Voluntary Benefits Fulfillment

Voluntary Benefits Fulfillment

Agenda Voluntary Benefits Fulfillment • The voluntary sales cycle • Important elements for building a good communication and enrollment strategy • Enrollment partner solutions • Common VB Objections • Key Success Factors • The Voluntary Benefits Value Proposition

Options for enrollment resources Producer Resources Unum Enroll <500 Market Only Third-Party Enrollment Firms • Some producers have enrollment expertise and resources • Can be a viable solution, but have to ask if it maximizes the producers time and resources? • Solely focused on cases in the <500 market • Provides a national network of 200+ benefit counselors • Offers a wide array of enrollment solutions • Expertise and capabilities to support all size cases, but are the key experts in the large case market • National network of firms and benefit counselors • Offer a wide array of enrollment solutions

VB sales cycle • Summary • Three primary decision makers: broker, corporate customer & end consumer / employee • Timeline of sales cycle is driven by case size, and can range from 5 – 36 months • Enrolling entity is heavily involved in both the broker & corporate sale, driving the fulfillment discussion & strongly influencing carrier selection • Decision points: Large / communication services & product; Core / relationship & product • Can’t lose sight of the fact that voluntary products are sold not bought • Areas of focus • Rep experience / education can position Unum to drive the fulfillment discussion • Effectively defining and securing employer commitment is a critical success factor • Realities of the segmented sales cycle is a significant point of reference when attempting to accelerate short term sales results The voluntary sales cycle can be defined as a 3 step process... Broker Sale Corp Customer Sale End Consumer Sale -Rep -Enrolling Entity -Rep -Broker -Enrolling Entity -Enrolling Entity Timeline: 6 to 24 months Timeline: 3 to 9 months

VB sales cycle The voluntary sales cycle can be defined as a 3 step process... Broker Sale Corp Customer Sale End Consumer Sale -Rep -Broker -Enrolling Entity -Rep -Enrolling Entity -Enrolling Entity Timeline: 6 to 24 months Timeline: 3 to 9 months • Broker / Rep introduces voluntary concept to the Corp Customer • Broker & Enrolling entity meets with Corp Customer to further explore voluntary and value add benefits of making available a voluntary plan • Enrolling entity drives discussion around the following decision points: • employer commitment • benefit communication opportunities...why most large case customers buy • product / price / underwriting • service, e.g. – enrollment tools, billing / collection interface, etc. • payroll deduction interface • Enrollment Firms can strongly influence both product & carrier selection • Rep introduces voluntary concept to the Broker • Rep introduces the Broker to an enrolling entity (Enrollment Firm or UnumEnroll) to further educate him about the voluntary market • Rep & Enrolling entity help the broker qualify their corporate prospect • Industry • Opportunities for a good voluntary product fit • Working conditions etc. Multi-facetted process with various personal connects Defined on the following slide...

VB sales cycle End Consumer Sale -Enrolling Entity Timeline: 3 to 9 months Communication Coordination Fulfillment Post-Sale Payroll Deduct & Remit • Make certain that the enrollment is properly marketed. • A strategy must exist to communicate to managers and employees. • This may mean face-to-face pre enrollment communication or via email, announcement letters, etc. • Communication to key constituents (brokers, reps, etc.) is critical throughout the process. • If one views the enrollment as an event, coordination can be viewed as making certain that the mechanical pieces of the project plan are delivered upon. • Examples: Enrollers are scheduled, laptops are ordered for the enrollers, enrollers are debriefed on the account specifics, etc. • Fulfillment summarizes the overall ownership and execution of the enrollment event. • Ownership of premium • Ownership of expense manage-ment • Most importantly, Ownership of customer satisfaction (employee, employer and producer) • Debriefs with enrollers and employers. • Base line customer service • Example: Employee is declined for coverage, applications are held up in U/W, employee wants to cancel, etc. • Establish ongoing service connects • Establish re enrollment strategy. • Enrolling entity delivers enrollment forms to entity setting up payroll deductions (e.g. – carrier, TPA, corporate customer) • Set-up file for payroll deductions are set up by the employer or TPA • Deductions are made by the employer • Premium remittance is remitted to the carrier and/or TPA/carrier • Premium is applied to the policy, resulting in paid production... $$

