By Cyril Tuohy
Sales of voluntary/worksite benefits reached $6.89 billion last year, an increase of 3.7 percent from 2013. In-force premium hit $37.3 billion in 2014, an increase of about 5 percent compared with 2013. That is according to the latest voluntary/worksite benefits market survey published by Eastbridge Consulting Group.
In 2013, voluntary/worksite sales premium reached $6.64 billion, an increase of 10.1 percent compared with 2012. In 2013 in-force premium rose 4 percent compared to 2012.
The Eastbridge researchers surveyed 60 carriers active in the group and individual voluntary worksite market.
Benefits experts have pointed to the uncertainty around medical health coverage and the requirements of the Affordable Care Act as one reason for previous increases in sales of voluntary/worksite benefits.
As health care reform takes root, more consumers and businesses have become familiar with the process of buying insurance, as well as what is included in primary health plans sold on exchanges and via employer-sponsored programs.
The Gallup-Healthways Well-Being Index released Monday found that nearly 90 percent of adults in the U.S. have health insurance. The share of adults who are uninsured dropped to 11.9 percent for the first three months of this year.
Despite the slowing growth, Gil Lowerre, Eastbridge president, said in a news release that the latest data reinforced the upward trend of “positive results year after year” in voluntary/worksite sales.
The 2014 survey also found that the top 15 insurance companies in the voluntary/worksite market accounted for about 79 percent of voluntary/worksite sales last year, roughly the same as in 2013.
The top 15 benefits carriers also saw their average sales increase 4.3 percent, slightly higher than the industry as a whole, Eastbridge reported.
Voluntary benefits are paid for 100 percent by the employee through a payroll deduction. The benefits are offered in addition to shared benefits for which the employer and the employee contribute toward the premium.
Employers often find offering voluntary benefits attractive since employers don’t contribute to premiums and elect to make voluntary benefits available to workers at the employers’ discretion.
Employees like the benefits as they allow workers to supplement coverage they already have, and are eligible to buy the coverage through group rates.
In 2013, life insurance was the top seller in the voluntary benefits market with a 28 percent share of all voluntary sales, followed by disability insurance with a 21 percent share. Accident sales account for 12 percent of voluntary sales in 2013.
Other coverages available in the voluntary market include hospital indemnity and supplemental medical insurance, as well as cancer and critical illness coverage.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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