Side Affects 164 | Rethinking Workplace Benefits: Life, LTC and the Evolving Carrier Landscape

Kenzie McEvili: Hello, everyone. I'm Kenzie McEvili, the producer and host of McGo and Brave Bender's employee benefits podcast. Side Effects. Employee benefits are no longer just a line item. Um, they're a strategic lever for attracting talent, managing risk, and supporting an aging and evolving workforce. Yet when it comes to life insurance and long term care, many organizations are navigating rising costs, limited carrier options and increasing employee need all at the same time. The challenge isn't just offering these benefits, it's designing them in a way that's sustainable, competitive and meaningful. Joining us today is Christy Winters, MB supplemental and executive risk solutions consultant who works closely with organizations to evaluate risk carrier strategy and the evolving role of supplemental benefits. Christy brings a unique perspective on how life and long term care solutions are shifting and what that means for employers making high stakes decisions. Today, we're diving into how life and long term care benefits are evolving, what carriers are doing in response to market pressures, and what HR leaders and executives should be thinking about as they design their future benefit strategy. Let's jump in. Hello, welcome to SideFX, everyone. I'm Kenzie McEvili, joined by my co host, MB Chief Marketing Officer Dave Homan.

Dave Homan: Hey. Hello, everyone.

Kenzie McEvili: And we have our very incredible guest today who's making her debut on Mago and Bray Bender's side Effects podcast. Christy Winters is our supplemental and executive risk solutions consultant. So thank you, Christy, for joining us today.

Christy Winters: Thank you for having me.

Kenzie McEvili: We're very excited to have you on the big comfy couch in our control room.

Dave Homan: And it's great to have you back, Kenzie, back into the flow of things. Kenzie has been out with baby number two.

Kenzie McEvili: Correct. This is my debut podcast from that too.

Dave Homan: Yeah, go ahead, give our listeners a quick 10 second.

Kenzie McEvili: Oh, her name is Poppy. She. She is the sweetest, happiest little smiley girl. Just got two teeth. Life's good.

Dave Homan: Well, there we go. And it's great. We had a little bit of a hiatus without Kenzie, but she's back. And what a great first guest we have.

Kenzie McEvili: And Christy was recommended by many internal MBers because they said we need to have her on an episode. She's got all of the knowledge and education that we need for our listeners.

Dave Homan: Yeah. So let's jump in. Um, that was a rather lengthy title and description we had before for our listeners. Can you, um, water it down a little bit?

Christy Winters: I sure can. And that's funny you say that because when I came to leadership with the idea for this new title, there were three different individuals who said, that's really long.

Kenzie McEvili: Well, I do a lot of things.

Dave Homan: Okay. Very important person.

Christy Winters: Absolutely. So first and foremost I am a consultant here at McGowan Bravender, but my role is shaped a little differently in that I don't have my own book of business. Um, so what I do is work with our consultants, with our um, account managers, with our analysts, with our carrier partners to um, identify opportunities for existing clients for either supplemental health benefits or some of our um, executive benefits, um, or, and, or the life and long term care. So let me go ahead and just define what those are so we can, we can level set. So when we talk about supplemental health benefits, we're talking specifically about accident, critical illness and hospital indemnity. And then when we talk about long term care, this idea of long term care, we're referring to these hybrid solutions that are permanent life policies that fund long term care events. Um, so what that refers to is long term care when someone may need assistance, when they can no longer fully take care of themselves. Um, that could be due to aging, illness, injury or even cognitive conditions like Alzheimer's. So long term care is not necessarily medical care. It's assistance with some of those everyday activities of living that allow us to move and be free. So things like getting dressed, going to the bathroom, eating, dressing, showering. So when there's a loss of, that there's a loss of, of functionality and care is needed. Um, and there is a common misconception that long term care automatically equates to nursing home care and that's just not true. There's all kinds of long term care, um, including nursing home. But this could be adult, um, daycare, it could be assisted living, um, it could be assistance at home through home health aides and it can last from months and even up to sometimes years. So it's really about maintaining quality of life and allowing people to live with dignity.

Dave Homan: Okay, thanks for that clarification.

Kenzie McEvili: Yeah, that was a good intro.

Dave Homan: I've seen a huge, that's been a huge area of growth in the industry over the past several years. So can you speak a little bit like what's going on in that industry to make it so popular and attractive?