Why is enrollment important? Communication is key! An employee’s perceived value of a benefits plan can either be enhanced or diminished by the communication strategy. Recruit & Retain Above average healthcare benefits Below average healthcare benefits With effective benefit communication 83.6% 76.2% Withouteffective benefit communication 25.7% 22.1% % of employees responding favorably concerning their benefits Source: Watson Wyatt Worldwide, “Effective Employees Drive Financial Results,” WorkUSA 2004/2005

Types of enrollment Stand-alone Off-cycle Enrollment Core Benefits Enrollment • Why do a core enrollment? • Streamlines the enrollment process for both the core and voluntary plans • Provides an opportunity to focus on benefits education, potentially increasing participation in group/flex plans • Can communicate important changes in the core plan • Guarantees employee focus if one-on-one meetings are required for enrolling in their core program • The entire process can be managed at one time • Why do a voluntary-only enrollment? • Timing – may have just missed the annual core benefits enrollment (can sync up at their next core enrollment) • Allows the enrollment to focus on a select offering of voluntary plans – less overwhelming for employees • Provides another opportunity for the employer to re-communicate their total benefits package • However, there must be mandatory enrollments or participation will suffer (must be a reason to visit with an enrollment counselor)

Enrollment Stand-alone Lo-touch Hi-touch • Face-to-face meetings • Provide the opportunity to speak individually with employees – addressing their specific needs, questions and helping to ensure they’re making the right choices for them • Employees feel more educated, therefore having a greater appreciation for their benefits • Employees appreciate the time the employer is devoting to their own personal enrollment • Multiple options: • Group meetings • Call center • Online • Enrollment kits • When lo-touch makes sense: • Multi-state enrollments • Subset of dispersed employees • As a compliment to face-to-face (back-up for employees on vacation, sick, etc.) • Lo-touch enrollments have had limited success. But, with good strategy development they can be a viable alternative.

Employer involvement • The employer should be involved in the enrollment strategy development • Must have “buy-in” from the top (senior management) that flows all the way to the line managers responsible for ensuring employees attend their 1x1 meetings • While the top level managers are not the “target” market for these plans, they must recognize the value they bring to their employees • Support of pre-communications, integration with all benefit communications…presenting a picture of the total benefits program • Provides the opportunity for 1:1 meetings and allocates employee time Regardless of the timing, method, or enrolling entity, EMPLOYER INVOLVEMENT is the single most critical factor to the proper installation of any Supplemental product.

Developing the enrollment strategy Key Considerations • Multiple locations and shifts • Pre-enrollment planning and communications • Benefit counselor needs • Product Mix – discretionary income limited • Participation suffers with too many products • Keep it simple (limit to two products) • What other products are enrolling at same time? • What other challenges does the employer have? (outdated employee records, low 401k participation, etc.) • Back-up plan for late enrollees Keeping in mind… • Need to limit employee disruption • Goal is to send clear messages to managers and employees • Want to be viewed as a “positive” addition to the enrollment process

Enrollment pitfalls to avoid • Inconsistent management support/cooperation • An enrollment counselor’s worst nightmare is to show up to enroll and be directed to a break room to “wait for employees to show up” • Too many products at one time • Employees get confused and decide not to buy anything • No pre-communication • Even if employees didn’t read the information, they will have heard about • Undelivered pre-communication • Make sure the pre-communication was actually delivered • Surprises! - The enrolling entity needs to be aware of the employer’s full benefit offering – including any previously offered voluntary plans

