Technology is sexy. it sells. And, in the benefits industry, it attracts a lot of venture capital funding.
Over the past decade, many companies have sprung up, promising a panacea of lighthearted simplicity in enforcing benefits, HR, and payroll programs.
To some extent, we agree with their intent to make employee benefits easier through software and automation. Where most of them fail is in integrating the important human element: the value of a lifelong expert guiding you on the decisions you have to make before hitting that button.
The employee benefits industry has changed over the past 10 years when technology was introduced as a way to onboard and manage employees and their benefits. Larger employers are already doing this, but it’s new to smaller employers (most employers in the North Bay). That is a blessing and a curse.
This is a blessing because it forces an industry with little change (employee benefit brokers) to either embrace technology or die. It also made smaller employers comfortable with the idea of using technology to manage employees and benefit plans more efficiently.
A curse, as it spawned a string of tech-only benefits companies selling the ease of use of technology masquerading as a proper employee benefits broker. This oversimplifies the job of a benefits broker and attempts to redefine the job. The idea ultimately failed, and the men had to regroup.
As we mentioned above, forcing brokers and employers to embrace technology is a good thing – but the trick is finding the right balance of usage. The use of technology in the welfare industry cannot be all or nothing.
Don’t sell illusions
In our experience, a salesperson in a purely technical organization is one such salesperson.
Their job is to get you to say yes, no matter what it takes. We’ve seen employers dazzle with these services only to move to “solutions” and quickly discover that traditional benefits brokers offer services that aren’t built into the technology-first model.
In some cases, the new “brokers” did not handle plan administration as clients thought, nor did they handle plan updates, nor did they provide any advice on benefit plans and their long-term plans.
For example, the Affordable Care Act has completed 4 years of introduction, health plan designs have changed, employer strategies have changed, and employee needs and wants have changed dramatically. These things simply cannot be fully solved by automation. People need extensive industry experience and expertise, and only humans can properly interpret and apply these new rules and changes—and more importantly, legally. Does your tech-driven insurance company offer this service? Make sure they do.
The Reality of Technology Solutions Promise
Recently, one of our clients came to us after working with a “tech broker”.
They cited customer service issues and difficulty obtaining reporting data and payroll deduction information as the main reasons for their move. They also later found that, beyond renewals, they had received no market information and had never been consulted on benefit plan strategy, an important tool for maximizing benefit use, efficiency, and savings.
Another client decided to move to a technology-first solution. Employers are excited because they are being promised a single sign-on solution to electronically manage their overall benefit plan, handle new employee onboarding and online registration for benefit plans.
Three months later, they came back to us. While the solution they migrated to did provide an online system for employees to choose their specific benefits, it didn’t help customers renew their plans or handle enrollment information properly.
Employers were kept completely in the dark for more than a month because they were told the system was connected to an insurance company in real-time, which was not the case. Of course, this poses a huge problem for new hires, because the data isn’t being forwarded to the insurance company even though they’re choosing a plan and thinking they’re covered.
We strongly advocate for the use of technology in all possible pathways to simplify the benefits process.
We know that technology can have a huge positive impact and facilitate many positive things. However, it is the right combination of technology and experience (in any industry) that allows technology to shine.
The people behind the technology are directing, adapting, and customizing the technology to meet each company’s needs, and that’s the winning combination. Employers are best served by broker-first firms rather than technology-first firms.