BenefitsEmployee Engagement

Reforming Healthcare

Innovate offerings are helping employers navigate the new landscape.

By Amy L. Gurchensky
In the last year, the United States benefits administration market has experienced quite a bit of activity. Service providers have developed enhanced offerings and technology with an emphasis on consumerism. Healthcare reform is the main driving force for changes in the health and wellness market, namely the explosion of health insurance exchange offerings. While retiree exchanges have been around for some time now, private exchanges for active employees are relatively new and have really gained considerable traction in the last 12 months.
Aon Hewitt was first to market its private exchange in the fall of 2012 and had a total of three clients sign on, including its parent company Aon. In early 2013, other benefits administration vendors followed suit and launched their own exchanges including:

  • Mercer Marketplace: targeting employers with between 100 and 100,000 employees
  • Xerox’s RightOpt: targeting employers with more than 3,000 medically-enrolled employees
  • Towers Watson’s ExtendAccess and ExtendActive: slated for 2015

Being the first one to market does have its advantages. While Mercer, Xerox, and Towers Watson were able to sign a handful of clients for 2014 enrollment, Aon Hewitt added another 15 clients to its roster (including Walgreen Co.) and now have nearly 330,000 participants.
Future developments around exchanges include expanding offerings to pre-retirees, building in perks to active employee exchanges such as discounted gym memberships, and launching an exchange specifically geared toward the mid-market.
Vendors also played a role as an educational resource around healthcare reform by offering webcasts and specific websites with guidelines on the Patient Protection and Affordable Care Act (PPACA). For example, ADP launched Health Care Reform Made Simple for plan sponsors and Mercer released Health Care Decoder for participants.
Educational tools are a noted trend in retirement services too. More than 50 percent of benefits administration service providers have implemented online education programs and tools, aimed at both defined contribution (DC) plan participants and plan sponsors. Some examples include:

  • Fidelity’s Income Simulator: helps participants to estimate their potential monthly retirement income
  • Mercer’s Uncover the Numbers: provides DC administration participants with game-like interactivity based on a tile design with “SmartSort” functionality to group content by career stage or investing topic
  • ADP’s Plan Health Review: for plan sponsors to assess retirement readiness of participants and provide actionable solutions 

Automatic escalation features offer new levels of financial wellness through automatic enrollment and escalation. Fidelity Investments offers its clients two types of automatic escalation features including auto advance, which is a one-time increase for targeted participants to a minimum savings rate, and an annual increase program, which delivers a yearly automatic increase in deferral rate for any portion of employees.
Technology Upgrades

Benefits administration service providers have refined technology platforms to keep up with regulatory changes, including the ability to track hours for part-time, variable hour, and seasonal employees to maintain with compliance around PPACA’s 30-hour rule. Plus, 30 percent of vendors had plans to redesign the user interface to move toward a more consumer- oriented version. Participants using Towers Watson’s technology can now model different health plans for comparison and the plan selected will carry over into their enrollment process. Secova’s BenefitsWalk includes tabbed navigation to move among election pages for various benefits.
On the horizon is either launching or enhancing existing mobile technologies and apps. Similar to health insurance exchanges, the availability of smartphone apps for benefits administration has exploded in the last year with nearly 60 percent of vendors providing mobile applications, an increase of 20 percent from 2012. By service line, the scope of benefits apps include:

  • 45 percent pensions or retirement apps
  • 25 percent reimbursement apps
  • 20 percent health and wellness apps
  • 10 percent absence management apps

Amy L. Gurchensky is an HRO research analyst for NelsonHall.

Tags: Benefits, Engaged Workforce, HRO Today Global

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