Why outsource the enrollment fulfillment? #1 Consider the costs of doing it yourself: Time & Money • Must prepare pre-enrollment communications 1 to 2 weeks prior to enrollment • Enrollment limitations, an enroller can interview only between 15-20 employees per day • Hotel and airfare expenses may be involved • Professional enrollers can cost $300+ per day • EXAMPLE: A 200-life case may cost between $3,000 and $3,500 to enroll (no new premium guarantees). Consider the following: • Approximately 1 day setting up the case (billing call, product education, plane.biz set up, location coordination, etc.) • 8 to 10 full enrollment days for 200 lives • Half day committed to post sale activities • Total 9 to 12 day commitment • Enrollment costs remain fixed, but total participation could range from 0% to 60% * For illustrative purposes only

Benefits of outsourcing • Employ the experts – an enrollment partner will: • Provide professional benefit counselors with numerous hours of training & experience • Ensure their benefit counselors are licensed in all the appropriate states • Trained to approach the enrollment in a consultative way, with needs-based benefit education (no sales pressure!) • “Set it and forget it” • Let the enrollment partner worry about expenses; they have enrolled hundreds of employers and thousands of employees and know what it takes for a case to have successful results • Spend your time selling new cases and offering new products to existing clients • Enrollers do all the enrollment work, you collect the best commissions

A consultative approach to communicating value Service-oriented approach that supports the communication and enrollment process from start to finish Comprehensive communication and enrollment services • Customized enrollment strategies • Pre-event promotion campaigns • Coordinated enrollment with other benefit plans • Enrollment event marketing support • Full benefit communication services • Provide a needs-based, education-oriented approach for communicating and enrolling • Proactive strategies for re-enrollment • Nationwide network of licensed benefit counselors • Face-to-face, call center and web enrollment strategies • Web-based customer satisfaction surveys • Support post-enrollment account management

Enrollment technology: The plane.biz solution • Unum’s proprietary plane.biz system is a highly effective web-based benefit education and enrollment tool • Allows employees to see their personalized benefit portfolio through a professional and customized computer presentation • Provides an effective way of communicating employer dollar contribution to benefits • Clearly illustrates benefit choices and plan components • In addition to the electronic presentation, printed deduction authorization forms and benefit statements are available to employees For illustrative purposes only. This information provides an example of an enrollment technology solution and is in no way meant as a sales proposition.

plane.biz -- Personalized for employees Basic employee demographics and dependent information are pre-loaded into the system Information can be verified and updated by the Benefit Counselor and provided to Human Resources to ensure employee data is up to date. For illustrative purposes only. This information provides an example of an enrollment technology solution and is in no way meant as a sales proposition.

plane.biz – Customized for ERs and EEs Employees will see only the benefits they are eligible to receive Employees can enroll in core benefits including medical and dental coverage Employees can enroll in voluntary benefits such as Accident or Specified Critical Illness For illustrative purposes only. This information provides an example of an enrollment technology solution and is in no way meant as a sales proposition.

Enrollment Partners

Enrollment partners • Unum utilizes third-party distribution partnerships, including enrollment companies and brokers, to educate and enroll employees in our products • Partners typically fall into two major categories: national or regional • Within these categories, partners may focus on cases of all sizes • plane.biz is the Unum electronic benefit education and enrollment platform Understanding distinctive characteristics can help you identify the best external partner National partners Regional partners

Enrollment partners provide critical support • The partnership between brokers and enrollment companies increases the effectiveness of the enrollment process, resulting in increased participation, greater persistency, and more satisfied customers • They have the expertise and experience to develop the most effective enrollment strategy • In addition to the critical role of setting up the case from start to finish, they completely manage all aspects of the enrollment process, including: • Pre-enrollment communication/education events • Enrollment scheduling/enroller logistics • Executive of the enrollment • Post-enrollment activity (e.g., straggler enrollees, deduction file transfers, etc.)

