Where technology fails the employee benefits industry
Technology is sexy. It sells. And, in the benefits industry, it attracts big venture capital investment dollars.
Many companies have sprouted up in the last decade, promising a panacea of ease and simplicity in executing benefits, HR and payroll programs.
We agree, to an extent, with their intention of making employee benefits easier with software and automation. Where the majority of them fail is in integrating the vital human component: the value of a tenured expert to guide decisions you must make before you push that button.
The employee benefits industry has shifted over the past 10 years, when technology was ushered in as a way to onboard and administer an employee and their benefits. Larger employers were already doing this, but it was foreign to smaller employers (most of the employers here in the North Bay). That was a blessing and a curse.
A blessing because it forced an industry (employee benefits brokers), that changes very little, to embrace technology or die. It also got smaller employers comfortable with the idea of using technology to manage their employees and benefits program more efficiently.
A curse because it birthed a slew of benefits companies that focused on technology only, selling the ease of using technology disguised as proper employee benefit brokers. This oversimplified what a benefits broker does and tried to redefine the job. The idea ultimately failed, and these folks had to regroup.
As we mentioned above, forcing brokers and employers to embrace technology was a good thing — but the trick is finding the right balance of use. Using technology in the benefits industry cannot be all or nothing.
Don’t get sold an illusion
In our experience, the salespeople in the tech-only organizations are just that, salespeople.
Their job is to get you to say yes, no matter what it takes. We’ve seen employers who have been dazzled by these services only to move to the “solution” and quickly discover that the services a traditional benefits broker provides has not been built into the technology first model.
There have been cases where the new “broker” did not handle plan administration like the client thought they would, nor handle the plan renewals, and gave no advice on the benefits program and their long-term plan for it.
For example, the Affordable Care Act completed its 4-year roll out, medical plan designs have changed, employer strategies changed and the wants and needs of employees have dramatically changed these days. These things simply cannot be addressed entirely by automation. One needs the breadth of industry experience and expertise only a human being can bring to interpret and apply these new rules and changes properly — and, more important, legally. Does your technology driven insurance company offer this? Be sure they do.
The reality of the promise of technology solutions
Recently, one of our clients came to us after working with a “technology broker.”
They cited customer service issues and poor access to reporting data and payroll deduction information as the main reasons for their move. They also later discovered that they received no market information other than their renewal and were never consulted on a benefits program strategy, which is an important tool for maximizing benefits use, efficiency, and savings.
Another client decided to make the move to a technology-first solution. Employers were excited, as they were promised a single sign-on solution that would electronically manage their total benefits program, handle new hire onboarding and online enrollment to the benefits program.
They came back to us after three months. Although the solution they moved to did provide an online system that let an employee select their specific benefits, it did not assist the client with their plan renewals, nor did it process the enrollment information properly.
The employer was left completely in the dark for more than a month, as they had been told that the system was connected in real time to an insurance company, which wasn’t the case. This, of course, caused a huge problem for new hires, because although they were electing plans and thought they were covered, the data was not being forwarded to the insurance companies.
We are huge advocates of enlisting technology at every avenue possible to streamline the benefits process.
We know technology can be a huge positive influence and facilitate many positive things. However, it is the right combination of technology and experience (in any industry) that makes technology shine.
It's the people behind the technology, who are guiding it, adjusting it, and customizing it for each company's needs that is the winning combination. Employers are best served by a broker-first company rather than a technology-first company.