Businesses are expecting guidance from their insurance agency on the new mix of benefits that are a fit for today’s unique landscape. But we understand how complicated it is to keep up with their new needs and expectations. Has their employee benefits strategy changed due to the pandemic? What are their priorities in 2021? Why are employers considering switching brokers? How has their work process changed and how can brokers support it? In order to help you identify what’s most important to your current and prospective clients, we put together The Agency’s Guide to Better Serving Employers in 2021.
The recommendations in this guide are based on survey results from nearly 650 businesses that offer health insurance benefits to their employees. The survey was conducted by Ease in February 2021.
The guide will cover the following:
- Focusing on Retention
- Becoming the Single Point of Entry
- Making Your Small Groups Feel like Big Companies
- Creating the All-in-One Experience by Integrating Benefits with HR
- Helping Shape Benefits Education and Communications
- Boosting Your Marketing Efforts
In this week’s Broker Tool Belt, we’ll focus on the first two steps of The Agency’s Guide to Better Serving Employers in 2021. Next week, we will come back with part two to share the other four recommendations to fully reveal what businesses across the country are looking for in their broker.
1. Focusing on Retention
Of the businesses surveyed, 53.39% changed health insurance brokers in the past 12 months—meaning more than half made a switch in the last year. Businesses with fewer than 50 employees were the most affected segment (60.74%), followed by businesses with 51-100 employees (59.48%), and businesses with 100+ employees coming in last (49.01%). This indicates that the smallest businesses were the ones with the highest level of dissatisfaction with their health insurance broker.
While maximizing benefits cost is not always everything, in this case, it is the main reason businesses changed brokers in the past 12 months. This is followed by “offers better service,” and “offers more non-traditional benefits like telehealth and wellness plans.”
Of those businesses that didn’t change brokers in the past 12 months, 49.76% said that they would consider switching brokers if they offered “better service,” followed by “identifies new ways to drive down cost,” and “offers plan flexibility, for example carve-outs and level funding.”
In addition, businesses selected these as their top five priorities in 2021:
- Employee health and well-being | 52.75%
- Managing claims, developing strategies to cut costs while keeping employees satisfied | 39.81%
- Improving employee satisfaction and engagement | 36.89%
- Increasing employee productivity | 36.41%
- Selected cost containment of healthcare prices | 34.79%
In today’s competitive environment, retaining your clients is key to ensuring long-term profits—it costs seven to nine times more for an insurance agency to attract a new customer than to retain one. As the results above show, focusing on finding the ideal suite of preventive care and disease management benefits to maximize cost savings is the key to keeping current clients in your book of business, but how can you balance high-quality care and low costs? Technology may be the answer:
- Quickly add plans (forms, rates, contributions, etc.) to a ben admin system and reduce the friction involved in offering your groups as many choices as possible. Employees can enroll in all of their benefits in one place, while you don’t have to let the cost of managing more plans keep you from offering the best service.
- Utilize a rate quoting solution to present an accurate comparison of relevant quotes, build quick, informative, and personalized proposals for each of your clients, and ultimately present the best, most cost-efficient options.
- Help employees take control of their own health by offering a solution that allows them to view benefits information online, upload medical ID cards to the mobile app, see the price per pay period, and enroll in benefits at home while consulting dependents.
- Consider offering alternatives such as telemedicine and services such as BetterHelp or Headspace to target well-being at a reasonable price.
2. Becoming the Single Point of Entry
Employers have different options when getting their employees access to benefits and health insurance. On one hand, they can work with an insurance agency. On the other, they can
- provide coverage through a Professional Employer Organization (PEO), such as TriNet or JustWorks;
- use direct-to-employer (DTE) software, such as Zenefits or Namely; or
- use their payroll provider, such as Gusto, ADP, or Paylocity.
In today’s landscape, benefits are no longer enough. Small firms are handing over the reins to technology platforms and third-party administrators who can help them achieve greater efficiency and that offer better service with holistic HR and benefits solutions. Benefits, HR, and payroll are merging and broker control in the overall relationship is positioned to just one area.
Of the businesses surveyed, 74.80% work with a health insurance broker to offer employee benefits, while 25.20% do not. However, of those who work with a broker, 45.41% said that they also work with an HR software provider, 37.34% with a payroll system, and 31.66% with a PEO. Only 10.48% selected that they don’t work with any of those besides their broker. How long until the HR software or the payroll provider approaches your groups to offer benefits through their systems to increase efficiency?
Of those who said that they don’t work with a health insurance broker, 48.08% said that they work with a payroll system and 32.69% said they work with HR software to offer benefits to their employees. Payroll is the most popular option with businesses under 50 employees. And the popularity of HR software only grows as businesses get bigger.
Today, in order to edge out the competition, you must offer an integrated, all-in-one solution to your groups. In the past, businesses had to purchase solutions separately, but no more. Brokers need to become the point of entry to holistic benefits and HR solutions. By incorporating a technology solution that can assist employers from hire to retire, insurance agencies can fill the holes in their service and compete more effectively against PEOs, DTEs, and payroll solutions. To stay relevant, pivot from just handling transactions to providing more value associated with benefits and HR.
Adopting a technology solution and rolling it out to your entire book of business will significantly reduce the time employers spend on administrative tasks, which means they can focus on strategy and employee needs. This will position the broker relationship as a perfect partnership to help employers achieve their goals.
Final Thoughts About The Agency’s Guide to Better Serving Employers in 2021
The pandemic has uprooted workplace norms, increased healthcare costs, and decreased the mental and physical wellbeing of employees. Finding the right combination of benefit offerings that will drive positive health outcomes and minimize costs is a complicated task. What’s more, insurance brokers are expected to assist in a variety of different areas—from HR and compliance to risk management. Identifying what’s most important to your current and prospective clients has its challenges, but it is an essential part of providing high-quality service. Stay tuned for part two of The Agency’s Guide to Better Serving Employers in 2021 or download the full guide now by clicking here.