They also assist in the voluntary “sale” • Understand & demonstrate the importance of employer commitment • Able to secure employee access and the working conditions that will result in a successful enrollment • Value of the one-on-one meeting • True buy-in vs. lip service (e.g. “mandatory meetings”) • Management level support • Employee level deliverables • Ensure appropriate product fit • Current core benefit/current supplemental offerings • Supplemental “fit”

Their value proposition • Enrollment partners serve as an extension of the Benefits Department • Provide professional, salaried counselors – both onsite and telephonic • Support full core benefits communication and enrollment • Update employee/dependent records, including beneficiary information • Collect benefit election authorization reporting • Conduct employee surveys to validate the value of the benefits communication and enrollment process

What to look for in an enrollment partner • Experience & expertise • Resources to deliver quality services • Dedicated account management • Trained and professional enrollment team • Enrollment Tools/Technology • Electronic enrollment system (proprietary/partnership) • Call center & online enrollment capabilities to access hard-to-reach employees or support new hire enrollment • Communications • Creative solutions that educate and promote interest • Flexibility to adapt to each employer’s unique needs • Proven results with a solid customer block • Commitment to providing ongoing service for the initial enrollment and beyond

What to expect from your enrollment partner • Ensure employer commitment and working conditions • Responsive and open communication • Understand employer objectives • Obtain all necessary data/needed information (e.g., census) • Facilitate planning meeting with employer/HR and management • Develop and distribute pre-communication materials • Ensure proper licensing and appointment and benefit counselor professionalism • Secure laptops and ensure enrollment platform is built and tested • Manage logistics of benefit counselor training and deployment • Provide value added services to employer as agreed upon

What do enrollment partners expect? • Broker and customer access • Setting expectations appropriately • Honest and frequent communication • Commitment to the highest expectations of service and delivery • A true partnership on every level

Common employer objections • Lack of belief in the products being offered or a bias against voluntary type products in general • Negative perceptions are still present in the marketplace, reflecting the need for better education on these offerings and their place in the market • Permanent life insurance is a strong product filling a real and growing need • Supplemental health products, in particular, were oversold for many years at at time when there were fewer out-of-pocket medical expenses (times have changed) • Challenge CFO’s and HR VP’s when they are making decisions about benefit needs for the “rank & file” employee population *Source: LIMRA, "Worksite Marketing of Voluntary Benefits: The Consumer Perspective," 2005 Report.

Common employer objections • My employees can buy these products on their own • Financial planners generally do not prospect individuals earning less than $100,000 • The days of buying insurance over the kitchen table are gone • Middle-income consumers prefer to buy life insurance face-to-face, but do not have access to agents and providers* • Worksite products are not available in the open market (STD, Accident, Critical Illness) on an individual basis with Guaranteed/Simplified issue underwriting *Source: Purchase Preferences of the Middle Market: Life Insurance, LIMRA 2004

Common employer objections • Concern that medical costs are rising; employees won’t have discretionary dollars to spend on voluntary benefits and/or are not interested • Understandable, but employees need supplemental programs now more than ever • Take a proactive approach to the timing of the offering; can’t be reactive • Propose VB off-cycle from the medical, unless the core enrollment is driving the discussion • 51% of employees who knowingly have a voluntary benefit available to them choose to participate* • 20% of the overall population has purchased a voluntary benefit* *Source: LIMRA, "Worksite Marketing of Voluntary Benefits: The Consumer Perspective," 2005 Report.

