As The Dust Settles: 3 Permanent Changes In Benefits

A small but significant list of trends that will considerably impact employers and brokers alike

If you’re reading this article, you know the role that employee benefits play in organizations of all shapes and sizes. Put simply, benefits have been playing an increasingly critical role for decades in helping companies find, hire, and keep the right people. More recently, benefits have gotten wrapped into newer people strategies — for example, supporting the employee experience, the customer experience, and the company brand.  

But 2020 was different. In fact, 2020 was quite possibly unique in the number of events — some related and others not — that affected so many lives around the world. Hidden among all of those occurrences (or maybe as a result of many of them) was an almost palpable transformation in how companies take care of their people. And within the transformation of how companies care for their people came one change overarching in employee benefits from which there will be no turning back: 
 

What was once considered the standard package of employee benefits has absolutely been left behind. The traditional, medical-plan-driven benefits package that has been undergoing tweaks and fine-tunings for the last 20 years is history. It simply no longer serves employers or their workforces.

As a result, you can find any number of benefits trends to anticipate. Many may take years to reach fruition and implementation. Others, however, shine as brightly as the North Star on a clear winter’s night and are eminently accessible. Here are three highly actionable, very significant benefits trends that have changed forever, and that HR and the entire HR community should consider.

Trend 1: The Front Door to the Employee Portal Will Be Through a Wellness Platform Rather Than Through Medical Benefits

Arthur J. Gallagher’s latest U.S. pulse survey found that despite economic uncertainties stemming from the Covid-19 pandemic, employers are continuing to invest in HR technology. Nearly 7 in 10 (69%) employers that participated in that survey expect to expand or replace their HR technology by 2022 — slightly higher than last year. Large employers expect their healthcare benefit costs will surpass $15,000 per employee in 2021. Of course, medical benefits will account for the lion’s share of employee benefit costs. 

But medical benefits per se will no longer be the entry point to what now and forever will be a much wider array of benefits, care, and services — a menu of services and products that address the whole person. Welcome to the wellness platform — and with it, a much more proactive and holistic approach to employee well-being. This means, by default, the traditional benefits platform is due for a significant facelift. 

Employers have already begun gravitating toward integrated healthcare benefits to improve engagement and patient experience, as well as to lower healthcare spending, according to a report commissioned by Anthem, the largest among the Blue Cross–managed healthcare companies. In its report, Anthem cites research that shows:
 

• 56% of employers are integrating benefits, an 11% increase since 2018 and a tipping point with the majority of employers now integrating.
• 71% of those employers are integrating with a single insurance carrier vs. multiple carriers.

These are benefits strategies that connect pharmacy and ancillary (dental, vision, disability, absence management, Employee Assistance Program (EAP), and supplemental health) data to an employer’s health plan. Actionable data is shared among doctors and other healthcare providers so they can better diagnose and treat members, detect coverage gaps, and guide employees toward prevention and care management.

But this turns out to have been only the tip of the spear, the beginning of what is transforming into benefits administration technology that is no longer centered on a rearview-mirror approach to healthcare — the traditional approach that’s based on treatment. Instead, the trend is toward a portal based on nourishing employees and their families — an approach centered on prevention rather than on medical care and prescriptions. In other words, employees want, and times have changed to demand, a wellness portal to support a holistic approach to nourishing employee well-being. 

Think of it as an online hub that serves as the single point of access to health and wellness information for each employee and for every benefits administrator. The trend is toward integrating a range of services (not just treatments), including personal health records and health risk assessments, as well as educational content, wellness challenges, and resources for mental and financial well-being.

“What we have learned,” says Brian Kropp, chief of research in the Gartner HR practice, “is that if we help employees support their personal lives more effectively, not only do they have better lives, but they perform at a higher level as well. 2021 will be the year where employer support for mental health, financial health, and sleep will become table stakes of the benefits offered to employees.”

Trend 2: The Role of Voluntary Benefits Has Changed, Becoming a Means of Providing Greater Support for Employee Well-Being — Without Breaking the Bank

“Like it or not, employers play a central role in the physical, mental, and financial wellness of their employees,” the B2B marketing agency The Starr Conspiracy summarizes in its 2021 brandscape, Workplace Well-being: The New Reality. “The response to this reality will have the most significant impact on employer brand — both positively and negatively — in the next few years.”

That sentiment is echoed throughout the employee benefits ecosystem. It’s a sentiment that can’t help but embody itself in a new user experience for employees and a new obligation for employers.  