Christy Winters: Absolutely. So as of February 1st, Unum was the last, if not one of the last group long term care carriers to exit the marketplace. So it really comes down to we don't have a ton of options for funding these types of policies. So what the carriers are now bringing to the forefront are these hybrid policies that are um, they're twofold. So they are at its base a Life insurance policy, some kind of permanent policy, and then there is a long term care or chronic care rider attached to that. So what's neat about these is it is not a use it or lose it benefit. Um, you're going to use it either way. And some carriers have positioned these products where you're able to use both the living benefit for the long term care costs as well as the death benefit with the life insurance.

Dave Homan: Can you give us an example of like a living benefit for our reader? Like how would they take care advantage of that?

Christy Winters: Yeah, absolutely. So let's say I have a. Not me, I don't want to put that out there. Let's say somebody, somebody, friend of a friend, friend of a friend, an unknown person, receives a catastrophic cancer diagnosis. Um, you know, it is something that is not, you know, easily, easily taken care of with a surgery or just a couple weeks off work. So what may happen is if as a result of that diagnosis, some of those activities of daily living are unable to be performed during recovery. What these policies allow the insureds to do is take a portion of that death benefit from the life insurance and fund that towards long term care expenses. So what it'll do is reduce these policies dollar by dollar until the death benefit gets down to zero. So we see these happening in one of two ways. It could be a percentage per month, so typically 4% is pretty common. Um, or there is an option, it's called a chronic care benefit and that pays out in a one time lump sum. So there's pros and cons to each. But there are, you know, there's different options to utilize these benefits. But what it does is it takes the pressure off some of the financial burden that comes with it.

Dave Homan: Um, because you're probably not gonna be able to work like you were and you're gonna have expenses. So you had just mentioned a minute ago that Unum was exiting the market with their group benefit. So why are the group plans going away and being replaced?

Christy Winters: There was and now I wasn't in the industry at the time. This is what I have heard the lore if you will. Um, there was a time where there were very strong group long term care policies that, that um, were heavily utilized. But there was a huge actuarial mishap when it came to pricing, when it came to persistency and when it came to um, clients filing claims. So the market essentially imploded and we are now in a position where it's either um, you know, maintain what you may have through an old policy. You can look At a private standalone long term care policy, um, through a financial advisor. Uh, or we can, you know, we have the option for these guaranteed issue group life insurance policies with these long term care riders through your employer. Now these are available on the individual market too, but there's underwriting involved, so it just gets a little complex and more expensive.

Dave Homan: Yeah.

Kenzie McEvili: Okay, so it sounds like there's a shift to kind of more hybrid products too. What else are you seeing? Like, how are carriers adapting their strategies now?

Christy Winters: Yeah, so what's interesting is these hybrid products are not something that all carriers offers. The ones that do do it well, and we tend to stick to those partners because we know that they're offering quality product and experience. Um, the market is shifting toward more carriers offering these. We're seeing less of the whole life and universal life option and we're seeing a lot more of term to perm, which M is a little bit easier. It's a little less cost prohibitive. Um, and hopefully within the next couple of years we'll see more carriers offer this as part of their offering instead of, you know, it's coming next year, it's coming next year.

Dave Homan: So have carriers. So the hybrid products are really kind of the direction they're going in. What other kinds of challenges are they facing besides the underwriting?

Christy Winters: Well, on the group, you know, with the group policies, um, the pricing is priced for the masses. So you're not. Let me back up. Standalone long term care policies are cost prohibitive. They can be extremely expensive.

Dave Homan: They are ridiculous. I got a quote a couple years ago and um, I was like, is this a group plan or is this an individual plan?

Christy Winters: And I don't know if you knew this, Dave. They price those anticipating at least a 50% jump in premiums throughout the life of the policy.

Kenzie McEvili: Wow.

Dave Homan: Oh, wow.

Christy Winters: And these aren't protected by any rate guarantees. Right. They're, it's, it can be a heavy investment for something that you may never, never need.

Kenzie McEvili: Wow.

Christy Winters: Um, so it's, you know, and it's also people don't like to think about their own mortality. Right. So when you have folks in their 40s and 50s who are not yet thinking about this when they really should be, you know, and you might not use it until you're in your late 70s or early 80s. That's a, that's a long time to plan ahead.

