Broker 2.0: Using Data to Drive Better Benefits
This was originally posted on Lumity CEO Tariq Hilaly's Linkedin.
With healthcare costs rising, it is almost unbelievable that employers and employees don't understand what they are getting for what they are paying for in a system that most Americans participate in - health insurance.
The system is designed to confuse, and many employers rely on their brokers to guide them through the labyrinth that is the American health insurance and healthcare system. The mission of the broker is to be the trusted adviser, to align their incentives around the goals of their clients - employers and employees alike.
This was always a tough task, communicating complex benefits decisions in a way that was accessible and personalized to each person’s unique needs and risk tolerance.
Zenefits called out the fact that many brokers were asleep at the wheel. But they too, had their Icarus moment.
Ultimately, the first wave of technology used to disrupt the system addressed the very real pain of manual paperwork, enrollment and administration. Arguably, this is the low-hanging fruit - automating forms and documents for stressed and harried HR professionals.
But when it comes time to choosing health plans (that annual choice that is akin to doing taxes) employers are still caught in renewal roulette, hoping renewals only come in around 8-10%. Employees are then stuck with confusing math, insurance jargon and an inability to control their own rising costs - paying up to 40% of monthly shared premiums nationally.
In short - it’s still a complete train wreck.
The Broker 2.0 Model - Why Data Makes a Difference
Corporations are increasingly data-driven. Sales, marketing, customer support, operations, you name it; all use data to drive their decisions. Benefits are one of a company’s largest expenses yet employers and employees lack the visibility they need to truly know what they are getting in return for those huge premiums.
Many brokers are still stuck in an old paradigm - defining their job as a relationship manager, rather than a counselor helping companies manage risk and use a data-driven approach. Many companies don’t know how to evaluate their risk because brokers and employers simply don’t have a way to quantify and accurately forecast expected benefits expenses. It’s no wonder annual renewals cause heartburn.
High renewals are blamed on the insurance carriers and many employers don’t demand more visibility even though they can. Those that do often end up finding a solution by moving towards self-funding their plans.
To be fair, there are many great brokers out there that have provided great service to their clients. But what was once a mandate to handle employee questions, negotiate with carriers based on relationships and handle back-end office work is now much more.
The game has fundamentally changed.
Companies are looking for ways to improve benefits without increasing costs -- and data insights are the key to unlocking hidden value.
With health insurance premiums rising 3x faster than wage growth - the endgame must be to use data to ensure employees don't over or under insure relative to needs (a $40B/yr problem nationally), for employers to understand, at a high level, what the aggregate needs of the group are, and most importantly, for the broker/benefits consultant to be able to quantify the needs of the group in order to level the playing field with insurance carriers.
Benefits administration software has traditionally only been built to help employers manage their paperwork and deductions. However, how does that help either the employer or employee make the right health plan choices? We solve this by creating a feedback loop that provides employers real-time aggregated health risk and expense insights, while providing employees personalized insights to take control of their own healthcare costs and to place a dollar value on their health care needs.
So service absolutely does matter - but it’s evolving. We want employers and employees to expect more from their brokers - beyond back office support and an 800 number.
See what you’re paying, what you’re getting, and what you could be paying. It’s all laid out in clear, easy-to-understand terms and dollars - and it’s our mission to not only take care of your paperwork, but to make sure you and your employees unlock better benefits.
Here’s to helping guide you down the path of transparency. Let data drive better benefits - reach out to us!