How Heffernan became a tech-focused brokerage

The transforming benefits landscape continues to force benefit agencies to reinvent the way they do business or become a part of benefits history. One firm, Heffernan Insurance, foresaw over a decade ago the impact technology would have on the benefits industry. The Walnut Creek, Calif.–based firm embraced technology in several aspects of their business model and has reaped the rewards ever since.

Whether it’s being one of the first firms on the block to pass out iPads for client presentations instead of 100-page documents, developing its own technology enrollment solution, creating a private exchange, or its recent partnering with the Zenefits-alternative startup Flock, Heffernan Insurance Brokers strives to be a “modern technology broker,” according to Steve Williams, president of financial services and employee benefits at Heffernan.

Williams has been one of the firm’s leading advocates for offering clients technology solutions, integrating technology into the firm’s day to day business operations and, together with his team, has positioned the brokerage on the cutting edge of technology solutions.

“We are always looking at ways to utilize technology to help the lives of our clients,” he says. “Heffernan is the new modern technology broker.”

The agency was formed in 1988 and is now one of the nation’s largest independent insurance brokerage firms. The firm is 100% employee-owned and provides property/casualty insurance, employee benefits and financial services products to businesses and individuals in all 50 states.

In 1997, Williams merged his family's agency, originally called the Peter E. Williams Insurance Agency, founded in 1886, with the Heffernan Group.

At that time, the firms made a combined $8 million in revenue. This year, he says the group will pierce $100 million in revenue. The firm continues to expand its footprint not only in northern California, Williams says, but also across the nation. The firm now has 10 retail offices from coast to coast with about 450 employees.

Williams says his initial background in the insurance industry was as a property and casualty broker and then branch manager of Heffernan’s San Francisco office.  About 10 years ago he took charge of Heffernan’s employee benefits division, with a mission to grow it. At the time it accounted for less than 5% of the firm’s top line revenue.

“I am a creator and I like to create new opportunities for the agency and for our clients. So with that in mind, I took the reins of the benefits division, hired some great talent, and started building out what we needed to do in order to compete and offer our clients that full broker service they so desperately were asking for.”

“One of the first things I recognized was technology,” he says. “As a predominantly property and casualty based agency at the time, looking at the systems and programs available to our clients, it was obviously very much driven and focused on property and casualty.”

He says the first thing he and the firm set out to do was evaluate the best agency management system for the employee benefits division.

Implementing a new system, he says, “allowed us to customize the servicing and processes and be more efficient and respond to our clients’ needs in a manner that they would expect.”

Prior to the management system, he says, everything was documented on excel spreadsheets and “not optimized as well as it could be.”

“That was our first toe in the water from a technology standpoint in trying to understand the needs of the client,” he says.

Fresh pair of eyes

“What was really exciting for me was that because my experience was more on the property and casualty side, many of the advisers in the employee benefits division had more experience than I did in employee benefits. And, while one would think that would be a hurdle for me to step in and run it, it was not. Because I came at it with a fresh pair of eyes, I wasn’t pre-determined in processes that the old school were doing. I was able to really look at our industry as it was evolving.”

What really has happened over the past 10 years, he came to realize, is “what became relevant to clients was not the advice and consultative services we would give our clients on the proper benefit plans, the co-insurance, deductibles, participation, networks. All that was a given. If you’re going to be an adviser or consultant to the employer community, that’s what the insurance brokers have been offering to their clients for the past 50 years. I recognized that our clients assume we have that expertise and we will assist them with that.”

As compared to property and casualty, he says, he found that employee benefits is not product driven, it’s service driven.

Which is why, he says, Heffernan focuses on listening to its clients. By doing so, the firm has come to realize that employers want a lot more from their insurance brokers than just consultative advice on facilitating the placement of coverage.

Technology advisers

He adds, “It became clear that we need to be more than just insurance advisers to our clients. We also need to be a technical adviser.”

Joyce Buckner, Heffernan’s employee benefits operations manager, says the integration of technology at the firm has streamlined the process with clients, service-wise.

“When we didn’t have the technology we had to do a lot of administrative work, especially in regard to the census data,” she says. “Technology allows us to pull that data easily. It has definitely allowed for an ease of administration.”

She adds, “Technology is one of the biggest factors in the benefits industry — the talk of the town. So, we have to do our due diligence in researching and providing options to our clients. The brokers have really embraced it.”

“Heffernan is the new modern technology broker,” Williams repeats. “I use that term all the time when I am talking to our staff or talking to our clients and telling them both, ‘You need to be more efficient in how you’re operating in order to produce the results you want financially for your organization.”

That’s true for Heffernan as an organization and its client organizations, he says.

“We’ve had to sit down with our clients and explain why they need these additional services to manage their workforce and manage their company,” he says.

“One of the most frustrating things has been that we have always had a difficult time bringing our clients along that path,” Williams says. “It would be much easier if our clients were reaching out to us and telling us what they want. Unfortunately, that’s few and far between. What we have had to do as advisers and consultants is advise our clients what they need. We can share the view that we have about how they can manage their workforce more efficiently or how they can become paperless. How they can hire onboard and off board and manage all the HR aspects and the ben admin aspects. They don’t have the expertise or the know-how to even understand what’s available.”

For example, employers were not knocking on Heffernan’s door demanding a call center so they would have someplace to call for answers or their employees could have a place to turn for answers to questions the employer couldn’t field. Instead, Heffernan foresaw the need for such a technology in many client organizations and developed a call center, Heffernan Employer Hotline.

The call center is manned by HR specialists and fields questions from their clients’ HR staff about how to handle specific, sometimes sensitive, situations. Heffernan has also expanded the call center to field questions from employees about their benefits.

