The Wrong Way to Use Technology, A Case Study for Employee Benefits
Technology can do a lot of wonderful things, but it can’t shine sh_t.
I remember my first open enrollment event. I was an account manager and my client was a well-known national car rental company. Wearing my very first business suit from Express with cute Nine West heels, I strutted into their office at O’Hare International Airport awkwardly hefting a 25lb box of enrollment necessities.
I neatly stacked our brochures highlighting the value, cost, and function of the six different coverages my company insured for the group. I was excited to lay out our colorful little band-aid packs, pens, and stress balls (and shamelessly took some band-aids to ease the blisters forming from the jaunt across the airport parking lot).
These events were awkward to say the least. Employees walk by timidly asking for a tchotchke with wide eyes and a bead of sweat on their forehead. What would taking this stress ball cost them? A few minutes of their time to learn about their disability insurance? A 3-hour timeshare presentation? Employees often feel like they are being set up to buy things at enrollment fairs, when in reality most of the insurance is already paid for and provided to them. Our purpose of attending is to make employees aware of our brand, our value, and allow them to ‘ask the experts’ regarding their specific needs or concerns.
For decades employers and insurance carriers have struggled to make annual enrollments appreciated for what they represent between employers and employees: You take care of us, and we’ll take care of you . After all their planning and communicating, the end result often ends in:
poor participation (ie: the number of employees who enroll in additional benefits they pay for)
enrollment forms submitted late or not at all
employees with no better understanding of the benefits provided and no greater appreciation of the value their employer was offering.
Before the internet, many a tree perished in the effort to inform employees of critical information regarding their health, dental, vision, life, short-term and long-term disability (and those are just the core offerings), a mere two weeks before they would make major financial decisions set in stone. When online benefit enrollment platforms (like bSwift, BenefitFocus, and PlanSource) began arriving in the early 2000’s, our industry quickly terminated other projects to invest in the ability to develop and transfer file feeds after brokers threatened they couldn’t win business without it. While these advancements improved administrative strains for HR, they have made carriers less nimble, less profitable, and - as for those participation rates and employee-perceived value - the needle hasn’t moved much.
This might have been a good time for the industry to pause and question whether technology was actually the answer. Instead, they doubled down on the tech. Layered on top of benefit administration platforms today are AI-powered decision-support tools such as Nayya intended to take the confusion out of benefits and help employees make better selections for their personal needs. These tools, however, don’t increase education as much as they bypass it altogether. While they have shown improvement in participation levels, employees do not better understand what their benefits do or what their value is any better today than in 2000. [On that note, I warn carriers - particularly those often concerned about commoditization in our market - to think long and hard about whether decision-support tools positively impact their brand awareness or loyalty amongst insureds.]
“The path to profitability should be lightweight retention and expansion,” says Ben Wessner, long-time executive customer experience strategist. “Enter the closed loop customer journey: What are the requirements of the customer journey - ie the progression down the continuum of value, how does the business organize around it, and then what can be automated. ” By nature, it’s tough to say who the customer is at times in group benefits - but it shouldn’t be. It’s the employee. The integration of ben admins into enrollment have benefitted the employer far more than it has any employee.
As of 2021, the benefits administration technology market was worth somewhere between $870M-$1.6B depending on the source. That’s a whole lotta dough for an insurtech segment that has not delivered on its purpose, as carriers see it, to increase participation, premiums, and client stickiness. Given how much of that market value is provided by carriers, I think it’s high time we rethink enrollment altogether.
The innovations for benefits enrollment have failed because they do not solve for the real issue: our industry’s strategies and approaches toward enrollment. We took poor practices that had only ever produced subpar results and we shined it with technology. Bobbi Shrivistav, Co-Founder and COO of Benekiva, a leading digital transformation company focused on insurance claims and servicing, tells RiskTaker, “So much of our work ends up being process re-engineering versus tech enablement. We have to challenge our clients to define what outcomes they want to derive and ensure it’s not clouded by what they simply want to automate.”
Any investment in automation to “improve” ineffective strategies will result in more ineffective strategies and technical debt. This concept rings true in every single industry, for every single company. Before letting the industry bully your organization into another tech strategy, stakeholders can ask the following questions to determine whether technology really is the answer…or if it’s just putting lipstick on a pig:
What questions would you include to help companies identify whether the solution is tech or process?
Ben Wessner and Bobbi Shrivastav are not only changemakers in their respective fields, they are members of the invitation-only, rebel executive support group Punks and Pinstripes.