Dave Homan: Yeah. But we're living in a world where

Kenzie McEvili: we're living to 100 life expectancy.

Dave Homan: Yeah. Because of that. I mean, very true. Yeah. It is an aging population that's Getting bigger and bigger and you just don't have enough people to offset.

Kenzie McEvili: Well, in our last employee meeting, I remember we're adding something and it said up until the age of 121. And we all thought it was a typo and we were like, is that real? And it is real now. So it's something we have to consider.

Christy Winters: It is. Can I tell you a stat that's gonna blow your mind?

Kenzie McEvili: Please do.

Christy Winters: And this was shared with us from one of our carrier partners. But by the year 2030, the number of individuals in the United States over the age of 65 will outnumber those under 18 for the first time ever.

Kenzie McEvili: I don't like that.

Christy Winters: We are also just under 150,000. Don't quote me on that. Somewhere around that number, uh, workers short, um, of pre Covid levels. So while the demand is going up, the available resources are going down. And then with fun things like health care inflation and everything. Inflation, the demand is really high.

Kenzie McEvili: That's four years. 2030 is in four years.

Dave Homan: Yeah. Wow.

Kenzie McEvili: M. That's a fun fact. Thank you, Christy.

Christy Winters: It's a sobering fact.

Kenzie McEvili: We're alarming the listeners. It's okay. We need to know these things. Um, I was hoping that you could, uh, possibly share, like we were saying, the rise of the popularity of the Life LTC hybrid products and they're gaining this popularity. Do you have any examples or stories that you could share about a positive example?

Christy Winters: Do you mean like a.

Kenzie McEvili: Of a group adding this to their plan or something? Just a real life example where a

Dave Homan: person benefited from having, if, you know,

Kenzie McEvili: enrolling in a plan, those kind of stories. You might not be aware of them

Dave Homan: because you implement them.

Christy Winters: I do, I do. So I'm on the front end. I don't really get a lot of those backend success stories.

Kenzie McEvili: Mhm.

Christy Winters: Um, so I don't have one to share, unfortunately. I know that's not what you wanted to hear.

Kenzie McEvili: That's okay though, because I feel like the only thing I think of is if you go into a group that had a hard experience, that's why they're adding it. That's maybe why they're interested in it. And I wondered if you had any of those.

Dave Homan: But yeah, and I'll tell you, for me, I mean, I have one. And for me it's just peace of mind. That's the whole thing. It's like I'm paying, I'm paying a premium cost. But it's just for peace of mind to know if something does happen to me, my Kids won't kick me to the curb.

Kenzie McEvili: So, Christie, switching gears a little bit to cost and accessibility, what exactly is driving the increase in premiums for long term care and life insurance products?

Christy Winters: My gosh, what isn't? Like everything, things are just more expensive, the demand is higher. Healthcare costs are, as we all know, on the rise. Um, and as those options become more limited and we really just don't have, we don't have enough resources. So those who can afford the best of the best are going to pay a premium for it. And those who can't, you know, those, their experiences will follow.

Dave Homan: Yep, yep.

Christy Winters: It's unfortunate.

Dave Homan: Uh, and I don't want this to sound the wrong way, but I just always remember growing up in the industry or whatever, it's like supplemental benefits for the longest time had a negative connotation and it had the salespeople that would call you and want to come in and be high pressure. And that's for people that may have that mindset from a previous life or previous employer or whatever. Let me just tell you, that has changed completely. So can you tell our listeners about how supplemental benefits have changed and like how they've evolved to actually dovetail in with your regular plan? It's the trendy benefit.

Kenzie McEvili: Everyone wants a little extra something to choose.

Christy Winters: Absolutely. And it's even changed so much in the five years that I have been here at McGowan Brai Bender. Um, so what we are seeing now is the group carriers all have their own version of the supplemental health products. And when they first kind of came to market with those, um, you know, there wasn't a lot of differentiation, there wasn't a lot of flexibility. Um, but now what we're seeing specifically with, if we're speaking product wise, critical illness, I think this is where we have seen the most growth, you know, among the carriers that we work with. So, um, we are seeing carriers now start to pay a benefit for certain mental health conditions, for infertility, for family planning. And those things just weren't part of the conversation a couple years ago. So it is nice to see that they are evolving with the client need. Um, the other piece we're seeing is that these are all able to be administered on benefits administration systems. And I think this was a huge barrier in the past with some of those individual products as they just weren't.

