Many believe that Benefits Administration (BenAdmin) sits at a unique intersection between Insurance and Human Capital Management. If you are working in the space, you have to straddle both worlds and address each of its concerns. However, there is a third area for which anyone working in the BenAdmin domain needs to account: the world of Healthcare. I would argue that it is potentially the most critical area that benefits administration solutions must account for to stand out.
Most BenAdmin technologies are designed to be just administrative platforms. These solutions focus on regulatory compliance concerns and are composed primarily of rules engines and workflows. These are usually supplemented by reports focused on identifying operational issues and a mechanism to transmit the data to other entities that will directly manage the plans. They are prosaic solutions not designed to be memorable and more focused on not making mistakes. Most employees cannot tell you the name of their BenAdmin platform. Many in the industry would say this is good, indicating that the solution has accomplished its purpose without causing disruption.
However, this represents a lost opportunity.
It is a well-known fact that the US healthcare system has many problems, as costs continue to rise, but outcomes continue to worsen. This is coupled with medical debt being the country's #1 cause of bankruptcy. This both indirectly and directly impacts employers. Indirectly, these medical issues can cause disruptions in employee performance and impact overall productivity. Directly, it is causing employer costs to increase as employees don't maximize the value they generate from the system, resulting in medical events that lead to increased costs. In 2024, employer medical costs are expected to rise between 5.4% and 8.5%.
However, Employers are uniquely positioned to have the largest impact on these numbers. 55% of Americans are enrolled in employment-based insurance. In addition, various studies have found that employees trust their employer with their health more than any other entity, including the insurance carrier.
This represents a unique opportunity for BenAdmin solutions to rise above being just mundane administrative platforms. They can engage employees and help them maximize the value they get from the healthcare system while also helping reduce employer costs. This is because these solutions have the uninterrupted attention of these employees at least once a year during Open Enrollment. While employees may be thinking about their health throughout the year, we know that during this time, they are forced to evaluate their circumstances as they decide on which plans to enroll. For many new entrants into the workplace, the first time in their adult lives that they are forced to think about their health is when faced with choosing a plan inside a BenAdmin solution. No other set of solutions in the entire healthcare ecosystem has that opportunity.
BenAdmin solutions capture these healthcare consumers at the beginning of their healthcare journey and have the opportunity to guide them all along the way by offering different solutions at every step. For example:
Educational tools to help them understand how each of their plans works with each other to provide total coverage.
Tools designed to help them search and select good physicians within their network for their medical condition
Decision engines that help them pick the right bundle of plans for their circumstance.
Cost transparency solutions that help them shop, compare, and select cost-effective vendors for medical procedures
Second-opinion solutions that can ensure that they are on the right path with any treatment plans
Coaching solutions that are designed to support them in developing and executing a plan to achieve a specific health goal
Bill reconciliation tools that help them ensure they are not getting billed incorrectly for each medical intervention
This is just scratching the surface.
BenAdmin solutions that will evolve beyond rote processing platforms and begin viewing themselves as healthcare products will deliver the most value to their clients. This new "HealthBenAdmin" tech category could be a pillar in tackling an ever-worsening healthcare landscape.
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