The overarching goal of any broker is to develop and align a benefits strategy with a client’s organizational goals and help drive bottom line growth especially within the context of today’s shifting economy. Of course, there is also an underlying need to understand the specific needs and environments in which client companies operate—whether it’s construction, education, hospitality, or government. However, all companies must deal with one constant when it comes to employee benefits—change.
For example, the changes that are taking place under health care reform are the most drastic ever, and employers are faced with a tangle of new requirements that, among other things, will alter the benefits enrollment and administration process. Some of the most profound changes include the Patient Protection and Affordable Care Act (PPACA), which requires extending coverage of dependent adult children to age 26, an auto-enrollment requirement for employers with 200 or more employees, and a mandate to provide a report to the government that not only certifies whether coverage was offered but also details the period of coverage for individual employees.
While some requirements will be phased in over time, other recent changes have employers scrambling to ensure compliance—from an extension of COBRA benefits eligibility to stringent policies under the Health Information Technology for Economic and Clinical Health (HITECH) Act that require covered entities to notify affected employees if there has been a breach of unsecured protected health information (PHI). In addition to federal regulations, states have various requirements and mandates for benefit coverage and contribution levels. Massachusetts, for example, requires employers with more than 10 employees to provide a “fair and reasonable contribution” to the health insurance premiums of employees.
On another front, employees will increasingly be responsible for making choices regarding health plans, providers, and services by judiciously allocating and spending dollars from their health savings accounts (HSA). According to the Treasury Department, the health care initiative is expected to double the number of people using HSAs—from 21 million in 2010 to between 40 and 45 million.
Add new regulatory requirements and an increasing shift to a consumer-dependent model to the existing mix of issues, and all employers are faced with navigating a complex and evolving health care landscape that will impact their responsibilities and requirements for benefits enrollment and administration. The implication and consequences of failing to keep up and comply with changing requirements can be costly—even more so given the intense scrutiny under which health care is being viewed. Moreover, employees must be viewed as consumers with expectations and an increased awareness and empowerment regarding their benefits.
According to the CedarCrestone 2009–2010 HR Systems Survey, application adoption of major administrative applications, such as benefits enrollment, is mature. The Guardian study shows that the past five years have seen a 165% growth rate in the proportion of employees using web-based technology for benefits enrollment. What primarily drives change in a solution provider today, CedarCrestone notes, is a choice to move to a different deployment model, which can mean seamlessly integrating functions such as payroll and benefits. For benefits brokers, this represents both a challenge to stay relevant and an opportunity to bring more value to employer clients.
From a technology standpoint, it’s critical to have a solution that not only can adapt to legislative changes and health care trends but also be flexible to accommodate everything from the composition of a workforce to integration with an existing HRIS or platform. The challenge, from an automation perspective, presents somewhat of a contradiction—employers need a solution that is adaptable to accommodate change, but is also based on a systemic approach grounded in best practices and best-of-breed technology. The good news is that these objectives are not mutually exclusive and, in fact, such solutions exist to help brokers and employers successfully achieve both objectives.
Case Study: A Leading Broker Finds the Rx to Manage Change
Seven years ago, Conner Strong, a leading insurance, risk management, and employee benefits brokerage and consulting firm, decided to add an in-house benefit administration and web enrollment service for its clients, allowing them to extend their reach as a consulting company and offer services their clients needed. Today, Conner Strong facilitates automated benefits enrollment administration services for eight client groups—ranging from public entities such as counties and boards of education to private entities such as hospitals, realty management, and construction companies. The firm currently has approximately 12,600 active or retired employees in the enrollment system that it uses.
Mitchell Young, technology specialist with Benefit Operations at Conner Strong, is responsible for running the benefit enrollment and administration system. His responsibilities include design, setup, and testing of all plans, carrier feeds, and additional reporting for initial implementation and ongoing administration, as well as online services for open enrollment and other enrollment as necessary. Conner Strong initially chose the system it has based on its flexibility to meet existing client needs and the solution’s scalability to meet client needs as they expand and change.
“We do extensive reporting for all the companies we have on the system,” Young explains. “This includes enrollment reporting for consultants, carriers, and the client themselves. In addition, we have exports programmed to handle custom requests from our groups, such as dependent audits and benefit statements. We also utilize the system’s consolidated billing to handle monthly invoice reconciliation. From an administrative standpoint, all of the groups use qualified life events (QLE) and we store a variety of forms and benefit summaries online for employee download. For some companies we directly load new hires, terminations, and changes directly from a client’s census/payroll system file.”
As Young explains, the company has the ability to send a file weekly to all groups that can be loaded directly into their payroll systems without having a conversion program—or worse—manually entering deductions. The export itself is integrated into the benefits system, which can be run automatically. In addition, there is an option to have the file emailed from the system or uploaded to a client’s FTP site. The setup even allows Young to select certain divisions, plans, and providers.