Dave Homan: You had to maintain two separate enrollment systems. And it was a pain for the employer, for the employees.

Christy Winters: Right. And you know, even those kinds of, you know, those carriers, and we've got great partnerships with Some of those folks, they have also evolved to make their, you know, group products tech friendly as well. So we're seeing it across the spectrum. Um, but the, I'd say the biggest focus that carriers have right now is how do we pay claims? And we're seeing a lot of integration across supplement or I'm sorry, across, um, life and disability products. And then we're seeing a lot of integration with wellness claims, specifically on the dental and vision. So if you don't know what I mean by a wellness claim, on the supplemental health policies, there is a 50 or $100, um, typically benefit that is payable each year for everybody on the plan who goes and gets a preventative screening done. So it's a nice benefit to have. Um, you get paid for doing something that you probably should be doing anyway, and then you get a nice little check in the mail or in, in your bank account. Um, but they're really focused on how do we pay more claims, how do we make this easier for the employee to get their dollars, you know, if they are in a stressful time post accident, post diagnosis, post hospitalization. We all know the last thing that anybody wants to be thinking about when we're sick, injured or injured is money.

Kenzie McEvili: Yep.

Christy Winters: And Dave, going back to what you said, this is, it's peace of mind.

Dave Homan: Yeah.

Christy Winters: Mhm. Absolutely. So, um, it's been really fun to watch even in the last couple of years, how the products themselves have expanded, but also how they're just more accessible.

Kenzie McEvili: And are you finding that like clients will come and come to MB and say, hey, what are my options here? Like I want to add something for our employees. Is that a lot of the conversations that you have?

Christy Winters: Absolutely, yeah, absolutely. And we also have clients who are interested in looking at other products too. So, um, it's kind of a mixed bag. I have all kinds of conversations and requests and things to look at. But um, we are seeing, I think most of our clients, I'm saying this anecdotally, not from any data points, but a majority of our clients do have some kind of supplemental benefits already in place. Awesome.

Dave Homan: Okay. And um, if I were an employer that didn't have it and you would engage my organization, like, where do you start? I mean, I, uh, would think that it's totally based on the plans they have situation. So how do you triage and dig in?

Christy Winters: Yeah, so that's a great question. So we look at a couple of things and this can also depend on the size of the group. So if there is utilization data available, sometimes I Will try and look at that to see what might be appropriate for the group, what amounts, et cetera. So I kind of piece together a policy based on that. Um, that's not always available. Um, but I think the easiest way to go about this is just to look at a standard quote, um, just a baseline. Here's what, what an accident plan is. Here are the benefits. Critical illness, here are the benefits. And then we kind of tweak it from there, depending on what the employer feels is best for their organization. There's so many levers on these that we can pull. So if you look at them on a spreadsheet, you're not getting the full story. Mhm. Right.

Dave Homan: Yeah. And I've seen a supplemental benefits spreadsheet and it's. Unless, you know, specifically, it's like finding a needle in a haystack, overwhelming. And so that's where I think it's, it really benefits having someone that understands the mechanics, not just what the benefit is, but how it operates, the ease of use, how do the employees receive payments.

Christy Winters: Um, and that's the biggest thing is you can have the best, most perfectly designed plan in the world. But if employees don't remember they have it, which is fairly common, um, or they, they don't know how to file a claim or it's a pain in the rear to get it done, they're not going to do it.

Dave Homan: Yeah.

Christy Winters: And what's the point? There's zero roi, you know.

Kenzie McEvili: Well, that, that leads me to my next question then. So for employees, maybe they don't know about this, but if you could give advice to any employees that are trying to decide whether to enroll in these benefits, what would you tell them? Besides, you know, being educated about it?

Christy Winters: Of course.

Kenzie McEvili: Yeah.

Christy Winters: Then that would be my first. Take a couple of minutes to learn about the products. Um, it really comes down to need to phase of life to budget. Right. So if you know, you're somebody who is in their mid-40s and you've got young kids and they are involved in sports. I don't have kids, but I hear they get hurt a lot.

Dave Homan: A lot. Right.

Christy Winters: There is no doubt an accident plan is probably a good idea. Right. The average age for a critical illness policyholder is between 43 and 45.

Kenzie McEvili: Wow.

