Offering clients an inflexible private exchange with predetermined carriers and products may be akin to not offering employers a solution at all, says Sima Reid, president at Long Beach, Calif.-based twentytwenty Insurance Services. In a Q&A with EBA, Reid shares why her firm built its own private exchange solution and discusses future trends in the benefits technology space.
EBA: For an adviser, what are the main advantages of using technology with your clients?
Reid: I can’t imagine not using technology. When everyone is so focused on dollars today, if you are not taking advantage of technology, you really are leaving dollars on the table from so many different perspectives. .
No. 1, just the soft dollars. If an employer client is not using technology in the administration and management of their benefits program, I know it is taking their staff many unnecessary additional hours.
No. 2, if you’re not using technology in proving eligibility, you are spending time racing down carriers to get proper debits and credits. A lot of clients are so busy that they don’t audit their bills every month. I know they are spending more money than they should. Generally speaking, from just a financial perspective, but also from an efficiency and accuracy perspective, if you are not using technology, you really are not taking advantage of how you could do things smarter.
EBA: What are some of the latest trends in technology in the benefits space?
Reid: We are finally recognizing that there needs to be more interface with different technologies that employers are using. As an example, between payroll, between onboarding, between applicant tracking, and between benefits. We are starting to see more integration of different systems which are so critical because otherwise employers are working with the same data in multiple systems. We need to continue to see systems talking to each other.
EBA: Are you creating your own technology or licensing it?
Reid: We have a couple different things. The base system that we use for the enrollment process and onboarding, we do license. But, for our private exchange, we built our own technology that sits on top of that.
EBA: Why did you build your own private benefit exchange technology?
Reid: We couldn’t find anything that would meet the needs of our clients and employers that are between 100 and 3,000 employees. The reason was that we need to move benefits from where it is to today to where it should be. That is employees need more education, they need help making decisions and they need more choices.
Quote"We have to figure out what makes the most sense for the employee, not to just say, ‘look here it is, buy it this way.’ It might not make sense for them."
That was the reason that we built our own private benefit exchange. A lot of technology that exists out there just isn’t all that flexible. When you look at, as an example, companies that are in this middle-market space, a lot of those companies are not yet in a defined-contribution model. If you look at a lot of the technology that’s out there today, to take advantage of that with a private exchange, that employer has to move to defined contribution. If our clients are not ready to do that, I would not have a solution for them.
A lot of the private exchanges that exist, you have to be fully insured and you have to pick the carriers that they have in their pre-selected lineup. Well, if that doesn’t work for your client, then again, you are not bringing them a solution. The bottom line for us was, in order for us to bring solutions that were not a cookie-cutter, here it is take it or leave it, if we really are working toward meeting the needs of our clients, then we had to have that flexibility as far as the contribution structure and the plans and carriers that would be allowed in a private exchange. Those two things were huge for us and that’s what caused us to build our own.
We have to bring value. We have to be flexible. We have to figure out what makes the most sense for the employee, not to just say, ‘look here it is, buy it this way.’ It might not make sense for them.
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