While private benefit exchanges offer more choice to employees, at the same time they are creating challenges for employers due to billing reconciliation and payments to multiple providers, a speaker at Employee Benefit Adviser’s Workplace Benefits Summit said Friday.
The additional choice also leads to a “disjointed” transaction history, said Michael McCue, sales development leader at Paylogix, at the conference in Orlando.
Right now, benefit administration is a one-way process. Employees access an exchange and complete their enrollment and elections, the data goes through payroll and an insurance carrier, but then premium is left to be determined between the employer and carriers.
McCue said to solve that issue, all stakeholders need to be involved in the process. This way, an employer can have an electronic data interface, but also access the data they are authorized to see. The employee and broker also need access to that data, so if a question arises, the broker can provide better service.
Looking ahead, private exchanges “will be the best delivery methodology for a new phase of providing not just medical benefits but an entire package of benefits,” said Paul Ziats, director of business development at Paylogix.
However, for this to be effective, exchanges must overcome the aforementioned issues in benefit administration. McCue suggested focusing on the “plumbing” or backend of a private exchange to ensure it:
- accurately and timely feeds information to insurance carriers and benefit providers;
- has a flexible electronic data interface that provides seamless communication with multiple carriers; and
- has Web-based access for all users.
With these steps in place, McCue sees the employee portal of the future as including payroll deductions on a line-by-line basis and claim status updates. Driving employees back to the portal can increase the sale of evergreen and voluntary products, McCue said.
“Rather then having one way flow, now what we have is a continuum,” he concluded.
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