There has been tremendous focus in recent years on advancements in insurer technology in areas such as employee self-service, online reporting, e-claims and Web-based administration systems. For an industry that has historically been slow to embrace technology, there has now been a significant amount of catch-up in the last three to five years. But are all insurer technology platforms the same? And what future innovations should plan sponsors expect?
To answer these questions (and more), Mercer recently completed a comprehensive research project on the technology offerings of Canada’s group benefits insurers. Following are some general observations from this research:
- There has been significant convergence in the market in recent years; however, significant differences in insurer technology platforms still exist.
- The basics are largely covered. Most insurers offer some online format for administration, premium billing, downloading of forms, access to wellness tools and employee self-service.
- There is considerable variation in flexible benefits administration, online claims payment, vendor direct submission, online reporting and the handling of spending accounts. Some insurer platforms are also more flexible, offering integration with other websites (single sign-on) and website customization.
- Fraud prevention is covered with varying degrees of automation.
- Cost management, particularly in the drug area, has been a hot topic for plan sponsors, and several different approaches are being explored, such as preferred product pricing. Not all insurer claim systems can accommodate these different approaches.
- Many insurers will be adding new technologies in the near future (within the next three years), including mobile applications to interface with employees, continued expansion of e-claims, further enhancements to online reporting and greater integration of individual product, wealth accumulation and benefits websites for cross-marketing purposes. There is also still considerable work being done in the area of health portals.
Insurers are clearly still investing heavily in this area, with technology being viewed not only as “table stakes”—a robust technology platform is essential to competing in this space—but also as an opportunity to further differentiate their value proposition relative to their competitors. This is great news for plan sponsors and their employees, as further innovation in this area can only enhance the plan sponsor and plan member experience.
From a plan sponsor’s perspective, there are a number of key considerations when assessing the relative importance of technology in the overall benefits value proposition.
Technology can make the difference
Technology can make a difference in both the plan sponsor’s and plan member’s experience. Many plan sponsors are searching for low-cost (or no-cost) opportunities to enhance the value of their benefits programs. Technology advancements in the areas of e-claims and the use of mobile applications can resonate with all employees, but especially with younger and more tech-savvy employees. Plan sponsors can use technology to make benefits plans more accessible and, therefore, more valuable.
As already mentioned, there are still considerable differences in technology platforms. When selecting an insurer, it is important to dig deeper and understand the offerings of each insurer being considered. For example, it is not enough to say all insurers can accommodate employee self-service—you need to understand the relative differences. And, depending how important technology is to you, you may need to pay more for a more robust offering.
Look before you leap
We need to manage prescription drug expenses more aggressively, and we likely need to consider new approaches to cost management. However, there are some significant technological limitations in what some insurers can accommodate. It is important to explore these in advance of committing to a future cost management strategy.
Don’t be seduced by the glitz
In the end, it is all about paying claims correctly and on a timely basis. A robust technology offering means little if there is an underlying problem in paying claims. This should be a primary consideration in the selection of an insurer—it is core and fundamental. Technology serves only to augment the value proposition.
Expect more and challenge your insurer to continue to innovate in this area. The opportunities are limitless; however, insurers will only truly be motivated if they feel plan sponsors will value their advancements.
There have been impressive developments in the area of insurer technology in recent years, and we expect the pace of change to continue. However, not all insurer platforms are the same—nor will they ever be the same. This potentially becomes a significant point of differentiation in the vendor selection process. The possibilities to leverage technology—today and in the future—are truly remarkable. But before you can understand the potential, you need to understand what is available today and where the market is headed tomorrow.