Until recently, offering individual dental or vision coverage hasn’t been in a broker’s best financial interest even though many clients ask for the coverage. Facing low commissions, the cost of handling paper work, and added customer service, brokers often tell their clients that they don’t sell it, or they refer clients to the broker down the street who sells individual products.
But the market has changed! The first reason is the sheer number of new clients. With the graying of Baby Boomers (approximately 10,000 per day turning 65), many potential clients are searching for individual dental and vision coverage — mainly because they have retired and no longer have group coverage from work. Even current employees are losing their dental and vision coverage. Many employers who have been hit with large increases in medical premiums are reducing ancillary product offerings, such as dental and vision. In some cases, employers are removing ancillary product offerings altogether. These factors have caused the individual dental and vision market to grow. In the past, very few carriers offered dental and vision products to individuals. But with the increased interest, several carriers have entered the market with multiple product offerings.
TPAs and even carriers have created private dental and vision exchanges. These exchanges allow brokers to offer individual dental and vision with little or no effort to an increasingly interested clientele. A broker can contract with one or several online exchanges. Multiple carriers’ products are displayed for a client to purchase. Products are listed by product type, price, or the popularity of a particular product with that exchange. Online exchanges now offer dental and vision discount plans, HMOs, PPOs, and indemnity. Some exchanges even offer other products, such as term life, or annuities. Carriers have become more and more innovative with their dental and vision offerings. A prospective client can find products with and without deductibles or waiting periods. Some even include orthodontia coverage with little or no waiting periods.
All states have product offerings with many exchanges offering multiple carriers in each state. Clients can purchase these products monthly or annually, and can usually pay by credit card or bank draft. Exchanges now offer the ability to purchase stand-alone dental or vision and packaged plans, which are less expensive when buying dental and vision at the same time.
These exchanges usually offer dental and vision coverage information in a format that’s easy to understand and compare. A client can compare two or three products at once and see the benefits and prices side-by-side. Many have decision tools to help the member choose the right product for their needs including offering PPO network provider listings by zip code with addresses and directions to the provider’s office.
The more sophisticated online exchanges even offer marketing materials. A broker can use their CRM or other agency software to e-mail personalized marketing brochures or sales videos to clients automatically by email at certain periods like monthly or quarterly.
Some exchanges allow a broker to handle several carrier appointments or contracting on the same portal. This is convenient, especially when an exchange has several products from multiple carriers in one state, such as California. Other exchanges allow a client to change or update credit card information or bank accounts. These portals usually have frequently asked questions about draft dates, effective dates, claims, and recent rate increases. These websites save the broker from having to answer questions or provide other manual services on such a low commission product. The exchange handles questions that are usually handled by the broker.
A few individual and dental exchanges have recently begun offering private exchanges to brokers. These exchanges work with a copy of the broker’s website and operate their online web enrollment platform inside of a frame. From the client’s point of view, they are still on the broker’s website. The process makes the move from the broker’s website to the exchange platform seamless to the client. The broker can personalize the look with colors and some style flexibility while maintaining the feel of the private exchange. In addition, the broker can choose which dental and vision products to sell on their private exchange. Some brokers may not want to contract with six or seven carriers, so they limit their selections. The end result can truly be a private dental and vision exchange for the broker.
Other markets with higher volumes can now be on the broker’s radar since they control a private exchange, or they can make a private exchange for affinity clients. Many affinity groups, such as associations, chambers of commerce, credit unions, banks, unions, and senior groups are having a tough time financially. Some are just trying to find a way to offer more benefits to members. Most groups are looking for two things: be more relevant to their members and bring more revenue to the groups. A private dental or vision exchange can do both for that affinity group members.
The broker can privatize the -affinity or union groups’ exchange or market their own exchange to the groups’ clients. Either way, this new tool offers the broker a new market with a potentially larger volume with the same minimal work. Individual dental and vision can be a new profit center for the broker. And besides, it’s a really good feeling when an insurance broker is able to take a well-deserved vacation. Imagine hearing that ring of your smart phone informing you of an incoming email. It’s your private individual dental and vision exchange telling you that two more clients have enrolled in a dental or vision plan. q
David White is the CEO of Morgan-White Group. For more -information, call 877-759-5728