The Affordable Care Act has brought changes that businesses can’t ignore. Aflac surveyed 314 brokers, 5,209 American workers and 1,856 business decision-makers to determine the impact health care reform is having on brokers’ business models and employers’ benefit offerings. The results show the growing importance of voluntary insurance benefits.

1. THE VOLUNTARY INSURANCE ADVANTAGE
Broker, Employer and Employee Findings – 2014 Aflac WorkForces Report
N140227 6/14

2. Introduction
The Affordable Care Act has brought changes that businesses can’t ignore.
Aflac surveyed 314 brokers, 5,209 American workers and 1,856 business
decision-makers to determine the impact health care reform is having on
brokers’ business models and employers’ benefit offerings.
The results show the growing importance of voluntary insurance benefits.
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not specifically permitted herein is strictly prohibited and may subject you to civil and criminal penalties. Aflac herein refers to American
Family Life Assurance Company of Columbus and/or American Family Life Assurance Company of New York and/or Continental American
Insurance Company and/or Continental American Life Insurance Company.

3. 2014 AWR Broker Findings

4. Top 5 broker concerns
Key Issue
Rising health care costs impacting client
decisions
47%
Understanding the impact of HCR 38%
Remaining relevant 29%
Diversifying revenue streams 27%
Client uncertainty of HCR 27%

5. Health care reform is driving change
49% of brokers at least somewhat agree they are considering
exiting the industry given changes in the health care landscape.
67%
50%
36%
At least somewhat agree they have
seen many of their peers exit the
industry in the past year.
Completely or strongly agree they are
confident in their firms' and the
industry's future.
Completely or strongly agree health
care legislation represents an
opportunity for them and their
businesses.

6. Snapshot of brokers surveyed
Small Brokerage Medium Brokerage Large Brokerage
Average time in
current role
11 years 9 years 8 years
Revenue stream Health/ Medical
Insurance
37% Health/ Medical Insurance 28% Life Insurance 28%
Prop. & Casualty 22% Life Insurance 22% Health/
Medical
Insurance
23%
Life Insurance 14% Prop. & Casualty 21% Prop. & Casualty 16%
Voluntary Benefits 13% Voluntary Benefits 14% Voluntary
Benefits
15%
Disability Insurance 10% Disability Insurance 11% Disability
Insurance
11%
Other 4% Other 4% Other 7%

7. Broker policy breakout
Small Brokerage Medium Brokerage Large Brokerage
Group Policies
(<100 lives)
48% Group Policies
(<100 lives)
38% Individual 40%
Individual 29% Individual 33% Group Policies
(<100 lives)
30%
Group Policies
(100+ lives)
23% Group Policies
(100+ lives)
29% Group Policies
(+100 lives)
30%

8. Voluntary insurance benefits most sold by brokers
Small Brokerage Medium Brokerage Large Brokerage
Dental Term Life Term Life
Short-term Disability Insurance Whole Life Annuities
Term Life Homeowners (Prop. & Casualty) Universal Life
Long-term Care Dental Short-term Disability Insurance
Accident Vision Dental
53% of brokers say they plan to increase the amount of
voluntary insurance benefit revenue at their firms.

9. Brokers’ tenure selling voluntary insurance benefits
Small Brokerage Medium Brokerage Large Brokerage
< 6 months 9% < 6 months 5% < 6 months 12%
6 months to < 1
year
10% 6 months to < 1
year
21% 6 months to < 1
year
12%
1 to <3 years 18% 1 to <3 years 26% 1 to <3 years 22%
3 years to <6
years
18% 3 years to <6
years
11% 3 years to <6
years
17%
6 years to <10
years
13% 6 years to <10
years
17% 6 years to <10
years
13%
10+ years 32% 10+ years 20% 10+ years 24%
Roughly one-quarter of brokers say they began selling
voluntary insurance benefits less than one year ago.

10. Brokers who are selling voluntary insurance benefits are seeing results
35%
29%
75%
Brokers offering voluntary are more
likely to increase the number of clients.
Brokers offering voluntary are more
likely to grow their sales.
Brokers NOT offering voluntary are
more likely to DECREASE their client
base.

11. The Growing Importance of
Voluntary Insurance Policies
2014 AWR Employer and Employee Findings

12. • “Personal financial issues” was named as the top non-work related issue that
distracts most employees during work.
• Voluntary insurance policies help employees cope with living expenses and
out-of-pocket costs associated with accidents or illnesses—costs major
medical insurance was never intended to cover.
• Voluntary insurance policies provide benefits regardless of major medical
insurance, including policies that will be in place through public or private
marketplaces/exchanges.
• Voluntary insurance provide workers with an essential safety net.
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Change presents an opportunity
Health Care Reform does not eliminate the need for voluntary
insurance; it shines a spotlight on employees’ increasing need for
voluntary insurance!

