You’ve been there before: you bring an incredibly compelling benefits package to your client at renewal. You’ve maximized savings across all their lines and believe that you’re truly delivering the best possible package, including incredible service, innovation and significant cost savings. However, the client simply doesn’t want to change one of the lines. Since you understand your client deeply, you’re able to peel back more layers of the onion to realize that the client is concerned with switching costs and employee disruption. In short, they don’t want to make their own job (or yours) more difficult.
While this concern may have been grounded in reality in the past, the truth is that with how benefits companies are evolving today, these switching costs are being minimized in a few different ways, primarily driven by technology. Here are a few ways in which modern companies are making it easier for your clients to switch.
The days of paper enrollments and antiquated physical applications and policies are over. By now, digital enrollment options are table stakes, whether through a BenAdmin system or even direct online enrollment with a carrier. Moreover, there are numerous vendors across the space with integrations with carriers and companies like ADP and Paylocity make easy for you to set up clients with new vendors. For instance, Beam’s first mutual client with Paylocity took under a week to fully implement and set up the data feed, all because of modern technology. While it’s true that most of these connections still use older data transfer methods, APIs are the next step and will improve the efficiency and accuracy of this, again, improving your client’s experience in switching vendors.
Alongside the data transfer aspect of switching, newer technologies enable vendors to implement new clients into their systems virtually immediately, offering a much higher service level than what you’ve traditionally seen. For example, at Beam we target a same day implementation and group setup once we have a signed application and enrollment data. This is true for any size client, so there is little lag from when an employee made their election until they’re live in our system. How we implement clients is but one example of how technology is improving overall group implementation and creating a better experience for your clients’ employees as they switch.
Once a client has made the switch to a new vendor, the next challenge is member education. As an innovative consultant, you’re likely working with products you fully understand and you are the subject matter expert providing that member education. Moreover, a fantastic vendor will provide you with support and educational materials to help bring those employees along to understand their new benefits in order to maximize the value of the product. However, the job shouldn’t fall solely on your shoulders, and modern vendors have a responsibility to educate new members, and many players in the space do this incredibly well.
One of our partners, Gusto, focuses on payroll and benefits for SMBs, and they do an incredible job helping new employees get set up with payroll and electing coverage in a streamlined process. While they do compete with brokers, they are raising the bar across the board in how employees are onboarded and educated and brokers need to be aware of how the market is evolving. You’ve also likely heard of Oscar Health, a newer medical carrier, which has seen tremendous growth on the back of its consumer experience and member education. They’ve taken an approach which helps simplify benefits for their members, much of this through the mobile app as well as their easy-to-understand, onboarding packet. I expect this to be a key differentiator for them as they move into group benefits. Finally, companies like LifeWorks are taking a mobile-first approach to education. In particular, LifeWorks aims to drive all employees to use the app to fully understand their company perks, HR communications, as well as their personal physical and mental well-being. All three of these companies are taking a modern approach to education, primarily enabled by technology.
Once a group is set up, the perceived pain of switching doesn’t stop. Your client has to field questions from employees about missing insurance cards or coverage specifics, or they may have to deal with an invoice issues on a new plan. However, technology has streamlined much of this. It should be rare today to have to submit a paper form or fax for an administrative update, let alone have to call a carrier. Most vendors today offer an administrative tool (like Lighthouse) which enables quick updates and fixes, all of which are handled securely through web technology. Even things like requesting a new insurance card should only take a couple clicks. Of course, not every vendor has the same feature set here, so some switching costs are greater than others, but with the right partner, using the right technology, administering your client’s plans should take no time at all!
As a consultant, part of your role is to bring the best solution to your client, and also educate them on the true costs of any vendor switch. This includes making sure they understand the reality of switching costs for themselves and their employees, but also helping them realize that it’s not as hard as it used to be. If you’ve got incredible vendors you work with, it should be easy for you to sell those into your clients and educate them on how technology can make switching easy.