If your agency is in the process of choosing a benefits administration platform, there are seven criteria you should use to compare vendors. I’ve covered the first six — integrations, funding, licenses and more — in previous columns. Here, I’ll cover the final criteria: the software vendor’s partners.
Every online benefits system wants to one day be integrated with all carriers and all payroll providers. But these integrations take time. Besides the technology considerations, there is the people aspect. Most integrations in our industry require meetings, negotiations and working the project plan into the already-existing workload. As a result, no system is integrated with everyone today.
When you evaluate the various systems, you should break down your questions about the system’s partners into the following categories:
- Health, dental, and vision carriers
- Life and disability carriers
- Worksite carriers (e.g., critical illness, cancer, accident)
- Nontraditional (e.g., identity protection, prepaid legal, pet insurance)
- Payroll companies
- General agencies
Let’s take these one at a time.
Health, dental, and vision carriers
On the integration side, all of these carriers are required to be able to accept the government-enforced HIPAA 834 file format for EDI purposes. As a result, if the software company you are considering has integrations with a lot of these carriers, it should be able to get a new integration set up with any of these carriers in relatively short order.
Beyond integrations, some software companies may also be producing the bill for these insurance companies. In other words, instead of the insurance company sending the employer a bill based on the eligibility information it received from the benefits system, the bill is just produced by the benefits system itself.
Life and disability carriers
With these benefit types, you want to stay away from traditional “integrations” with the carriers.
Why? Because there is not a good standard governing how integrations work for these types of benefits. HIPAA 834 is sometimes forced on these benefits, but it does not work well. Furthermore, these carriers do not need eligibility information in the same way that the medical, dental, or vision carriers do. They don’t need eligibility information because there are no doctors or other medical providers to whom they need to disclose who has coverage and who does not.
The bottom line is that, with these benefit types, it is natural and appropriate for the benefits system to be the sole keeper of eligibility information. This is similar to the self-accounting approach that larger employers have been taking to these types of benefits for years.
Worksite carriers (e.g., critical illness, cancer, accident)
Most brokerages have not introduced these benefit types to their clients to the extent possible. There are a variety of reasons for this, but it means that the ability to begin offering these benefits in a more effective manner is an opportunity for most brokerages.
When it comes to these types of benefits, we are most often asked about Aflac, Colonial Life and Allstate Benefits.
As things stand today, most of the carriers we see in this space are unable to integrate with online benefits systems in a way that will result in a happy client and broker, with some exceptions.
This does not mean that a brokerage cannot work with other carriers. You absolutely can. The best approach, however, is most likely going to be to provide information in your system saying that these products are available, describing what they are, and then enrolling them outside of the system. This is a perfectly acceptable solution that will yield a much happier client than trying to force these carriers’ products into your core system. Most are waiting to do that until these carriers have API capabilities.
Nontraditional (e.g., identity protection, prepaid legal, pet insurance)
Few groups in the 10 to 500 space offer these products today. Larger employers, however, do offer them and so have an edge when it comes to competing for new hires in that they have a more robust benefits package. Leveling the playing field by helping your clients consider them is another opportunity.
Because these benefit types are relatively new and may not be subject to insurance rules and regulations, you should find that their technology capabilities are relatively strong.
Most of your clients are going to want the benefits system they use to “talk” to their payroll system.
Historically, the way this worked was via a spreadsheet upload from the benefits system to the payroll system. Increasingly, employers are finding this to be tedious and are insisting on real-time, API integration.
Because this functionality is so widely desired, many online benefits systems are opening up their own API to allow for faster time-to-integrate with more payroll companies. After all, there is an entire universe of payroll companies with loyal clients who are among your book of business.
When evaluating platforms, bear in mind that this functionality will be something your clients ask about and you’ll want a partner that knows what it is doing in this area.
Some brokers do not work with general agencies at all. Some work extensively with general agencies. The extent of how important it is to you whether your system is supported by general agencies is directly related to how much you work with general agencies.
If you work extensively with a given general agency, they may have a system that they sponsor in some way that they can show you. And you should absolutely consider using it.
Ultimately, you will want a direct relationship with whatever benefits system you recommend to your clients and the ability to add whatever products you want, whether your GA has an override relationship with the carrier or not. Therefore, when evaluating your GA’s system, make sure to have a handle on the answer to what extent your GA will support products on the system for which it does not receive an override.
Bear in mind that when it comes to integrations, functionality is largely based on carrier capabilities, not the software itself. As carriers develop more robust integration options, benefits administration software companies will have more partners. Until then, evaluate software based on the above carrier categories to determine which vendor is the “product leader” for your needs today as well as is most likely to be first-to-market with new integrations as they become available.