Christy Winters: So that's something that, you know, you might want to, you might want to consider. Um, I would also say look at what you like to do outside of work. Look at your job itself. Look at the, you know, are you, are you starting a family or in the process of having a Family. What's your family health history? There's, there's so many different ways you can go about this. Um, but it really comes down to, I think, just taking a couple minutes to really assess your personal risk profile and situation and then, you know, enrolling accordingly.

Kenzie McEvili: This reminds me of the movie was it Along Came Paulie? When Ben Stiller has the client who does the risk analysis, he like, swims with sharks and stuff. And they're like, you really need to like, up your life insurance policy. And if anyone knows that movie, hopefully

Dave Homan: this is the situation.

Christy Winters: If you're swimming with sharks, may I recommend hospital indemnity?

Kenzie McEvili: Yeah, I'm gonna. Christy, that's gonna be a quote from you for our movie lovers.

Dave Homan: Um, so what advice we're kind of coming up on on time here. Like, what advice, uh, would you just, um, maybe give to employers that are considering it for the first time?

Christy Winters: Yeah, it can't hurt to look, right? And I would also encourage employers to maybe survey their employees if they can, because what an employer might think their employees do or do not want might not actually reflect those responses. And we've actually had some really nice success stories based on those surveys, um, that have come back completely, completely different. These are typically voluntary benefits. There's no cost to the employer.

Dave Homan: Hm. Um, and so why wouldn't you offer a wider range of benefits to them?

Kenzie McEvili: Mhm.

Christy Winters: Let me correct myself. There's no cost to offer the benefit. I'm not talking about administrative. Don't want to back myself into a corner there.

Kenzie McEvili: Um, I was going to say my last question, if you want to add on to this too. If you had to predict in the next five, 10 years, let's say you have a crystal ball. What will this life LTC landscape look like?

Christy Winters: I love that question from our expert here. The expert word scares me. I'm just kidding. Um, I think we are going to see an evolution of these products with more carriers. I think we're going to see more options for the chronic care benefit, which is, um, it's not technically an ltc, but I think we're gonna see a wider range of options. It's going to become more of a commonplace in conversation. Um, it's gonna be right up there with the supplemental health. It's gotten a lot of traction in the last couple years and even the improvements that the carriers we work with have made have been incredible. It's just so interesting.

Kenzie McEvili: Mhm.

Christy Winters: It's so interesting.

Kenzie McEvili: Especially with our stat about 2030 coming up here. So that's in four years.

Christy Winters: You reminded the listeners. I was hoping you'd forget.

Kenzie McEvili: Do you, Dave, have any other follow up questions for Christy or. Christy, are there any notes that you want to share with our followers as we end up here?

Christy Winters: I would say if you're interested or have any questions, um, you know, you can reach out to me. Christy, winner's on LinkedIn. Or if you're a current McGowan, Bray Bender client, you know, ask your consultant or account manager. We, we've got so many, so many options that we could talk about.

Dave Homan: Um, yeah, so thanks. So for our listeners, I mean, supplemental benefits is a great way to round out and just kind of put a bow on your benefits program. Uh, especially for those employers that are competing for people that are maybe outside of their industry, out of their vertical and they're looking for anything they can to just get sticky with the employees. This is a great benefit. But talk about stickiness. Let's say they do leave. That is something that in most cases they can take with them, isn't it?

Christy Winters: Yes, you bring up.

Dave Homan: So it's. So it's portable.

Christy Winters: Most of these products are portable.

Kenzie McEvili: Wow, that's a huge point.

Dave Homan: Yeah.

Christy Winters: Yeah.

Kenzie McEvili: And we're going to mic drop on that note then.

Christy Winters: Yeah, I guess so.

Kenzie McEvili: So, Christy, thank you so much for joining and breaking down this complex or world that a lot of people don't know a lot about. So thank you for your details and your information.

Christy Winters: Thank you for having me.

Kenzie McEvili: Absolutely.

Dave Homan: Hopefully it's changed people's opinions that have that old school view like many of us in the industry have.

Christy Winters: I hope so.

Dave Homan: Supplemental benefits, but thank you.

Christy Winters: Give it another look. It's worth it.

Kenzie McEvili: And so if our listeners have any questions or want to follow up with Christy or myself, you can email me at kenziealthierbirthdays.com or Dave healthierbirthdays.com Thank you for joining us and we'll see you next time on SideFX.