13. Workers want benefits – and are willing to pay for them
• 88% of workers at least somewhat agree that voluntary insurance benefits
are a part of a comprehensive benefits program.
• 52% of those without access to voluntary insurance benefits say they
would at least be somewhat likely to apply for voluntary insurance
benefits if their employer offered them.
• 63% see a growing need for voluntary insurance benefits.
• When asked why the need for voluntary insurance benefits is growing
today, workers say:
• Rising medical costs: 76%
• Rising medical coverage costs: 66%
• Increasing deductible and co-pays: 61%
• Because employer reduced benefits or coverage: 37%

14. How to best put voluntary insurance policies to work
• As a complement to existing employer-paid benefits options—enhance
offerings with little or not cost.
• Restructure current employer-paid benefits options to include employee
buy-up options.
• Replace some employer-paid benefits options with voluntary
insurance policies.
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15. Workers’ Health Care Reform Concerns

16. Heath care reform adds to confusion
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Health care reform is confusing:
• 73% of workers agree that health care reform is too complicated to
understand.
• 71% of workers agree that their personal health insurance situation will
become more confusing.
• Though the online exchange or marketplace for individual coverage opened in
2014, only 10% of workers say they are very or extremely knowledgeable
about federal and state health care exchanges.

17. Communication is key to understanding the impact
of health care reform
• 68% of employees believe their employers will educate them about
changes to their health care coverage as a result of health care
reform.
• 41% of employers feel extremely or very prepared to address
changes to the health care system in 2014.
• 45% of employers will rely on brokers or insurance companies to
suggest changes to their benefits packages due to the changing
health care environment.

18. Concern #1: They don’t know enough to effectively
manage their health care options
• 51% of workers say they do not prefer to be in control of their health care
expenses/options because they don’t have the time or knowledge to effectively
manage it.
• Workers have limited knowledge of key consumer-driven health plan options.
Those who say they are extremely or very knowledgeable about:
• Flexible Spending Accounts – 40%
• Health Savings Accounts – 31%
• High Deductible Health Plans – 26%
• Health Reimbursement Accounts – 21%
• 47% of workers have not begun to prepare themselves for changes to their
benefits package due to health care reform.
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19. Concern #2: Unsure how they will be affected
Since many do not understand health care reform, they are left wondering
how health care reform will impact them.
• While 26% of workers strongly or completely agree they will have better
insurance because they will have greater control,
• Only 14% of workers at strongly/completely agree that the quality of their
health care will increase as a result of health care reform.
Many indicate they believe the law will affect the cost of their health care
coverage.
• The majority (86%) at least somewhat agree the medical costs they are
responsible for will increase.
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20. Concern #3: They are not financially prepared
The reality is that many companies already shift a significant share of health care
premiums to their workers, and yet:
• 42% say they are not at all/not very prepared to pay for out-of-pocket expenses
associated with a serious illness or injury
• 49% of employees have $1,000 or less to pay for out-of-pocket expenses
associated with an unexpected serious illness or accident
• 27% of employees have less than $500 available to pay for out-of-pocket
expenses associated with an unexpected serious illness or accident
• 39% of workers would have to borrow from their 401(K) and/or from friends and
family to pay for out-of-pocket expenses associated with an unexpected serious
illness or accident
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21. Concern #4: They underestimate out-of-pocket
medical costs, resulting in financial stress
Very few American workers understand the impact of medical expenses on their
overall financial health. In fact, many workers are facing financial crisis today:
• 42% say they are not at all/not very prepared to pay for out-of-pocket expenses
associated with a serious illness or injury.
• 69% of workers at least somewhat agree that they regularly underestimate the
total cost of an injury or illness, including medical, household and out-of-pocket
expenses.
• At least one-in-ten (13%) workers are currently dealing with high medical bills,
roughly 20 million workers.
• Nearly one-quarter (24%) of the workforce has been contacted by a collection
agency due to medical costs and/or had their credit score negatively impacted.
• 10% of workers have missed bill payments due to high medical costs, totaling
approximately 15 million workers.
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22. About the Study
The 2014 Aflac WorkForces Report is the fourth annual Aflac employee
benefits study examining benefit trends and attitudes. The study, conducted
by Research Now in January 2014, captured responses from 314 brokers,
1,856 benefits decision-makers and 5,209 employees across the U.S.
To learn more about the Aflac WorkForces Report, visit
AflacWorkForcesReport.com
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23. Thank you
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