“We now have a pretty sophisticated call center for our clients and our clients’ employees that will relieve the HR staff from having to answer a lot of mundane questions, especially around open enrollment time,” he says.

Heffernan also aggregates the questions the employees ask the call center and quarterly reports to the employer client certain data about frequently asked questions.

Employers can then identify trends and adjust their corporate communications to proactively address frequently asked questions or concerns the employees are bringing to the call center.

Heffernan has also utilized technology to address employer concerns about Affordable Care Act compliance and requirements.

Early on, the firm established a website,, which is updated regularly to provide clients with detailed information about the changing legislation around health care and the ACA.

Tech platforms

The benefits industry is constantly evolving, Williams says, including an increased popularity of PEOs, payroll solutions, and Zenefits-style tech platforms. In order to compete, he says, Heffernan has had to adapt and be able to offer similar services.

In an effort to compete with the PEOs, Heffernan created HeffConnect total solutions.

“For a lot of our startup companies and smaller companies or those in multiple states, it was too cumbersome for them to manage all the taxing, payroll and regulations amongst a diverse workforce. It was easier for them to go to the PEO model. Not cheaper, but easier,” Williams says.

Still, while clients wanted the user-friendly all-in-one solution PEOs provide, they were reluctant to enter into the co-employer relationship PEOs require.

“Heffernan recognized that and came up with HeffConnect, a product that provides an all-in-one platform and allows clients to retain their independence,” Williams says.

HeffConnect is an online health management solution which allows for paperless benefit management and communications. Employees can enroll in all their benefits using the online portal. HeffConnect also communicates to carriers and vendors through electronic data interface feeds. Eligibility, payroll deductions and various pieces of information are sent to the appropriate carrier or vendor on a weekly, bi-weekly or monthly basis through the EDI.

“HeffConnect total solutions integrates payroll, HR, workers compensation and health insurance on one platform that Heffernan manages for our clients, and still gives clients the economy of owning and managing its own workforce,” he says.

Heffernan also recognized that when Zenefits entered the market in 2013, it was a game changer and one that identified that small- and mid-sized businesses needed technology solutions, too, to help them manage changing compliance and regulations that “were burying them in paperwork.”

While the Zenefits platform is one that small to mid-sized employers want and need, he says, the Zenefits model, which he feels eliminates the broker, does not work.

“Many of their customers are coming to us when they see they like the idea, but they also need the hand holding of a broker to advise employees, to help with claims, to help with personal issues,” Williams says.

While researching whether to choose a Zenefits alternative or build out its own, Heffernan came across the startup Flock.

“We didn’t find many good products for small to mid-sized businesses to have one platform for HR, ben admin and compliance. So when we met Raj Singh, CEO of Flock, it was clear to us that he was on to something,” Williams says.

Flock is a broker-friendly Zenefits alternative. It’s a technology platform for small to mid-sized businesses that helps them hire and onboard employees, as well as manage HR compliance. Flock also provides businesses and employees tools to manage benefits online “without disrupting the personalized and highly specialized services in place from existing insurance brokers,” Singh says.

Heffernan has signed on to be a broker-partner with Flock.

“Flock has a unique value proposition for preferred brokers,” Williams says. “As a preferred broker for Flock we have entered into a contract with Flock. They want to be an easy to use all in one tech for SMBs under 500 employees. As a partner, their licensing agreement for preferred brokers allows Heffernan to enroll all benefits customers for free,” Williams says. “Flock is broker friendly.”

“In partnering with Flock, we now have an all in one platform that is free for HR services,” he says. “If our clients want a ben admin platform, we can then turn on that module with them, as well, and offer that service.”

Flock’s platform includes tools to ease new hire onboarding; complete benefits management tools from open enrollment to plan design; tools to help with state and federal requirements, including analytics and reporting; tools to build employee engagement; time-off tracking; and e-documents.

The Flock platform also includes a broker portal, Williams says, which includes among other things, employee census information and other client data that can help brokers identify better benefit choices for their clients.

Heffernan client Briotix opted to use Flock after its workforce doubled in one year. Ben Riggs, Briotix’s human resources generalist, says the growing company was looking for ways to leverage technology to take care of some of the administrative work that accompanies benefits management.

“Last year, we did open enrollment old school on paper forms. It took me the whole month of August to do that,” he says. “I asked [Heffernan] for possible solutions for benefit administration tools to ease that administrative responsibility.”

He says the customizability of the Flock solution and its ease of use, were two reasons the workforce performance solutions company chose to use Flock.

“With Flock we are able to do all of our enrollment process seamlessly within the solution. It is also our HRIS system and helps update information for the new premiums. It made a lot of sense for us because it took a lot of the admin stuff and created a simple approval process for me as opposed to me hand entering information in multiple locations to get somebody entered into the system,” Riggs says.

“A lot of benefits administration tools that you tie into your HRIS system are very out of the box. If you fit in it great, if you don’t you’ll have a struggle to get it online,” Riggs says. “Flock is very customizable. They were able to customize our portal that we use with our employees for enrollment and the information we wanted to share with our employees.”

Flock is also in the process of getting EDI feeds to carriers to improve its service offerings, and some carriers are already on board to receive them.

Williams says that news in particular is exciting for small to mid-sized businesses.

“Historically, in the medical business, you could not get EDI feeds for small groups. It was only available for large groups,” he says, adding that it’s one more example of how he and Heffernan refuse to do business as usual.

“When somebody comes to me and says ‘Well, that’s the way it’s always been,’ the little hair I have on my head stands up. I don’t ever want to hear that. I want us to be outside of the box thinkers,” Williams says.

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