“As we look ahead to 2021, and as the lines between work and home continue to blur, it is critical that HR leaders continue to take a people-first approach,” Wendy Edgar, EY’s America’s HR director, said in a published interview. “A top priority should be providing employees access to the tools and resources needed to instill resilience, both personally and professionally, and to support their overall well-being.”

Greg Wilson, head of workplace solutions at Ayco, a Goldman Sachs Company that counsels more than half of the Fortune 100, says 2021 should be a time for HR leaders to reassess their benefits offerings, particularly in light of employees’ growing financial and mental health concerns. Wilson and others argue that it’s time for employers to focus on what he called “more permanent solutions for helping employees handle the stress and anxiety of the pandemic and increased work-life balance struggles.”

Voluntary benefits have already begun moving much closer to center stage on the employee well-being platform, as employers and insurers realize their potential to reduce costs and boost engagement, retention, and productivity. Employers will now increasingly assist employees to not only get back on their feet but stay on track with voluntary programs including:
 

• Short- and long-term savings programs supported by financial wellness coaching.
• Mental well-being solutions, programs, and apps.
• Caregiving resources, as the need for childcare resources continues to grow not only because of the pandemic, but as family dynamics continue to change.
• Budgeting and money-tracking apps, and other financial tools.

Trend 3: Reconciliation Is No Longer a Manual or Spreadsheet Process

This critical 2021 trend may not seem as sexy as the move to employee wellness portals and offering a wider array of life-enhancing voluntary benefits. But the trend away from manual or spreadsheet-based reconciliation processes represents an immediate transformation in HR technology. It is, in fact, already empowering organizations to claw back huge amounts of dollars they’ve been losing through now-outmoded ways of processing benefits invoices from carriers.
 

• The Integrated Benefits Institute has reported that U.S. private employers spend more than $880 billion annually on healthcare premiums. The institute also found that a growing number of those employers are starting to see an increasingly huge cost stemming from how they handle invoices for those premiums.
• The Aberdeen Group, meanwhile, found that 12% to 15% of all billing from benefits carriers contain errors. In a company with 250 employees receiving benefits, billing errors could amount to over $250,000 a year. Current methods of processing those invoices create billing errors of at least $10 billion a month (not to mention significant write-offs for employers). 

Assuming employers have a 10% cost of capital, even if employers apply manual or already-outdated reconciliation technology and eventually recoup the money lost to benefits invoice billing errors, they have $1 billion tied up and unavailable to them every month because of costly timing delays and mistakes in premium invoice processing.

The reason is something called benefits cost leakage. It can occur every time an employee starts, stops, or changes benefits in an organization for any reason at all — every time someone onboards, has a qualifying life event or a change in status, is terminated, or retires. The numbers are huge. The Workforce Institute says that in 2018, 41.4 million U.S. workers, more than 27% of the workforce, voluntarily left their jobs. You can add to that number changes in benefits as a result of new hires, the addition of newly eligible dependents, terminations, and more.

The way leakage happens during those changes in benefits is actually pretty simple. But without the right HR technology, it can be incredibly time-consuming and difficult to detect and fix the steady drip, drip, drip of cost leakage. Most companies still handle employee plan enrollments and benefits changes using EDI technology or manual data entry. HR often manages reconciliation using a spreadsheet (even an automated version) — often one or two months after a benefit change has been triggered.

Carriers, meanwhile, often require that billing discrepancies be identified within 60 days. The outcome is that employers are often left paying for premiums that should never have been charged. This happens to companies of all shapes and sizes.

The trend away from the traditional reconciliation to solve the problems lies in Robotic Process Automation (RPA). It’s a technology that basically mimics human interaction with web browsers and web-based applications to enable them to perform nearly any action a user could perform — say, retrieve invoices from a website, run reports, download files, and much, much more. Further, RPA technology can manage data and workflows from the plethora of platforms that churn out benefits-related data and create multiple sources of workflows. 

The world of employee benefits processes and workflows is, in fact, exactly where RPA technology can really do the things it was designed to do:
 

• Downloading and comparing long lists of invoice information.
• Identifying information that doesn’t match between systems.
• Identifying changes to existing data.
• Identifying variances and tracking to resolution.
• Integrating any number of carrier and HRIS connections, to enable coordination of  important data flow through existing user interfaces.

RPA may not have the sizzle of an employee wellness portal or financial coaching, but it’s a third 2021 trend in HR benefits from which there will be no turning back. 

Author Bio 

Doug Devlin is the Co-Founder and Chief Executive Officer of Tabulera. He is a frequent speaker and article contributor at the National Association of Professional Employer Organizations (NAPEO) meetings and was the Chairman of the NAPEO Accounting Practices Committee. Visit https://tabulera.com/ Connect Doug Devlin