December 6, 2018
Bridging the Gap in Employee Benefits
While proposals are well-automated, and so is policy administration, between the two comes group onboarding. It's a mess.
Onboarding new groups remains an arduous, cumbersome part of the enrollment process for employee benefits insurers. While proposals are well-automated, and so is policy administration, between the two comes group onboarding. And that area has not been automated, leaving a gap that carriers fill with a hodgepodge of methods.
Complexity lies in the fact that each product—group medical, dental, life, vision and disability—requires different data to be collected. But the data gathered during the rating and proposal process isn’t sufficient. The employee’s gender, date of birth, zip code and perhaps salary aren’t enough to issue policies and pay claims.
Besides additional employee information, the insurer needs corporate information, such as affiliates, federal tax identification numbers and ERISA plan numbers. Many employers have multiple billing divisions that pay premiums separately. How to collect that information has plagued insurers for decades.
See also: 4 Key Elements for Onboarding Producers
Two factors compound urgency. First, because about 80% of group plans renew on Jan. 1, insurers face a big crunch in the fall gathering data from paper forms, emails and the like. Additionally, employers—especially those sponsoring small and medium-sized groups—are changing insurers more often as they try to save every dollar on employee benefits. Groups of 50 to 200 lives often go out to bid annually.
Thus, the costs of onboarding a new client can no longer be amortized over five years. Carriers need more automated, cost-effective ways to onboard groups.
Some insurers have tried using CRM systems and other workarounds to improve efficiency. But those attempts have failed, and the process remains largely a manual one.
Enrollment solutions that address onboarding are, however, being developed. Successful vendors will have to provide the following:
Automated data capture. Manually entering information into the policy administration system results in missing data, errors and time-consuming back and forth. It can make onboarding a three-month process.
Effective importing tools will allow onboarding software to import and map data to system variables for seamless integration and efficiency. Additionally, the solution should include a support portal where human resources administrators can log on and enter data right into the system or use the import function to upload the entire groups.
Data integrity. Employee data must be correct and complete when entered. Built-in rules will enforce quality. For example, if a date of birth is missing or a year is entered incorrectly, the software will flag the error and require the user to fix it. This ensures data integrity and accurate rating.
Security. By eliminating manual data collection and handling, and using portals to enter and store employee information, the onboarding system can provide increased data security. It must comply with privacy regulations regarding personally identifiable information (PII), thereby ensuring a secure way to gather and store employee information.
Flexibility. Integrating onboarding closely with both proposal and policy systems is essential to efficient workflow. Tightly integrating it with your underwriting and proposal system will provide flexibility to easily navigate the sold-case process as changes in the group arise after the policy is sold but before the effective date.
See also: How Insurance and Blockchain Fit
Onboarding software ultimately may help transform the entire policy lifecycle.