Take a look around the benefits discussion table at many employers these days and you’ll see a wide variety of faces. There’s the head of HR, of course, but the CFO is there too, the CEO, and even the company’s employee safety representative. With clients increasingly tying their benefits strategy to the other departments at their businesses, it’s no surprise that top brokers in the U.S. are taking a closer look at their own company structures in the process. In EBA’s ongoing series of discussions with executives at many of the country’s top brokerages, the leaders of Lockton, Mercer, Pacific Resources and Higginbotham share their take on the next big things in benefits. And increasingly integrated roles are high atop that list.

“It’s amazing who’s sitting around the table these days when they’re making decisions around their health care plans,” says Bob Reiff, incoming president of Lockton Benefit Group in Kansas City, Mo., Lockton’s employee benefit consulting business. “… The whole cost of risk is going to become more and more an area of interest for clients and prospective clients.”

That focus on total risk has firms like Lockton taking another crack at stepping up integration between their benefits and property and casualty departments in particular. “There’s been conversations about marrying workers’ comp and benefits for many, many years. It’s never been successful,” adds Mike Brewer, outgoing president, who says getting people in both divisions to be comfortable talking about data integration is the first step in making that happen.  “It has been siloed. We’re doing the, ‘Mr. Gorbachev, tear down this wall’ type of thing,” Brewer adds.

Also see: “The top 50 large-group employee benefit brokerages in the U.S., part 1”

Meanwhile, one of four “strategic imperatives” at Mercer is to build an infrastructure that will allow for broader client relationships, says President and CEO Julio Portalatin. “Our clients have a need that is very wide,” he says. “We have a solutions offering base which is also very wide, and we have to make sure that that matches more readily than it has in the past.”

One way Mercer, based in New York City, is working toward that goal is to restructure its client-facing operations to put client managers at the front end who are able to provide an initial assessment of a client’s full needs. “That’s much different than we had in the past where we had individual specialized people interfacing with the client on the front end and thus only representing one part of the organization,” says Portalatin.

“This means that we put our clients and their people at the center of everything that we do. More and more these same clients are looking for us to solve issues that go across the business lines and the HR organizational silos,” he adds. “So as we have so much to offer across that spectrum of health, wealth and performance we see there’s intertwined a huge opportunity for us — one that we are constantly reinforcing.”

At Chicago-based Pacific Resources, increasingly integrating departments has meant an increased focus on voluntary benefits as well, particularly in the wake of the Affordable Care Act. There are more people in the health care system now and many of them are “buying down,” points out CEO Paul Barden. “That also means there’s more gaps in their coverage, so really understanding the supplemental benefits outside of the medical is becoming more of an important piece of the overall benefits strategy,” he says.

Also see: “The top 50 large-group employee benefit brokerages in the U.S., part 2”

While Pacific Resources has been in ancillary benefits in one way or another for close to 25 years, it’s really been in the last eight years that the firm has been strategically invested in voluntary, says Paul Rogers, president and COO — getting vendors to upgrade their group chassis, increase transparency and create better deals for the consumer.

 “In the past, even in employer groups in our size market, the voluntary benefits [were seen] as a separate decision process from the core benefits, from the traditional benefits. In many instances they were being administered on two separate platforms. So not even easy for an employee to make decisions holistically,” he says. “That is changing.”

And the result is falling directly into Pacific Resources’ sweet spot, Barden says: Helping clients design programs outside of the medical offering. “That’s becoming an even bigger piece of the overall strategy.”

Expanded services

In the ongoing effort to ensure they are continuing to meet evolving client needs, Mercer has established “innovation hubs” around the world, says Portalatin. The hubs use a funnel approach to understand the macroeconomics surrounding each area of study, then use client interaction and feedback to further define the agenda, he explains. Although the exact topics of study are being kept private for now, Mercer is using the hubs “to deliver some real good health, wealth and career solutions to clients,” Portalatin says. “These are all things we work on [so that Mercer is not] just responding but really staying on the leading edge of change.”