As an example, Conner Strong handles online enrollment and administration for approximately 3,000 active employees of a leading provider of health care services. For this client, change comes in the form of workforce demographics and a high rate of turnover. This client has a larger than average number of new hires and terminations on a weekly basis, which translates to a significant enrollment challenge. They also have a sizable percentage of their population utilizing the web, which translates into a higher level of online preparation and maintenance. Moreover, Conner Strong integrated benefits enrollment with the client’s payroll provider’s solution.
“On our side we had a custom deduction file built and sent that can be loaded directly into their payroll system. The file itself utilizes nonstandard codes and fields specific to the client’s setup,” Young explains. “We send them a changes-only file and a full file every week so they can easily load new hires, set eligibility, and make adjustments and set deductions that correspond with what the employee would see online.”
As vendors increase capability, Conner Strong also needed a solution with extended automation functionality to keep pace with changes in technology, which can be as important as keeping pace with changes in workforce demographics and the benefits landscape.
“We are looking forward to more automation as more vendors increase their carrier interface capability,” Young says. “This [health care] client is a real test of how our benefits enrollment platform functions, and I see them continuing to push the boundaries of benefits administration.”
According to Young, one of the best features of its current enrollment system is its versatility. “The system itself has a myriad of configuration settings that can be used to add, remove, or change text and images throughout the solution provider’s online enrollment site. More importantly, they have or can create interfaces for nearly every vendor across the country that can accept them.”
The benefits enrollment system also serves as a nexus where the interests of all stakeholders intersect and information is kept up-to-date. Robust reporting capabilities ensure that employee data and status changes are current, which is paramount to ensuring the integrity of any corporate benefits plan.
Perhaps one of the most important benefits derived from having brokers serve as a third party for online enrollment and administration is quality assurance, which is especially significant given the pace of change in the benefits landscape. Young notes that brokers can take the time to make sure everything is working properly without being heavily involved in the back-end processes. “This allows the broker to maintain a strong relationship with the client and the provider of the benefits enrollment solution, while also allowing them to offer and be knowledgeable about services they might not otherwise be able to provide.”
Young echoes the sentiment that the changes that are taking place now in the benefits arena are the most drastic changes ever and, as he notes, “will continue to force brokers to stay current in order to survive.”
Best Practices and Best-of-Breed
Flexibility and scalability are the hallmarks of a sound online benefits enrollment and administration solution. However, not all solutions are created equal, especially when it comes to a platform that needs to handle multiple benefits from different carriers, provide accessibility, and empower consumers.
· Seamless, Secure, and Flexible Integration. When multiple vendors are involved, it’s critical that the solution be able to interface on an IT level as well as be compliant with regulatory requirements. From the brokers’ perspective, they must be secure in knowing that the solutions they use and recommend will perform flawlessly and seamlessly. For example, a key feature that is essential in today's rapidly changing environment is electronic data interchange, which provides connectivity among employer groups, insurance carriers, third party administrators, payroll vendors, and brokers to ensure a seamless, transparent, accurate, and secure process.
· Open Access and Ongoing Availability. While there’s no shortage of solutions in the market, a next-generation benefits administration platform can offer much more than just online enrollment. An increasing number of employers are turning away from one-time online enrollment solutions and looking for a “leave-behind system” for benefits administration. One advantage of this type of system is that rather than only having access during open enrollment, brokers, employers, and employees can access it at any time. Leave-behind systems also offer increased HR functionality, including immediate and ongoing access to employee handbooks, carrier sites, claims information, and benefits schedules. Of course, leave-behind systems integrate fully with other functionalities that handle core medical, dental, and vision benefits, voluntary products, and flex benefits, as well as TPA services, and seamlessly works with an existing HRIS, payroll, or COBRA administrator.
· Empowering Consumers. Another hallmark of a best-of-breed enrollment solution is its ability to improve the employee experience. However, it goes beyond the expectation that the process should be accessible and easy. When it comes to benefits enrollment, the key for employees is information—and more of it. Changes to the way health care is selected and utilized will increase the need for tools that focus on empowering consumers. Tools, such as online calculators, facilitate the decision-making process and provide employees with demonstrable evidence to support their choices. For instance, a built-in calculator can project overall plan cost savings for an individual using an HSA and a high-deductible health plan versus a traditional option such as an HMO, accounting for factors such as family size or past health care expenditures. Other tools can simplify complex HSA regulations and calculate an employee’s maximum HSA contribution.
Best of All Worlds
Health care reform will bring unprecedented change, challenging employers to keep core human resources functions—such as benefits enrollment and administration—aligned and in sync. A best-of-breed solution needs to offer flexibility, scalability, and ease-of-use to give organizations the “agility” needed to keep pace and plan ahead. Implementing a system based on best practices, as illustrated by Conner Strong, can also help brokers transform their role, providing clients and their employees with the tools and strategic direction they need to successfully navigate change.
Ja’Nene R. Kane is Vice President of Sales and Operations at Benefitsconnect, a provider of online software applications for the health and benefits industry. Ja’Nene can be reached at 916-421-4000 or jkane[at]benefitsconnect.net