BenefitsContributorsEmployee Engagement

A Healthy Opportunity

Some medical coverage reform is years away. Get ready now.
By Jeff Miller
As healthcare reform takes hold, employers face tremendous change. Never mind uncertainty about whether the law will remain fully in force by 2014—we can only assume enactment and lay the groundwork for a transformed benefits landscape. So from the administrative perspective, it all means a new era in benefits outsourcing.
As currently defined, reform will bring increased employee enrollment, an expansion of Medicaid eligibility for certain employees, new benefit-level floors and ceilings, the rise of insurance exchanges, and a new individual insurance market—along with increased regulation of insured and self-insured health plans. Meanwhile, a heightened employee awareness of reform will only lead to new eligibility questions and concerns.
And as if employers don’t have enough on their plates for the next few years, they must also look as far ahead as 2018, when they could be faced with significant excise taxes on the high-value health benefit plans enjoyed by some employees. Still, key actions are called for now, beginning with a basic understanding of the reform, so that employers can identify new costs and saving potentials, design new cost-sharing benefit plans, and develop new ways to deliver and manage their health benefits—all with an eye to creating or sustaining the total-reward packages they need to attract and retain top workers.
Unquestionably, this strategic challenge is largely administrative, and an opportunity for employers to explore the extent of an outsourced solution to health benefits administration. A lot is at stake, and it begins with an assessment.
Employers must ask tough questions: Do we have the legislative and administrative expertise to deliver on new regulations? Do we have the budget and implementation resources? Are our systems and tools configured to deliver? Can we handle the expected increase in employee inquiries and administrative reporting?
This is only a beginning. There’s also the emergence of state insurance exchanges, which will bring their own complications, including employee communication challenges to overcome misinformation, plus data and system requirements to interact with the exchanges—especially for multistate employers. This avalanche of change does bring with it a lot of new opportunities for employers, from a strong incentive to manage health-related costs to a redefined benefits commitment, increased employee satisfaction, improved health and productivity, and, ultimately, the reduction of internal administration.
Clearly, outsourcing providers are on the front lines when it comes to partnering with organizations that seek real administrative solutions. Regardless of their outsourcing relationship, all companies are somewhere along an administrative solution spectrum.
This continuum begins with insourcing, performing all administration and call center activities on a home-grown system or a benefits module attached to the current enterprise resource planning ERP system; extends to cosourcing arrangements (such as online services, open enrollment services, or back end systems administration) in which companies partner with vendors to share technologies and some operations; and ends at a fully outsourced benefits delivery model—outsourced contact center, robust Web-based employee tools, communication, and engagement strategies.
For many companies, the challenge and complexity of healthcare reform is one of those paradigm-shifting realities that will generate momentum toward that full benefits outsourcing solution. But the challenge for outsourcing providers is to meet employers’ needs at the right time and in the right way. After all, healthcare reform introduces a multiyear action horizon that forces companies to keenly assess where they are on the administrative solution spectrum, and where they need to be by 2014 and beyond.
As a result, the outsourcing providers they’ll value the most will not only offer a full service array but be willing to deliver it at the desired pace. Core administration services such as enrollment and employee self-service are the bedrock of benefits outsourcing—a good beginning that can include a great deal, such as beneficiary management, eligibility, and payroll reporting, all the way to Web-based decision support tools and call centers.
But numerous value-added services go beyond that core: dependent eligibility auditing, voluntary benefits, wellness programs, healthcare claims advocacy, flexible spending account administration, customizable education materials, and so on. For this end-to-end administrative strategy, the goal must be nothing less than service-delivery excellence.
The ultimate result is more, though, than effective and efficient administration. At best, the full benefits outsourcing model should yield enhanced levels of employee engagement, all at a time when uncertainty—about everything from job security to retirement income—has never been more acute. Thus, as we help employees become more capable and sophisticated managers of their health benefits and economic futures, we also help drive productivity. That vital growth engine must not stall as we embark on the untested road of healthcare reform.
Jeff Miller is president and group executive of Mercer’s outsourcing business, based in Norwood, Mass.


Tags: Benefits, Consultants & Advisors, Engaged Workforce, HRO Today Global, Professional Contribution

Recent Articles