A Fintech Approach to Better Employee Benefits
My background in fintech combined with an awful experience navigating health insurance for a chronically ill loved one is where the Lumity story starts.
As a co-founder of Motif Investing, making employee benefits decisions fell on my shoulders. And the lack of visibility drove me bananas. Then, in 2014, when my wife became seriously ill, one small comfort was that I thought we’d chosen the richest, “best” health plan.
We were in for a rude awakening.
We found out the plan’s actual coverage was… I’ll just say it was less than ideal. And I was extremely upset that I couldn’t get straight and simple answers from my broker at the time.
As a founder, I knew exactly how much we were paying in broker’s fees. So the lack of service added fuel to my frustration.
Any of us could encounter a chronic or serious health issue.
I realized that my experience wasn’t all that unique. I’m just one of the millions of Americans who have found it exhausting to find answers and experts during a time of emotional stress and anxiety.
I resolved to do something about it. My personal mission was to take on an opaque and complicated health insurance ecosystem, crack open its shell game, and provide visibility and guidance to employers, employees, and their families.
The aha moment.
And here was the aha moment: I could apply what we were doing in the fintech space to benefits.
Back in 2010 when I co-founded Motif Investing, the fintech space was in its early infancy. We built a sophisticated technology platform that processed millions of trades and client transactions with clearing houses and other counterparties.
Motif’s primary philosophy was to bring the sophisticated bundling of custom-built funds to the consumer in a simple, easy-to-understand interface.
Fast forward to today.
The largest companies in the U.S. are forming their own health alliances—hiring luminaries like Atul Gawande to build data-driven captive systems.
But 95% of us don’t work for those large companies. And, most employers have no idea how their broker's commission structure works against them when it comes to what they pay for health plans.
If you're wondering what you're up against, it's well worth your time and money to read this ProPublica exposé: Insurers Hand Out Cash and Gifts to Sway Brokers Who Sell Employer Health Plans:
Human resources directors often rely on independent health insurance brokers to guide them through the thicket of costly and confusing benefit options offered by insurance companies. But what many don't fully realize is how the health insurance industry steers the process through lucrative financial incentives and commissions. Those enticements, critics say, don't reward brokers for finding their clients the most cost-effective options.
Lumity is built for the rest of us.
Once a year, an employee is asked to make a complicated, high stakes decision that could impact their life, financial wellbeing, and the lives and health of their families.
Lumity’s mission is to help employers and employees choose better. Lumity brings the efficiency and consumer-driven focus from fintech and applies it to the health insurance ecosystem—to deliver a modern benefits brokerage and a better employee experience. We combine data and expert benefits support so employers pay fair rates and their people have better outcomes.
Employer experience matters
What matters to the business:
- C-levels won’t sign off unless the numbers fit within budget (or ideally under).
- Finance wants “what if” scenarios to forecast and scale headcount.
- Talent can’t recruit without a solid, competitively benchmarked benefits program.
- People Pros want to use money saved on health plans to fund the initiatives they care about.
- People Ops can’t scale without a partner who can handle the heavy lifting:
- Insurance and carrier operations
- Day-to-day account management
Employee experience matters
What employees want:
- A concierge service that can unblock them on HSA/FSA/Commuter and ID card issues
- A health insurance advocate that can help address questions and claims issues
- Straightforward information to help them make benefits choices that best meet their needs and budget
- Modern, on-demand interfaces (web and mobile) to access benefits information and expertise
We deliver a better experience for employers and their employees.
Our premier fintech clients such as Wealthfront, Betterment, Addepar, and Robinhood can attest to our approach, and we strongly believe that applying the same data-driven and modern approach from fintech to employee benefits can meaningfully improve your company’s overall experience.
For more on my backstory and my take on comp and benefits, culture, mentoring, and leadership: