Tag Archives: group market

Integrating Group Life and Voluntary Benefits

Group and voluntary benefits providers vary in a hundred different ways. If you are a supplementary benefits provider that only provides one product to the group market, your data integration issues with multiple brokers and employers may still be complex. The more products you sell into the group and voluntary space, the more difficult your data integration will be.

Let’s say that your organization carries group life, voluntary supplemental life, dependent life, LTC and AD&D products. Without modernization, it is likely that your organization will have several hurdles to surmount. The first is to develop one consolidated repository from all of the data that is likely held on multiple systems. The second is to make that set of data available to the many different people and institutions that have a vested interest in access. On the flip side, insurers need to be able to receive data efficiently, as well. Carriers must be able to import data received from various benefit partners into their source systems through a single point of entry. Without this, entry or import issues could lead to benefit integrity issues, where data is are correct on one platform but incorrect on another. These types of basic data errors will quickly erode relationships with employees and benefit partners.

One way to help alleviate potential data issues is for insurers to focus on providing simple products with simple rate structures. Focus on guaranteed issue limits. Anything that has to be approved or underwritten after payroll deductions begin will cause deduction and billing issues. An exception could be made if an insurer is able to provide automated underwriting decisions at the point of sale.

The data requirements for employers and enrollment partners vary widely (in part because no standards exist), which places more of the data integration responsibility on individual carriers to interact with individual employers or benefits companies. So, the easier it is for your IT teams or vendor partners to make those connections, the better off you are likely to be when it comes time for an employer to renew their contracts. It makes sense to pursue a course that keeps your systems agile.

What about a fresh start?

When it makes sense, we regularly recommend that, instead of attempting to migrate current and past business to a new platform, insurers start fresh with a new system dedicated solely to the one program. If an insurer is moving into a new market or launching new products, why not learn from past system issues and product issues and embrace a clean slate, eliminating the need to translate and carry cumbersome legacy programming into a new environment? Start with a brand new set of products and filings, a brand new marketing plan…perhaps even a brand new name to signify the difference.

Within group and voluntary benefits, this approach makes its case when looking at just a few of the benefits, including simplified testing, fewer resources required to launch, less expense, less risk to the old system and old data and dramatically increased flexibility in data usage, capability development and integration points. Managers who touch the system are far more likely to trust the data they see, reducing a “checks and balances” approach to billing, reconciling, correspondence and a dozen other areas where the need for clean data and quick visualization are essential.

We’ll discuss more about data strategies in the coming months, including ways you can build effective technology bridges and keep a high level of data integrity.

The Shifting Sands of Group Benefits

If there is one thing that is consistent within the group and voluntary benefits market, it is that nothing is consistent. From year to year, market changes make it very difficult for insurers to get settled into a comfortable framework for moving forward.

Consider what insurers have to contend with:

  • Shifting mandates and regulations within the Affordable Care Act.
  • An increasing number of benefit administration firms and benefit enrollment partners.
  • Employer interest in increasing the number and type of voluntary benefits to produce well-rounded packages.
  • Employer requests to administer products and billing in ways that fit their systems and processes.
  • Increased need for accessible reporting so HR departments can track usage within their employee populations.
  • Market saturation from companies wanting to enter the voluntary and worksite space.

Though we can’t cover solutions to all of these in this blog entry, we can quickly look at strategies that make sense with the increasing number of players in the market.

In the past, carriers had a very close relationship with the employer market. Because of the complexity of employee benefit communication, especially in the large employer market, employers are engaging benefit administration firms and benefit enrollment partners. These partners will often offer a free or subsidized service; they bring relationships to the carrier and earn commissions that offset enrollment cost for the benefit partner.

The key benefit partners in the industry have begun to integrate with carriers before the sale. This allows a benefit partner to offer multiple carrier products for a single employer. Further, this will help ensure that the communication between the benefit partner and the carrier is predictable. Because brokers and benefit partners are, more than ever, responsible for bringing the benefit relationship to the carrier, integrating with them is as much a strategic need as it is an efficient way of transferring data.

Insurers are attracted to the group market because one sale means hundreds or thousands of premiums. Catering to and selling through brokers and benefit partners takes that multiplication to exponential proportions AND supplements an insurer’s own sales efforts. But many brokers will only carry lines of business that are simple to administer and prepared for the higher volume from a wider array of companies. Both of those questions are answered with technology solutions.

Most insurers are by now familiar with shifting sales channels. The difference in this case is that group benefits providers need to prove their abilities to meet employer needs and remain flexible to broker requests. In this and other areas, insurers need to prepare their systems for the future by building a foundation that is solid and proven, yet agile enough to handle the market’s unpredictability.