Traditionally, employers have had a set-it-and-forget-it frame of mind when it comes to finding a vision plan to offer employees. But now that a combination of economic factors and increased attention from health care reform has led more plan sponsors to take a second look at the market, there's a whole new sight to see.

As president of Davis Vision, a managed vision care company, Steve Holden readily admits that vision is a benefit "which often companies ignore" or disregard once they've found a carrier. "It's hard to get their attention," he says. Now, "what I'm finding is with the economy doing what it is, just about every company out there is looking at all of their costs ... so an awful lot of people are out for bid that haven't been in the past."

Indeed, this is a unique opportunity for non-medical lines of coverage, says Tim Falanga, president of MAG-EB, a Connecticut-based brokerage. "As employers struggle to get ahold of their medical costs - and continue to share more of those costs with employees - a low-cost, high-value benefit like vision should be getting more attention."

Field of Vision

Because of the non-catastrophic nature of vision insurance, Cam Kennedy finds his clients looking at the benefit differently in order to prioritize the "potentially huge claims" of medical plans. "A lot of clients because of that, and because of the increases in medical in general, have really switched to either not offering vision or offering it on a voluntary basis," says the CFO and managing director of employee benefits at Michigan's Cambridge Consulting Group. "There's really been a shift in the last two or three years where people have gone from a company-provided vision plan to a lot of companies now providing more of a voluntary [plan] - or at least a contributory plan, where they're sharing the cost with their employees."

For employees, the upside of vision going voluntary is that the relatively inexpensive yearly premiums associated with it make for a less painful transition. For brokers, the upside lies in vision care's room for growth in terms of market penetration.

"If you consider the latest numbers that I've seen, roughly 50% of people who could have a funded vision plan actually do. And I've seen statistics as low as 40% and as high as 60%," says Holden. "So somewhere between 40% and 60% of the market is still out there to be convinced to offer a vision plan."

When helping customers shop a vision plan, Kennedy finds that employees are not often as attached to their optometrist as they are to their dentist or doctor. Consequently, he's able to put together a plan with a smaller network that will keep premiums at their lowest.

"You still give them that out-of-network availability where they're going to pay a little bit more to go out of network, but it allows you to keep premiums more competitive if you give them a network that may be a little bit smaller, but it's a network where people are willing to be more competitive as far as fees are concerned," he explains.

Lower fees go a long way for employees that may have just switched from an employer-paid vision benefit to a voluntary one.

Eagle Eye

In response to a growing number of requests, Assurant Employee Benefits entered the vision market June 1 with their own fully insured plan offering through VSP Vision Care. "We listened to brokers when they told us we needed to get into this product category - we heard it was a need and have addressed it with a quality product they can be proud to sell, thanks to our partnership with VSP," says Paul Walker, product development marketing specialist.

As an add-on to the plan, Assurant offers a "find an optometrist" smart phone application similar to the "find a dentist" app the company launched in April. "'Find a dentist' was so popular that we felt that 'find an optometrist' would really be too," says Karla Schacht SVP, CIO and CSO.

The app uses Google Maps technology to determine the user's location, providing a map of the closest in-network optometrists. The user can then click on a red indicator arrow for more information about the doctor's office, or click twice to call the office directly.

It's not just about adding another cool gadget to your phone - it serves to raise awareness about eye care, an important factor in making an employee's vision benefit actually useful, experts agree.

"The world we live in today is, 'how easily and how quickly can I get it done?' - and the simplicity of it," says Schacht, "if I contrast it with going to go look in the Yellow Pages or doing a search online, you still have to sort through where you are, and you've got to be in front of the computer or have your laptop."

Having to make the extra effort to search for a doctor can be a factor in an employee's decision to ignore the fact that their world is getting fuzzier. It was for Schact. "I didn't wear glasses for a long time and I kept trying to tell myself I didn't need them because [making the effort to] go and find someone, by the time I got around to it there were other things," she says. "If you have a PDA that's in your hands and you have the ability to do it immediately when it's top of mind, I think people will act."