Common employer objections • Benefits are too expensive relative to group contracts • Acknowledge product differences, as there are advantages to each portfolio • Education about the expense involved with individual product offerings • Less work for the HR team as the insurance company handles much more • Unum’s comprehensive portfolio of group and individual offerings allows you to make a recommendation based on the best interests of the customer, while most carriers offer either group or individual products, not both

Common employer objections • Negative experience in the past • Maybe from another carrier (e.g., AFLAC calling direct), or enrollment firm • Outline your strategic approach to the benefit offering and educational enrollment process • Demonstrate Unum’s service-driven model • Nine out of ten Unum customers (89%) surveyed rate the overall performance of enrollers who met with their employees as good or better* • In addition, employers tell us we met or exceeded their expectations when it came to*: • Enrollers' ability to relate to all types of employees (93%) • The degree to which they presented the offer without pressure (92%) • Enrollers' adherence to the enrollment schedule (91%) *Source: Mathew Greenwald & Associates , “New Customer/New Plan Check-In Survey for Voluntary Enrollments for January – December 2005 Effective Dates”, July 2006. 2005 survey of Unum customers who had at least some of their employees meet with an enroller.

Common employer objections • Employer doesn’t believe in “one-on-one” meetings and satisfied with their current enrollment process(e.g., group meetings, call center, online, etc.) • May have had success with group meetings in the past, or have concerns with too much time off the clock • How much time do employees spend at group meetings vs. an individual enrollment session (20-30 minutes)? How much do employees gain from the group meetings (really) -- which will provide the most value to the employee? • Define the tag-team enrollment approach that will result in less interruption to the workplace • We offer several options for working with employers to implement benefit communication and enrollment plans to coordinate with, and enhance, their existing process

Common employer objections • Employer cannot “mandate” individual one-on-one meetings • A well-designed benefits communication and enrollment event can do more than just enroll employees, it can: • Through the use of benefits statements, illustrate the employer’s full benefits offering and value • Underwrite the cost of the enrollment • Influence increased participation in employer sponsored plans • Communicate the “hidden paycheck” benefits • Reconcile employee/dependent data issues which may inflate group medical costs

Common employer objections • Fear of the unknown • Human nature, as we are asking employers to trust us • Demonstrate, in detail, how the products and processes will work and provide solutions to their most concerning challenges • More than half of employers offer voluntary benefits* • Reference case examples and success stories • Introduce Unum partners: sales rep, Unum enrollment manager, Unum enrollment firm partner • *Source: LIMRA, “The Voluntary Benefits Report Card,” March 2007.

Key success factors • While cases with low-turnover, concentrated employer locations, and the demographics of voluntary purchasers, the most critical success factor is employer support • Walk away quickly if you don’t receive the utmost support and cooperation from the employer! • Enrollment partners (either carrier support or third party) will help you develop the most effective strategy and avoid the pitfalls that can make or break your success in this market • They have the expertise and experience you can lean on! • Education is critical… for you as well as your clients • The more knowledge you have, the better able you will be to have a solution-oriented discussion that will differentiate you from your competitors and position you in a stronger place with your client • The more knowledge your clients have, the more likely they are to recognize the importance of providing voluntary solutions and comprehensive benefits communication and enrollment

The voluntary value proposition • Most employers believe employees don’t fully understand and appreciate the value of their overall total compensation package • A personalized benefits communication and enrollment process plays a distinct role in helping employees better understand their benefits as well as the total value of their compensation package • Healthcare costs continue to rise and employers absorb these costs by reducing employee benefits – e.g., reduced life insurance, increased co-pays & deductibles, fewer holiday/sick days, cut-backs on over-time, etc. • The addition of supplemental programs provide employee-paid options that can boost an employer’s benefits package • Employers will see improvement in employee morale, retention, and employee satisfaction as employees better understand the value of their benefits program

The voluntary value proposition • Reduced HR staff coupled with more employee benefit programs have many employers dealing with significant administration challenges and little time to effectively manage their benefits program • An effective benefits communication and enrollment strategy provided through an integrated carrier offering affords employers the opportunity to reach all of their workforce, provide a complete and consistent message, and provides administrative relief to their HR staff • Many employers have already introduced voluntary plans, but haven’t had positive experiences in terms of participation and benefits management • Developing the right strategy, having the right partners, and offering quality products and services are the critical ingredients for success that you can now bring to the table

Voluntary Benefits Fulfillment