By Cyril Tuohy
The U.S. business of group of the Canada-based financial services giant Sun Life Financial has announced that it is making a suite of life and protection products available on a health care exchange hosted by the benefits broker Arthur J. Gallagher & Co.
Products available on Gallagher Marketplace include voluntary short-term disability, long-term disability, life and accidental death and dismemberment, accident, critical illness, and cancer insurance, Sun Life said in a news release.
It is the fifth private exchange on which Sun Life’s insurance and protection products are available, the company added.
Karen White, assistant vice president, product initiatives for Sun Life, said that expanding the carrier’s offerings through private exchanges “is an important part of our effort to meet the diverse needs of employers and their employees.”
Private benefits exchanges hosted by large insurance brokers, insurance carriers and health technology companies, are seen as a good way for insurance carriers to sell more life, health, disability insurance, as well as ancillary insurance coverage.
Among the major life insurers participating in private exchanges are MetLife, Allstate, Voya Financial, Prudential and The Hartford.
As employers adopt a more consumer-oriented benefit model by offering employees a stipend toward health purchases and allow workers to mix and match a portfolio of coverage benefits, carriers see a new opportunity.
A Kaiser Family Foundation report published in September found that there were at least 2.5 million people enrolled through private exchanges in 2014, including about 1.7 million group plan enrollees, 700,000 individual Medicare enrollees and 100,000 individual enrollees.
Walgreen’s, Sears, Darden Restaurants, Petco and DineEquity all use private exchanges to offer benefits to current employees.
Other companies such as IBM, Time Warner, General Electric, Whirlpool, Caterpillar and Kinder Morgan use private exchanges for retirees.
The Kaiser report, “Examining Private Exchanges in the Employer-Sponsored Insurance Market,” citing employer surveys conducted by exchange providers, indicates that 20 to 33 percent of employers will adopt a private exchange approach over the next three to five years.
The size of the private exchange market is expected to cover about 40 million lives by 2018, the report also said.
About 150 million people, or 56 percent of the nonelderly population in the U.S. are covered through employers-sponsored health insurance, and analysts see exchanges as reshaping the way employer-sponsored benefits have traditionally been bought and sold.
Cyril Tuohy is senior writer for InsuranceNewsNet. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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