Limited-Benefit Health Plans: The Golden Product for Your Portfolio

The voluntary benefits marketplace is a full and often difficult market for many brokers to enter. And to serve a diverse group of clients effectively, brokers must spend much of their time keeping current with the latest product, underwriting and industry news in all markets. This leaves precious little time to explore new products.    

One product worth exploring is voluntary limited-benefit health plans. With a quality carrier offering simple implementation and administration, limited-benefit health plans are a client- and broker-friendly way to fulfill a distinct need in the market.

Why add limited-benefit health plans to your product menu?

A limited-benefit health plan provides access to health care for the working uninsured—those who don’t have a comprehensive medical plan available through their employer or spouse. A limited-benefit plan will provide the right amount of benefit at the right price for part-time or hourly workers who often earn just $8 to $12 per hour.

While a limited-benefit plan, as the name implies, places limits on the amount of benefit available, it does not mean the types of benefits are limited. A quality plan will offer wellness, outpatient and inpatient (lump sum as opposed to per-diem), and accident benefits; employee assistance programs; and supplemental benefits such as dental, vision and term life.

In a market of its own

Limited-benefit health plans are tailored for industries with high turnover rates that have long presented a challenge for traditional major medical plans. The hotel, retail and restaurant industries, for example, are often deemed headaches by many brokers, but they are satisfied customers of limited-benefit health plans. Based on its own research, CIGNA HealthCare estimates that more than one million people are covered by limited-benefit plans. Businesses ranging from Fortune 500 giants to mom-and-pop shops have begun making these plans available to their employees. Many companies in the staffing, construction, manufacturing and landscaping industries also provide limited-benefit health plans to their employees.

The satisfaction these industries glean originates from their employees’ access to benefits of true value. It’s not enough simply to look at premiums or benefits or at the network. In order to determine the true value of the plan, one must look at how all three work together to provide the greatest value to the employee.

The value to employers who offer limited-benefit health plans to their employees is in the form of improved recruiting, increased retention and reduced absenteeism. This value proposition is even more important in today’s economic client, as retaining the best employees and making sure they can remain healthy and productive is paramount for today’s employers.

It is worth noting that with an established record of success across perceived “hard-to-reach” industries such as restaurant, retail and hospitality, the limited-benefit market continues to grow.

The importance of communication

Limited-benefit health plans tend to serve a population that often has never had exposure or access to health insurance or health care beyond the emergency room. When identifying a quality limited-benefit health plan to add to your product portfolio, it is important to consider the enrollment and educational material available.

Best practices in member communication include:
• Simplified content in enrollment and marketing material
• Creative enrollment strategies
• Simplified enrollment processes (e.g., IVR, Web, live agent)
• Simple plan design
• “High-touch” consultative customer service
• Bilingual communications
• Access to health information and resources via print literature, online and traditional telephone customer service

Effective communication leads to a higher participation rate and ultimately, to greater employee satisfaction with the plan.

Administration ease

Seamless administration requiring minimal effort is valued by independent brokers and clients alike when implementing a limited-benefit health plan. Whether it’s eligibility, reporting, ordering of additional collateral, billing, etc., administrative simplicity is an important part of a limited-benefit offering. This efficient administration process allows both client and broker to focus on important business activities instead of repetitive administrative tasks.

A product with a purpose

A limited-benefit health plan is an important part of any broker’s portfolio, particularly given today’s economic environment and growth in the size of the market. A limited-benefit health plan provides you with an opportunity to increase your revenue, expand your client base and provide access to health care for the nation’s working uninsured—and there is nothing limited about that.