As employer groups concentrate on human resource and other employee benefits strategies, one of the decisions many are mulling is what their involvement will be in the employee benefits process in the future.A recent survey by Washington, D.C.-based Watson Wyatt reveals that some employers are talking about getting out of the healthcare game altogether and giving their employees lump sums to go purchase their own care-maybe through Web sites that aggregate individual buying power.
This course of action would have great implications not only on employees and the autonomy it would provide them, but on the broker community, which works with employer groups to pinpoint the right benefits package to fit their needs. If more employers wash their hands of the process-and individuals independently select their coverage-brokers could be squeezed out.
But the Watson Wyatt survey states that employers "want to bring employees into the decision-making process, but are not yet ready to throw them into a healthcare market that is not designed for individual purchasers. For that reason, we still see many employers seeking to make their current arrangements work better."
Good news for brokers
That's good news for brokers who-like benefits managers and employees-are eager to implement Web-based solutions to participate in the sales and fulfillment process. Hartford, Conn.-based benefits provider Aetna Inc. offers a version of its EZLink program with a front-end interface for brokers.
"Brokers have a separate window into EZLink, with their own home page to upload requests for applications to Aetna and transmit data back and forth regarding existing client accounts. So far, we have about 500 brokers who use EZLink for this purpose," says Ralph Borzillo, director of e-business, middle market accounts, for Aetna Inc., which serves 12 million group insurance customers.
Another avenue available to brokers is alignment with third-party providers who establish relationships with both brokers and insurers. Some of these providers-once regarded as aggregators that connected brokers with insurers-have begun to emphasize technology and tools to support brokers over being online marketplaces.
This shift was born of necessity. "Even a good broker often only knows what's going on in his world," says Bernard DiFiori, president and CEO for Dallas-based BenefitMall, which has affiliations with more than 18,000 brokers and a stable of insurer partners. "We've begun to emphasize IT services that put tools in brokers' hands so they can better understand the marketplace-taking raw data and converting it into knowledge to better pinpoint needs, and providing information about legislative and regulatory developments that affect employee benefits."
A few years ago, providers such as BenefitMall might have placed a greater emphasis on the tools that support brokers in the selling phase of the process. Over time, it's become abundantly clear that benefits renewals are indeed a trouble spot for brokers.
"We recently launched an automated renewal piece for brokers," explains DiFiori. "Every month, a number of existing accounts come up for renewal. In any one month, a broker might have to prepare 30 cases for renewal.
"We've automated the renewal process whereby renewals are housed in our database and renewal cases can be managed and tracked. This frees brokers to attend to other pressing matters."
Under BenefitMall's operating policy, brokers use BenefitMall free of charge with BenefitMall's carrier affiliates paying BenefitMall a commission when business is placed.
As brokers are better able to identify benefits packages for employer groups, employees will then be able to take these options, customized to fit their needs, and proceed to select benefits.
An unknown quantity
But there is still a great deal of education that employees need to make Web self-service an exact science. Employees face a challenge in selecting the precise amount of life or disability coverage. They usually select less or too much coverage than they need.
"Disability coverage for many employees falls way down the line in benefits priorities," says Bob Reiff, vice president sales and marketing, employee benefits, Portland, Ore.-based The Standard Insurance Co. of America. "It's really an unknown quantity. We can offer tools that provide statistics about disability coverage. We'll provide information about how the incidence of disability affects home foreclosures."
These research tools are invaluable, but all told Web-based employee benefits solutions, many industry observers agree, still have a lot of heavy lifting to perform before the work is compete.
"When it comes to Web-based employee benefits programs, bottom-line dollars are playing a role in overall adoption levels-both in the workplace and with brokers," says Johnmichael Monteith, who heads the IT unit for Bellvue, Wash.-based Parker, Smith and Feek, a middle-market brokerage firm that provides employee benefits packages to employer groups. "Overall, in looking at this whole proposition, I don't yet think the rubber has hit the road yet."
