ADP's new comprehensive research website is only one part of a string of big projects and partnerships the company has launched in recent years.
Benefits service and product providers are constantly on the lookout for new innovations to keep up with the changing marketplace.
ADP, a provider of payroll and benefits solutions, has had a string of changes (product launches, mergers and a new research website) over recent years in order to provide more robust services to clients and the overall benefits industry.
BenefitsPro sat down with Don Weinstein, ADP's senior vice president of product management, at the 2012 Society for Human Resource Management's conference in Atlanta. Weinstein discussed how the company is evolving and why employers are in wait-and-see mode when it comes to plan offerings.
BenefitsPro: Tell me about the new research website (adp.com/research) you've just launched and what ADP's research team offers.
Don Weinstein: We have an in-house market research center and they do about 50 studies a year. We've always had it, but now we're choosing to externalize and take some of the research that we use to inform our clients and push that out into the marketplace.
Every month we also report changes in employment to show where the jobs are.
We also do these quarterly pulse surveys. For example, we're about to look at what's actually happening in terms of how people are responding to the changes in health care reform. As the limits on spending accounts come down from $5,000 to $2,500, do we see sign-up rates for spending accounts drop? How many people max out the $5,000, anyway?
We're going to mine the data and we'll be able to go back and say, how big of deal is this going to be? This shift out of FSAs, into more HSAs, HRAs...what's the take rate in terms of high deductible health plans? We've seen, historically, lots of clients offering them to employees, but the employee sign-up rates have been pretty small. So we're curious to start monitoring the trend and say, if costs are going up, what percentage of those costs are being pushed back to the employee? You can do that via survey data, which is how we've historically done it, but now we also want to do it through big data mining. We've got thousands of clients who are using us for benefits eligibility and enrollment, we're administering their plans, so I think we can get a lot of insight and information out of it.
BenefitsPro: ADP recently released a survey that found employers aren't exactly understanding health care reform requirements. Did that alarm you?
Weinstein: What was most interesting to me about the [health care reform] research was how little the employees, not just the employers, understood what their options were and what the impact of the change was going to be. It was just staggering research for us.
BenefitsPro: How has ADP adapted with the changing marketplace?
Weinstein: We've been really amping up our game in benefits over the last couple years. The acquisition of Workscape was probably a seminal event for us. That was a pretty big benefits administration player.
But then we've added on to that. We bought SHPS, not the whole company, but we bought the spending account management, which really helped us out with HSAs, FSAs, HRAs, on one platform, plus [absence] administration, plus we have the COBRA business.
One of the great [acquisitions] we did is a company called Asparity. It's a decisions support tool for the employee to help them understand their plan options and choices.
As we rolled out the spending account, high-deductible option and at the same time deployed the decision support tool, the take rate on the high-deductible plan spiked dramatically.
We also launched a group called Strategic Advisory Services. We do pre-sales consulting, we do post-sales consulting; We go out and meet with clients and make sure they're getting the maximum value out of leveraging our benefit solutions.
BenefitsPro: What do you believe are the biggest demands of the marketplace right now?
Weinstein: The shift from FSA over to HSA and HRA is probably the biggest one that we've seen. Good for us, because we're sitting on both sides of the equation.
Demand for decision support and more tools has probably been a big driver. I think what we found specifically with health care reform and defined contribution plans -- a lot of people are talking about it, a lot are interested in it, but not that many people yet are ready to act on it. Everybody has been in wait and see mode.
Coming on the backside of the Supreme Court ruling, we expect a lot more people making decisions differently. Up until this point, [we] have not seen a ton of radically different decisions being made.
BenefitsPro: There has been a lot of talk about moving to defined contribution models for health insurance, that it's one of the ways employers can save money on their rising benefits costs. Do you see this path of change happening?
Weinstein: I think the path of change has to happen. We've been likening it a lot to what happened to retirement benefits. We saw the move from defined benefit pension plans to 401(k)s. We're anticipating the same kind of cycle to unfold [to] more of a defined-contribution type model.
How quickly that unfolds [is] hard to say. The shift from DB to DC in retirement benefits has been playing out for 30-plus years. I expect [health care is] probably going to be faster than that. I don't expect it to take another 30 years, at the same time it's interesting to look at [retirement] as a model and say, that didn't turn overnight. But the interesting thing is everybody's talking about it now -- not many people are doing much yet, but a lot of people are talking about it. I think that's the first step to real meaningful change.