We are in the beginning of a revolution in how employers manage employee information, benefits and compliance. Enrollment and administration of benefits once a manual process is now shifting to electronic benefits platforms. There are a lot of options and a lot to consider, so who is helping you evaluate possible technology solutions for your company?
According to a recent Life Insurance and Market Research Association (LIMRA) survey, “Benefits Technology: What do employers want?” more than 25% of employers believe their broker should have primary responsibility for researching and evaluating possible technology solutions. Contrast that with another recent LIMRA survey “Partnering With Carriers to Connect With Clients.” In response to the question, “who should absorb the majority of the cost for employee benefits technology?” brokers overwhelmingly think the responsibility lies with the carriers.
A disconnect? Oh, yeah!
Why is That Bad?
Let’s start with the obvious. Insurance carriers are like credit card payment processing companies; they’re strictly transactional. Carriers are focused on processing claims. Period. They could care less about onboarding, ACA compliance, payroll, paid time-off or any other human resources function, but these matter to you. So, why would any technology solution financially backed by a carrier address these things?
Carrier technology is almost exclusively limited to benefit enrollment and management, and employees almost never have ongoing access to make life event changes or to update information. Yet according to the LIMRA study “Benefits Technology: What do employers want?” 80 percent of employers say it is important for a technology platform to be accessible all year so they can use it for ongoing administration and updates, rather than a “one-and-done” enrollment system.
Similarly, that study found 77 percent of employers want a technology system that can manage all their benefits on the same platform, regardless of which carriers are providing the products. How high on the priority list do you think it would be for one carrier to integrate with another and to share information about its customers with that carrier?
We live in an Application Programming Interface (API) economy. APIs are programs that act like waiters that take our requests and deliver them to others to be filled. Think Amazon. Amazon is the ultimate API. Amazon doesn’t own any production facilities for the products it sells. Amazon’s market dominance can be attributed to a collaborative business strategy that is solely focused on connecting buyers with sellers of goods and facilitating an exchange between the two.
Insurance carriers, on the other hand, operate largely in individual standalone silos. However, what employers want when it comes to benefits administration and compliance is the API experience. They want to go to one place to access and manage this information. They want a benefits administration platform that can be used for all their needs and that talks to other systems, such as payroll. They simply want their lives to be easier.
So, if the carriers aren’t the answer, then who should employers turn to for help?
Why the Broker Needs to Lead
The broker is in the best position to be your API and deliver the API experience to you. They meet with you. They talk to you, and, hopefully, they listen to you.
Ideally, your benefits broker should help you not only with the insurance, but with human resources and compliance. They should be providing you with the advice, education and tools to help you navigate the ever more complex employee benefits and compliance environment. They should be connecting you with others who can solve your problems. They can do this by taking a leadership role in finding the right benefits administration system that fits your needs.
I’ll go even further. Your employee benefits broker doesn’t need to just lead the effort to research and evaluate employee benefits platforms, they need to lead the implementation and support of the chosen platform. They should know the system in and out.
And, guess what? There are platforms that will deliver this API experience to you.
Reevaluate Your Broker
So, why does your broker believe the carriers should have primary responsibility for delivering this technology to you? Most employee benefits brokers are operating from a 20th century model and see themselves as extensions of the carriers. They think that because the carrier pays them they should focus on developing those relationships, but the carrier doesn’t pay them. You do. The carrier is simply the conduit.
Most brokers are passive and reactionary. They’re looking for the carriers to tell them what to do. They’re interests are not aligned with yours. If your broker doesn’t have any skin in the game do you think your broker will play an active role in helping you solve your problems?
So, the next time your broker says, “we have great relationships with the carriers,” you should know that they don’t and that it doesn’t matter anyway. What should matter is that your broker is focused on helping you solve your problems, not those of the carriers. In that vein, they should be spearheading the effort to evaluate possible technology solutions, making recommendations, and helping you implement them.
If you’d like to speak to an employee benefits broker who believes that it is his responsibility to deliver advice, education and tools that solve your problems call me at (952) 237-6956 or email me at mdmowski@comprehensivebenefitservices.com.