While the insurance industry as a whole has made some strides in deploying technology to achieve efficiencies, the area of employee benefits is underserved. Generally, employee benefits remain mired in traditional low- or legacy-tech ways of administering these all-important amenities, hindering the industry’s ability to create much-desired modern solutions and elevate experiences to levels we are all accustomed to across banking, ecommerce, entertainment and more.
Employee-sponsored benefits such as health insurance and retirement plans play an essential role in American life, yet they are hard to access and use. Just 9% of employees understand benefits terms like coinsurance; meanwhile, choosing the wrong health plan can be a $2,000 mistake.
A recent Harris Poll consumer survey of 2,000 employed adults with employer-sponsored insurance benefits reported that nearly half the respondents cited frustration when using their insurance benefits because they are hard to understand. Meanwhile, two in five indicated they have received inaccurate bills, been unable to access care or been harmed to delays because of errors in their insurance coverage.
In an era when consumers expect a seamless experience across the board, insurance carriers must focus on elevating the customer experience to keep pace. This shift is forcing stakeholders to apply more “hands and heartbeats” to achieve that experience – when much of that work should be automated and streamlined, and personal touches could be better applied to functions that truly require and benefit from human intervention and care.
Sources of Resistance
Why is benefits lagging? In a single word: acquiescence.
The status quo is often the sector's biggest hurdle; accommodating a lack of technology and services with workarounds hinders the industry's ability to innovate. Paper-based systems and manual data entry dominate industry workflows, making it very challenging for benefits software, insurance carriers, brokers and employers to keep key employee information in sync.
Other barriers to digital transformation in the benefits industry include:
- Slowness in developing a connected industry mindset; data is typically thought of in silos
- A lack of a single group or person being accountable for improving outcomes
- General lack of awareness that technology serves data but that people should serve customers
Factor in the inherent difficulty of adapting older systems to receive a high volume of data while ensuring the integrity and cleanliness of that data, as well as managing security and privacy concerns, and you’ve got a significant amount of industry inertia to overcome.
See also: Digital Insurance 2.0: Benefits
Embracing a Tech-First Approach in Benefits
The opportunity lies in adopting a tech-first approach to benefits design and delivery. Legacy manual approaches need to be contrasted with everyday processes like opening a bank account, applying for a mortgage online or moving money to/from a 401(k). There is a need to boost efficiency, replace antiquated processes and upgrade to more modern systems. In 2023, carriers continue to rely on paper, web portal entry, email, phone and electronic data interchange (EDI) for data exchange to support important functions of enrollment and member changes. This is unacceptable.
Everyone across the industry is being asked to do more with less — while advancing the business. Sometimes, this means using fewer employees or deploying new technology to realize efficiencies. However, technology can be costly, as well. The ideal balance is to identify those areas where technology can be effectively implemented, such as handling the synchronization and validation of data. Doing so frees up “human hands” to focus on activities that create the experiences that drive net promoter scores, boost customer satisfaction and instill brand loyalty.
Taking a tech-first approach that prioritizes modern data management will boost efficiency and help create enhanced, frictionless benefits experiences. These will include customized benefits options, a streamlined buying process and the deployment of people to the “human side” of the business. With a tech upgrade, the industry can do more with less and ultimately create better outcomes for all.