhead and distractions while delivering greater employee benefit impact for little or no increase in cost. Employees will appreciate access to quality products, Fortis Benefits' commitment to customer service and reputation for prompt and courteous claims handling, along with the built-in advantages of workplace purchases, such as guaranteed eligibility for coverage.

“What we're offering is essentially an affordable, reliable turnkey consultancy in voluntary benefits,” Lucchi said. As a result, Lucchi said, the company expects to see many brokers and employers who have avoided the category in the past begin to embrace voluntary benefits.

A key part of the new voluntary effort will be research and development that will allow Fortis Benefits to modify the voluntary package on an ongoing basis in response to marketplace developments, so that it will always remain state of the art.

“The trend toward voluntary benefits is a product of social, economic and regulatory changes that have made the benefits environment something very different from what it was even 10 years ago,” Lucchi said. “Those changes will continue, but no one can predict with certainty where we will end up. That's why we've built flexibility into our voluntary model.”

Developing new products that meet the needs of a changing marketplace has long been a Fortis Benefits strength. The latest examples include the recent introduction of the Simple Benefit Solutions product, combining basic life and disability coverage in one package; and the HealthySolutions discount card that allows individual employees to select only those discount programs they want and need, without wasting money on programs they will never use.

“Our commitment is to bring simplicity and stability to what has been a complicated and even chaotic environment,” Lucchi said. “We want to be the company that brokers and employers can depend on not just to sell insurance products but to manage voluntary benefits on their behalf. The strong reputation we have built over time allows us to make that offer credibly. To maintain that level of trust, we'll have to deliver the goods in both products and services every day. Our new voluntary model has been designed to allow us to do just that.”