Insurance Companies Offer Bundles to Keep Down Costs
Insurers are offering small businesses a new way to cap the cost of insurance coverage for workers and their families through contracts for bundles of group disability, life and other small business insurance benefits.
The platforms allow small-business owners to create a baseline of group benefits, which they can fully or partially subsidize for eligible workers and their dependents. It doesn’t include medical coverage, which is contracted separately.
Employees can purchase supplemental coverage and pick from a range of other voluntary benefits, such as short-term disability policies and critical-illness insurance, which they would pay for out of pocket but at discounted group rates obtained by the employer.
Insurers say the packaged benefits allow small-business owners to control their costs while providing employees with a broad range of benefits, which are key to keeping and recruiting staff. Business owners save time and money by working with a single insurer and managing their account through one Web site. For employees, it is a convenient way to purchase richer coverage at rates that may be lower than if they bought coverage on their own. The medical underwriting is minimal, which is important for workers with health problems who might otherwise be unable to buy coverage elsewhere.
“In an economic downturn, now more than ever, employers are looking to stretch their benefit dollars,” said Georgette Piligian, senior vice president of Small Business Strategy & Operations, MetLife Inc. (MET).
In February, MetLife began offering a benefits bundle for small businesses with 10 to 99 employees. Initially available in the Atlanta, Chicago, Dallas, Portland and Seattle areas, now the packaged offering also is available in Cleveland and Cincinnati.
Another insurer, Unum Group (UNM), is about a year into a national rollout of a benefits bundle aimed at small and mid-sized businesses with two to 500 employees. Called “Simply Unum,” the online platform offers a blend of life and disability group coverage with buy-up options, as well as voluntary benefits, including critical-illness and accident policies. It is available in 47 states, the most recent addition being New York in June.
