EMPLOYEE BENEFITS IN THE DIGITAL AGE
I have been working in the employee insurance and benefits world for almost 5 years, and I have seen some drastic changes in that time. Most recently, companies like Zenefits and Gusto have emerged to try to disrupt the sleeping giants. Their model is centered around HR software, and they use it as a foothold from which they hope to gain further traction. Ultimately, what they really want, is to become your Broker of Record or BOR for short. Zenefits in particular has had staggering success in doing this over the last 2 years, and because of this, brokers are changing the way they are doing business. Is this bad? Well, not necessarily, but truly it depends on how they are reacting. With more millenials in the workplace, it stands to reason that we should address their needs and their preferences, specifically when it comes to enrollment and employee data. This is something that can be accomplished with a good HRIS solution.
The question is: Is a good HRIS solution a strong enough reason to change your broker?
The answer to that is: perhaps, but it depends.
If your broker is unwilling to address your needs for digital solutions, or doesn't seem capable to handle them, then perhaps it is time to find a new broker. However, if your broker is willing to sit with you and help you find and select the right HRIS solution, then you may not need to jump ship. The truth is, Zenefits gives it's platform away for free, with no requirement to give them a BOR. However, you can expect to be cajoled constantly until you do. So why not give them your business? What is this BOR anyway? I'll explain.
The BOR entitles an individual or firm to receive remuneration from the total premium being paid by your company for their benefits. In this way, a broker isn't directly charging you a fee for their services and expertise, they are receiving compensation from the carriers (Aetna, Blue Shield, Delta Dental, etc.) In return, they are expected to provide you guidance and service related to your benefits.
In my conversations with Zenefits, I have been told by numerous people that they are not hiring people with an insurance background, but instead are pulling people who have SaaS (Software as a Service) sales backgrounds. Once there, you are expected to get your insurance license as quickly as possible. Unfortunately, just the act of obtaining an insurance license, does not make you an expert in the ever-changing, extra-complicated world of employee benefits. Turning over something as important as all of your employee benefits control and enrollment needs to a group of very green insurance agents, may not be the best idea. Once you become a client of Zenefits, you will not speak to the representative who sold you, instead you will be routed to Customer Care when you call. Having someone pay you a visit to help explain options and details to you or your employees is not an option either. Everything must be done on their platform, which is online.
So what should you look for in a broker? Here is a list of a few key things that any good broker should have:
- Local consultants
- An enrollment team or company
- Extensive knowledge of HealthCare
- Cost-cutting strategies
- ERISA compliance resources
- PPACA knowledge and resources
- Section 125 understanding and maintenance
- A great reputation for service and attention to detail
- Understanding of how to best use technology to assist with enrollments and data
- The ability to explain all of your options and requirements in simple terms
- The ability to help boost participation in your benefit offerings
If your broker can provide all of this, then you are in good hands. Finally, you have to decide for yourself if you want a software company that knows a little about benefits or a benefits company that knows a little about software (or a lot). The fact that Zenefits is shedding some light on the need for integrated solutions and better access to technology is a good thing, but don't throw the baby out with the bathwater.