Cutting edge changes defined the benefit technology space in 2015, as the industry continues to undergo not only a digital transformation, but also an information explosion, says technology consultant Scott Klososky.

Brokerages in the digital age are going to see revenues per employee escalate, but will need less and less people to do the job, Klososky said earlier this year at an industry event. “Automation is changing the world,” he said.

Also see: "Investing in technology will cement an adviser’s legacy."

This year, in particular, the need for new technology solutions arose from regulatory changes, such as the reporting requirements of the Affordable Care Act., which requires information found in HR, benefits, accounting and payroll systems that traditionally do not easily exchange data, according toJon Pilkington, chief product officer at  Datawatch Corporation, a Chelmsford, Mass.-based vendor of data preparation technology.

Employers increasingly are looking for more integrated technology solutions, including HRIS systems and one-stop shop tech platforms that combine multiple HR and benefit admin tools.

Tech company births

In November, employee benefit firm Digital Insurance invested in the tech company GoCo. Integrating an all-in-one HR and benefit solution with its brokerage base that spans the nation will not only change the way the firm does business, according to its CEO, but will also “change what small and mid-size employers can expect from their employee benefit advisers.”

Also see: "Digital Insurance 'playing offense' with new software solution investment."

“In the last three years, there is a dirty dozen. A dozen new companies, new benefit tech companies, some of which pre-date Zenefits, some of which came as an answer. All of which are focused on the smaller end of the market,” says Rhonda Marcucci, principal at Gruppo Marcucci, a Chicago-based consulting firm specializing in the HR and benefits administration technology and outsourcing industry.

Among tech companies that popped up or expanded in 2015, there were:

  • Flock: 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,” Raj Singh, the company’s CEO, says.
  • ·Namely: Few small businesses have the capability to scale their benefits and HR services to match their ambitious growth plans, the tech company Namely believes. By providing such growth-enabling services to this market, HR technology company Namely hopes to make a name for itself. The company’s benefits offering launched in March and includes medical, dental, life and some ancillary benefits.
  • NextAgency: Launching first quarter 2016, NextAgency, co-founded by two former National Association of Health Underwriter presidents, Alan Katz and Trei Wild, will be entering the online enrollment/benefits administration space.

Tech spending up

Broker investment in technology also increased in 2015 and is expected to continue to grow in 2016. According to EBA’s annual technology survey earlier this year, almost half of survey respondents planned to increase their tech spending in 2015, with 9% planning to increase their spending by more than 20%.  

Nearly one-third (29.3%) planned to spend $10,000 to $49,999 on technology in 2015, but 15.7% planned to spend $1 million or more. Looking toward 2016, more than half (56.1%) planned to increase their tech spending.

Key to brokers when making a technology purchase was the requirement the technology improves the client experience and adds more value to the relationship. For 81% of the respondents, they reported gaining or losing business based on their ability to offer client-facing technology solutions.


 The telehealth market is expected to reach $4.5 billion by 2018, a massive gain from $440.6 million in 2013, according to business information provider HIS. In 2015, the industry warmed up to the trend.

Teledoc, the nation’s first and largest telehealth provider, reported slightly less than 300,000 telehealth visits in 2014 and is on track to double that by year-end 2015. Insurer UnitedHealth, in May, announced an expansion of telehealth coverage options by partnering with three providers, Doctor on Demand, Optum’s NowClinic and American Well, to cover visits with a doctor via video and technology, just as it would an in-person visit.

Cyber security

While high-profile data breaches continued to make front page news in 2015 from insurers to the federal government, employers say they fear cyber security poses the greatest risk to their company.

When asked to consider the single biggest risk facing organizations, the majority of business leaders agreed the No. 1 risk they were concerned about is cyber security/network security, according to a survey by The Graham Company.

Advisers themselves should also be looking to protect client data from cyber breaches. Hackers and data thieves will likely begin targeting companies down market from the big corporations, meaning brokers and advisers should be prepared, Tinker Kelly, president and CEO of VEBA told advisers at EBA’s Workplace Benefits Mania in Las Vegas in July.

Also see: "How to protect client data from a cyber-breach."

“Agents have an ever-increasing responsibility to protect client data,” he said. “Being cautious with sensitive data is important. Agents have a responsibility to keep client data tight. Also, if a breach occurs it can be detrimental to your reputation.”


Multiple robo-advisers have entered the 401(k) space in recent years, including Financial Guard, Betterment for Business (launching in January), Bloom and Captain401. They all use computer-generated models, or algorithms, to get workers into better investments. They say they can do it less expensively than managed account services offered by traditional recordkeepers. “I think we're at a tipping point where the industry's going to transform a little bit, says Kevin Pohmer, CEO of Financial Guard.

Also see: "Everything you need to know about robo-advisers."

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