7 principles disrupting the status quo in employee benefits

Earlier this month, I attended the 9th Annual Employer Health Care and Benefits Congress in Los Angeles where the buzz was all about employee engagement – especially in the context of online benefit marketplaces. But I think if we’re going to talk about employee engagement, then we have to first address the need to change the traditional benefits mindset and think about how to challenge the status quo.

Employee benefit marketplaces enable individuals to select from a wide variety of product offerings ranging from medical, dental and vision plans, to life insurance, disability, and health savings accounts, to voluntary products such as accident, critical illness and hospital indemnity coverage, and more. As benefits marketplaces and other solutions have evolved, there’s been much progress in using these tools to boost employee engagement. But we still have a way to go.

Consider these seven key principles of benefits marketplaces that are disrupting the status quo, moving the needle on benefits innovation, and increasing employee engagement:

  1. Give them money and let them shop.
    By offering employees a defined, or fixed, contribution to purchase health insurance and other benefits as part of their total compensation, companies clarify the cash value of those benefits. In turn, employees tend to recognize the value of their employer’s contribution, which is typically not the case in traditional benefits models, where the cost of plans is essentially invisible to employees.
  1. Provide true price transparency.
    As with any other true exchange of goods and services, benefit marketplaces have to ensure participants receive unbiased, credible information in order for a free market to thrive. When consumers log on to a benefits marketplace, they must have access to the true pricing of plans and coverage information to effectively comparison shop.
  1. Provide meaningful choice.
    Just like any other store, an online benefit store, or marketplace, needs to have the right mix of products and prices, the right brands (i.e., insurance carriers), and options (i.e., plans) that appeal to a broad range of people. Employees expect the same type of experience they get on Amazon or Netflix in all aspects of their lives. Consumerism is taking hold in every other industry, so why not in employee benefits?
  1. Offer guidance in the form of decision support.
    Decision support provides guidance for important benefit choices and can take many forms. Willis Towers Watson’s benefit marketplaces, for example, use an online questionnaire to ask employees a series of questions related to the employee’s expectations of care usage (such as pregnancy or prescription drug use), risk tolerance, financial situation, health status, and more. Choice without guidance can be intimidating, but decision support makes it more engaging.
  1. Optimize the shopping experience.
    In addition to having the right products and the right guidance, a benefits marketplace should have a clean, intuitive design that makes it easy for people to shop for and buy insurance and other products. Just as in a retail environment, optimal experiences in an online benefits marketplace can be made smart, simple and relevant when the needs of the customer (or employee) are prioritized.
  1. Ensure a cultural fit within the organization.
    Overcoming barriers such as resistance to cultural change is another essential element in disrupting the status quo. The degree to which a company recognizes and understands the employee experience and culture within the organization can help ease the transition; for example, the type of employees attracted to their industry and business, employee education levels, as well as company mindset and leadership style. You have to know your employees to know how to talk to them about and engage them in their benefits.
  1. Refine, iterate and improve.
    Benefits aren’t a “set it and forget it” proposition. The more data that can be uncovered about a company, the more refinements can be made to its systems based on user interaction. You have to be ready for innovations that haven’t even been thought of yet, and monitor behavior patterns as consumerism in benefits continues to take hold in order to anticipate what’s coming next.

At a time when people are increasingly confused about health insurance and benefits, engaging employees in these important decisions is more critical than ever. It’s one disruption they’ll thank you for.

The “7 Principles for Disrupting the Status Quo in Benefits” are adapted from Alan Cohen’s book, Employee Benefits and the New Health Care Landscape: How Private Exchanges Are Bringing Choice and Consumerism to America’s Workforce released this month from Pearson Publishing. 


 

Alan Cohen is head of product for the Exchange Solutions segment of Willis Towers Watson and the co-founder of Liazon, one of the industry’s first online benefits marketplaces. Most recently, he is the author of Employee Benefits and the New Health Care Landscape: How Private Exchanges Are Bringing Choice and Consumerism to America’s Workforce, released in October, 2017 from Pearson Publishing.

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