MetLife Expands Bundled Benefits to Small Groups

The addition of life and disability insurance options to MetLife’s small group market is a preview of the insurance giant's future strategy, a MetLife executive said Tuesday.

MetLife, a perennial heavyweight in the large group benefit marketplace, announced last week that it was adding options to its Simply Smart Bundles benefits package for the 10-99 employee market launched last year.

Dental, vision and legal services were part of the original 2016 bundle sold by independent benefits brokers and consultants.

“We find that there are small and regional brokers that totally get this and some national entities really know how the small business works,” said Jessica Moser, vice president of regional and small business strategy for MetLife.

Selling Simply Smart Bundles is open to all brokers licensed with MetLife, she said.

Retail broker-dealer Brighthouse Financial, which MetLife is expected to spin off later this year, and Mass Mutual Financial Group, which last year acquired thousands of retail brokers from MetLife, will not distribute Simply Smart Bundles, she said.

Commission Structures

Brokers earn an additional one-time payment of 1.5 percent of premium in addition to the base commission when selling dental and two or more lines, according to a MetLife fact sheet.

Using a hypothetical example of a business with 75 eligible employees, a broker would be paid $649 on premium of $43,260 for dental coverage for 65 lives and $141 for premium of $9,375 for term life coverage on 70 lives. Also, he or she would earn $180 on premium of $12,000 for short-term disability on 45 lives and $111 on premium of $7,406 for vision on 45 lives, MetLife said.

Total additional compensation in this example comes to $1,081.

Bundling benefits is nothing new but not all benefit brokers have the expertise to sell into the small group market.

MetLife said the bundles could offer brokers who want to differentiate themselves in the small group market something new in an era of tightening labor markets and when benefits serve as an important lever to attract and retain skilled labor.

Bundles are designed to help businesses compete in local markets, “because these are the benefits packages most desired in each geography,” said James Reid, executive vice president and head of regional and small business solutions at MetLife.

Small businesses in metropolitan areas are generally interested in richer plans at higher dental plan maximums. Small businesses in the West value endodontal and periodontal coverage more highly than in other parts of the country, Moser said.

Simplicity and Speed

Coverage bundles were launched after MetLife analysts mined data from 40,000 small business owners and received feedback from brokers, Moser said.

A key feature of the bundle is simplicity.

Employers are fee to mix and match the benefits that suit them best and pay through tiered options — essential, premium and premium plus — similar to the levels available on healthcare.gov, the federal government health care exchange.

Brokers receive quotes within 24 hours, can freeze pricing for three years for life and disability coverage and two years for dental, vision and MetLaw, the employee-paid legal services not available as a stand-alone product in the small business market.

The bundle guarantees coverage on supplemental life insurance up to $100,000 in coverage limits, MetLife said.

A portion of the bundled coverage is paid for by the employee, while other portions are paid for by the employer or shared between employee and employer, Moser said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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