Proper communication is "a huge part" of Cambridge's vision strategy. "The year goes by and people forget, they don't get new glasses, they don't go and get their exam, because it's not something that's really critical or causing you pain or causing you issues," says Kennedy. "A big part of our goal with our clients is to make sure that they're getting the most out of their vision benefit. So it's making sure to educate them on their plan. How often they're allowed to go see their optometrist, how often they can get new frames and lenses and educating them on the network - which is a huge part of it - and the savings that are available by using certain providers versus other providers."

To make sure employees are getting the most bang for their vision buck, Cambridge does a formal presentation on the benefit for about 90% of the firm's clients, and offers a Web portal and print booklet as well.

Schacht believes products like Assurant's "find an optometrist" app are an easy added value to a client presentation. "When you go in and talk about the vision product, you're talking about features and what it covers and what it doesn't, but you don't really feel or touch anything," she points out. For brokers "to be able to have the application to show to customers will not only increase the dialogue, but it will show how we're looking at things differently. It will show how we're looking at trying to make the whole insurance area smooth and more consumable by the customer."

Peripheral Vision

As a model of how he'd like to see the vision industry evolve, Davis Vision's Holden looks to the success of dental's six-month checkup campaign. "The vision industry has not done anything like that at all. There's not much call for people - unless they sit on their glasses and smash them or simply can't see anymore - to go in and get an eye exam," he says. "It just isn't in peoples' minds to do."

And that needs to change, Holden adds, in large part because many diseases such as diabetes and hypertension can be diagnosed through an eye exam. He is hopeful that public awareness campaigns such as Think About Your Eyes (thinkaboutyoureyes.com) will be successful in making the link between eye health and overall health common knowledge.

Preventive maintenance is critical in all aspects of health care, Kennedy says, but the eye industry in particular could do more to incentivize people to have an annual checkup.

"There's not much incentive built into plans to get participants to do that," he says.

As for health care reform, although vision care did not play a central role in the Patient Protection and Affordable Care Act, Holden is satisfied with how vision was treated - for the most part. "Obviously I would love for there to be a federal mandate that everyone has to have vision exams and vision insurance," he says with a laugh. "That didn't quite happen."

However, there is one portion of the legislation that "causes a problem for the industry," he adds. The newly established children's vision insurance in the state market must be administered through a third party, rather than on a standalone basis. The requirement does not apply to adult plans; so many parents will now have to go through one route for their own vision care and another for their children's care. Since "well over the majority" of the market is now serviced via standalone plans, "I'm hopeful that in the next three or four years we'll be able to prevent the extra $3 or $4 billion in expense that that [provision] will result in," he says.

Holden doesn't deny that the requirement is well intended; nonetheless, he believes making third-party administration mandatory "screws up the way vision care is delivered right now."

Conversely, Holden is optimistic that PPACA's insurance mandate will be good for the industry. "I think the entire vision industry is excited about that because people with insurance tend to go to the eye doctor and get exams more often than people without it," he says, "and we all believe that that leads to much better patient care and much better efficiency at work."

MAG-EB's Falanga looks to the small business tax credit included in the Patient Protection and Affordable Care Act as a potential benefit for the industry as well. "Perhaps there will be a move to reposition money to enhance benefits by adding vision care instead of pulling back on benefits," he says. "It certainly is a low-cost, high-utilization, high-value product."

Meanwhile, at Cambridge, Kennedy is still poring over the legislation to determine whether both vision and dental are included in some provisions. One area where he knows plans will be affected is the new $2,500 cap on flexible spending accounts, effective in January 2011.

As Cambridge's clients have seen their health care costs rise, some have switched from full vision coverage to simply offering a vision discount plan and encouraging employees to use an FSA for the tax savings. With the implementation of the cap, "that now may be a little bit harder for people to use for vision because they have other needs on the FSA side," says Kennedy. "So that will hurt that type of plan."

Although the future is by no means clear, Kennedy predicts reform will not have a huge impact on the vision market, since most problems diagnosed through an eye exam become a medical issue.

"I don't know that I see a huge change on the vision side because I don't know that that's driving a lot of the cost in the whole health care realm," he says.

"Once you get into medical problems with your eyes it goes right into your medical plan, so in terms of the traditional eye exam, I don't think a lot of that's going to change too dramatically."