Also see: “The country’s top brokers: Poised for growth”

Clients will volunteer for beta testing of the concepts that come out of the innovation labs before any new ideas are launched to Mercer’s client base as a whole. “We have had innovation in this company for decades, but if you really want to have innovation that might be groundbreaking and truly disruptive you really have to have a process for it,” says Portalatin. That process includes taking Mercer employees off-line so that they can focus on their work in the hubs.

Clients are increasingly asking Fort Worth, Texas-based Higginbotham to become an extension of their own HR departments, says Michael Parks, COO and managing director of financial services. They’re looking for eligibility audits, onboarding and call center services, he says. “To find good talent is hard, so they’re trying to outsource as much as they possibly can,” he adds, “and HR support and onboarding eligibility is a big topic a lot of employers want us to do for them — for a fee.”

Higginbotham is looking for ways to cover employees more than ever before as well, including by offering individual insurance to those whose employers have dropped coverage. “We have formed an individual health hotline,” explains Rusty Reid, chairman and CEO. “We’re trying to enroll as many of those people into the federal exchange, if they qualify, or into individual health products as possible. We’re getting paid on that also.”

Maintaining an ongoing service model has “played a significant role” in Pacific Resources’ success, and the firm is dedicated to continuing that tradition, says Rogers. While other brokerages will offer services on a project-like basis and move on, “we took a very different approach,” he says. “Because we saw that our clients, at least in the larger-case market, were being asked to do a lot more with a lot less people. They were also being asked to be more strategic and less tactical — but the tactical work has become more onerous over the last decade or so. Our operating model is designed to wrap around and augment or compliment what our clients’ limited resources can’t do or don’t want to do and we’re coming in and backfilling that piece.”

Also see: “Top brokerages share why they’re invested in exchanges (or not)”

The next step, says Barden, is to bring in more resources and talent around benefits delivery. And that means investing in technology too, he says. “We really feel that we’ve been very impactful for clients in the past, but that’s an area where we want to be even stronger going forward, around the technology and the administration of all of those programs,” says Barden.

Technology and wellness

While compliance has been a chief concern in the last few years since the passage of the ACA, Higginbotham’s Parks sees that emphasis waning.  Going forward, “a lot of it has to do with other services that we can provide, whether it’s administrative or technology,” he says. “More and more of our companies are enrolling online and they need the tools to do that, or help with the tools they currently have to make it work.”

Also see: “Where your tech dollars are going”

In the next five to 10 years, Lockton’s Reiff sees data and technology capabilities playing an increasingly important role in a brokerage’s service offerings. “We know having big data is essential in supporting the employer strategy targeted at risk reduction and population management,” he says. “Technology is going to continue to play an important role as exchange and enrollment solutions evolve, as well as health care transparency tools that provide employees with the information they need about cost and quality to choose the best care at the best price.”

At Higginbotham, Parks knows all employers are extremely concerned about costs, and taking a look at the data behind wellness plans is “a big strategy” in tackling those costs. “We’re starting to work on trying to do analytics for our employers,” he says. “Doing a deep dive into claims and getting more involved in disease management with our clients. Not so much through the carrier, but doing it at the broker level —trying to identify the people who are not seeking the appropriate care, contacting them and incentivizing them to seek appropriate care. We feel like that might be the next big thing for us and exploring if that’s something we might want to do in-house.”

Reiff agrees. “The health and productivity of an employee population, that’s an area of opportunity,” he says.

Also see: “Top brokers address the industry’s pressing challenges”

As employees age and live longer lives, new challenges will continue to arise. “The issue of whether individuals have enough savings to support a healthy later-life living standard will become more front-and-center as the time comes on,” says Mercer’s Portalatin.

Although work remains, as we start to come to the end of a decade of tackling health care delivery and cost challenges, Portalatin sees human longevity as the next frontier. “I think you’ll see on a much more heightened basis the whole issue of the impact of longevity has on individuals and whether or not they have enough savings or have planned enough to really have a living standard that they are comfortable with for their later years.”

Editor’s note: This is the fourth and final article in a series where the leaders of many of the country’s top brokerages share their visions for the future of the industry. Other topics addressed include the firms’ philosophies on growth, the exchange distribution model and obstacles to overcome.

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