For employers—particularly small- to mid-sized businesses where the HR department can be a single employee—the implication and consequences of failing to keep up and comply with changing requirements can be costly.

 To meet these changes, brokers can leverage a new technology model to maximize internal efficiencies—which then can be passed onto employers (and, by extension, their employees).

 A “modular” approach to agency/benefits management technology, where brokers can collaborate with employers in building customized benefits portals, can define—and/or expand—the consultative role.

Ultimately, brokers can automate a range of labor-intensive day-to-day tasks and spend more time doing what they do best, and doing what will pave the way to success and profitability: offering their expertise and counsel. 

 The 2012 Deloitte Survey of U.S. Employers gathered responses from 560 randomly selected employers on a range of issues related to employee health benefit plans. Key findings include: 81 percent of companies representing 84 percent of the workforce plan to continue providing health benefits coverage, employer-sponsored health benefits are not likely to disappear (though financial risk will be shifted to employees), employers do not understand the full scope of the PPACA (particularly on areas intended to improve the efficiency and quality of the delivery system), and while employers are concerned about health costs, they are unaware of solutions that could improve the quality of care and  simultaneously reduce cost.

 Other studies, such as the MetLife 10th Annual Study of Employee Benefits, underscore the widespread—indeed, deeply entrenched—acceptance of benefits as recruitment, productivity, and retention tools.

 However, that doesn't mean businesses will forever accept the status quo, particularly as costs continue to escalate. That begs the question: As organizations look to cut costs, what are the implications for brokers? As commissions are cut, and as the industry moves toward fee-based models, brokers are not only being “squeezed,” they also are being pushed to the margins and must evaluate how to remain viable and re-assert their position in the benefits “value chain.”

From provider to consultant

 Two of the dominant trends in the benefits industry appear to run in completely opposite directions. The first speaks to greater simplicity, as brokers have access to the same range of carriers and plans. While the second, provisions in the PPACA—and its phased rollout—speak to greater complexity.

 The truth is, administering benefit programs is a complex undertaking, requiring assistance on strategy, design, mitigating risk, financing, delivery, ongoing management, and communication.

 Simply put, the complexity, costs, and risks associated with employee benefits underscore the value for consultants with specific expertise, guiding organizations toward efficient, cost-effective benefits programs that align with broader business objectives. So, in spite of the challenges brokers today face, there are opportunities for those who are able to demonstrate the bottom line value of their expertise.

 Brokers looking to differentiate themselves by moving into a more consultative role can do so by customizing technology solutions to each customer, using the iterative “discovery process” to get a better understanding of their customer's challenges, which builds trust and the foundation of a solid business relationship. Here are some things to look for in using technology to foster the broker-employer “dialogue.”

Flexible modular solutions. A benefits solution based on interconnected modules by definition gives the customer more choice. This enables the broker to engage the HR administrator in an in-depth conversation around their overall benefits strategy, the shortcomings of the technology they're using, their plans over a one- or two-year horizon. During the course of this exchange, the broker can home in on the modules of most immediate value. Moreover, a scalable solution that has the ability to grow as the customer's needs grow or change, further sustains dialogue.

Robust benefit portals. For several years there's been a move toward consumer-driven health care, where employees are given the tools and resources to take more ownership of their benefits and health. A company health portal that clearly and effectively routes users to the information and support they need—when they need it—can dramatically increase engagement and self-service. Brokers can demonstrate the efficiencies derived from a well-designed portal that not only automates a range of labor-intensive processes for employees (enrollment, access to documents, price comparisons, FAQs, etc.), but also frees up HR “bandwidth” to attend to other tasks, maximizing their productivity/value to the organization.

Secure communications capabilities. Provisions of PPACA have added to the existing communications challenges employers face. For example, failing to distribute and track the receipt of Summary of Benefits and Coverage documents can result in non-compliance with the ERISA disclosure requirements of PPACA—at a cost of $1,000 per employee. Brokers can take the lead and demonstrate their expertise—and value-add—by helping to implement a benefits portal that simplifies administration and assures compliance with an employer's communications requirements (SBCs, open enrollment), as well as their needs (employee handbooks, total rewards statements.)

Case in point

Stacks & Associates, a health care finance management company serving small- and mid-sized businesses, is a model for brokers looking to remain competitive in a changing market rife with uncertainty.

 Small- and mid-sized businesses typically have thin HR support; they need expertise and guidance on remaining compliant with new provisions in the PPACA, as well as more day-to-day support on benefits enrollment, communications, and other labor-intensive HR tasks.

 Stacks & Associates was fortunate in that it didn't have to make radical changes to its business model; founded two years ago by industry veteran Doug Stacks, the company from the outset differentiated itself on its support—and on providing small- and mid-sized companies with HR backup.

 Then, on a recommendation from a colleague, Stacks implemented an HR/Benefits platform that enabled them to create self-service portals tailored to each of their employer groups. In addition to making their own internal processes more efficient, Stacks was able to streamline HR and benefits processes for their clients, providing everything from online enrollment to an HR resource library—for administrators and employees.

 As important, the platform simplifies compliance with the new SBC provisions. The initial implementation of the platform also prompted more client support phone calls—which provided the firm with an opportunity to engage with administrators and particularly with employees, and provide one-on-one support.

Bolstering value proposition

Despite steady cost increases, companies still place a high priority on providing affordable, high quality health care—as well as on finding ways to control these costs. HR is looking to increase “consumerism” while adapting health plan design to the changing regulatory environment.

 Brokers able to demonstrate their value—from plan design to implementing technology that assures compliance with SBC requirements to holding down costs—are best positioned to successfully compete in today's uncertain and changing environment.

 In sum, brokers can use technology—specifically one that can be customized, lending itself to deep client engagement and a meaningful discovery process—to redefine their role as indispensible business partners, enabling them to differentiate themselves from the competition and increase their book of business. 

Bret Spinks is vice president of marketing for BASIC Guru, a leading provider of HR and Payroll software tools and services. Contact Bret at [email protected].