6 factors to consider when looking for a voluntary-benefits outsourcing firm

A day doesn’t go by without headlines announcing significant shifts in the health care landscape. January heralded the announcement that Amazon, JPMorgan Chase and Berkshire Hathaway will develop their own health care system for their employees. More recently, the Aetna/CVS merger and Humana/Wal-Mart announcements suggest monumental changes are on the horizon for health care delivery.

With this volatility, employers must manage rising health plan costs and continue to provide value to their employees. The burden of rising costs is being shouldered by employers and employees while coverage is simultaneously being eroded.

Cost-saving strategies are now shifting to voluntary benefits. Mainstream carriers are focusing their energy on these products to offer solutions to employers struggling to provide employees with creative ways to cope with the increasing, out-of-pocket medical expenses that are inherent in high deductible health plans. With this in mind, many employers have started offering worksite voluntary benefits such as accident, critical illness and hospital indemnity insurance, but often without a comprehensive voluntary benefits strategy. This can lead to inconsistencies in benefits design, branding and administration, which derail the overall objectives of the employer’s Total Rewards program.

Creating an exceptional voluntary offering with a customized set of products, services and solutions is no easy task. Thus, partnering with a voluntary benefit outsourcing (VBO) firm enables employers to combine a voluntary benefit strategy with a holistic approach that aligns with the company’s benefit objectives.

Related: What are benefits managers’ priorities this year?

So, what are the factors to consider when selecting a VBO firm? What benefits will an employer realize when partnering with a VBO firm?

Single-destination portal

An integrated portal is essential to creating an exceptional employee experience. Providing a single destination website for employees to access all available voluntary benefits options and corporate discount programs dramatically enhances the awareness, effectiveness and perceived value of a total benefits program. Each component of the platform should focus on the “ease of use,” and “ease of navigation,” to maximize the employee experience and plan participation.

A fully integrated platform boosts the total value of voluntary benefits; financial services; workplace giving; wellness; transit benefits; healthcare exchange options; and corporate discount program while eliminating the administrative burden of managing multiple websites, program vendors and data exchange interfaces.

The platform should meet the unique needs of an employer by presenting different portal views to accommodate various populations. This ensures employees in each benefit eligibility class will have access to only those programs for which they are eligible (i.e., full-time, part-time, union, executives, retirees).

Single-slot payroll technology

Adding a new benefit is costly and complex. The employer must establish new interfaces among benefits administration platforms, carriers, and payroll administrators. A VBO firm should leverage eligibility and single-slot payroll technology to automate the complex exchange of enrollment and premium files among multiple carriers and providers. This consolidates all eligibility and payroll deductions from an unlimited number of data exchanges funneling into a single premium amount and generates a single deductions file. It then remits payment to each carrier.

Who owns the technology? While many firms boast single-slot payroll technology capabilities, some leverage a third party. When a VBO firm owns the technology, there is more control over managing critical service level components and processes.

Client & customer service

Ensuring the highest quality of service levels for the client and the employee is critical to the long-term success of the program. The depth and breadth of the team’s expertise will empower employers to effectively manage an integrated voluntary benefits program.

The employer should have a single point-of-contact who can access a team of subject matter experts (such as consulting, technology, security, billing, web design and communications) that can both implement the programs and provide consistent, excellent service.

Customer service for employees is essential. Many firms provide employee support through a dedicated toll-free number with a customized IVR phone menu and while the 1-800 number is a staple in the customer service industry, it’s important to understand how the employee will be supported. Whether the inquiry is about policy administration; policy quote comparison; enrollment; changing an existing policy; resolving a billing/payroll question; or, claims administration, ask the who, what, when, where, and how of employee advocacy. Request the VBO firm’s call center statistics such as, average wait times, average speed to answer a call, and abandonment rates. Multiple channels of assistance should be provided to employees including “live chat” and mobile app devices.

Security

The most important component in selecting an outsourcing firm is ensuring employees receive the highest level of security, privacy, and confidentiality with respect to customer service, IT systems, data exchange, internal procedures & methodologies, and data transactions with you and carrier partners. Don’t be shy about getting into the weeds about how encryption of data is handled and what security enhancements the VBO firm employs.

Communications

A successful voluntary benefits program MUST communicate with employees on a regular basis. The VBO firm should be able to customize campaigns and provide relevant, high quality, effective communications to drive employee engagement!

The VBO firm should also leverage communication technology to help employers direct focused benefit information to an individual and provide valuable resources that are most beneficial to the individual.

Reporting & data analytics

Understanding what drives the effect on employees; a specific demographic group; who is enrolled in what program or offering; and, what the real value/savings of this program, is valuable information. It helps employers drive future program performance as you continuously evaluate, design, redesign, and implement next generation benefit programs.

A VBO firm should not only provide tools to continuously monitor these programs for quality, enrollment, communications effectiveness, and perceived value by employees, but also hold quarterly and annual strategy meetings to review the overall performance of the voluntary benefits program.

The VBO partner must have a well-developed implementation process and a detailed project plan that will provide a blueprint for next steps to include: portal set-up, communications, enrollment, and eligibility/payroll file feed transfers. A solid, knowledgeable consulting partner who can help navigate the various benefits offerings and carriers and help orchestrate a successful program will prove to be a valuable asset. VBO firms offer the unique ability to provide benefits that are inexpensive to the employee and are generally no cost to the employer. The partnership contributes to the success of the employer’s bottom line, so choose your VBO partner carefully.

Peter Marcia assumed an active role in the management of YouDecide in mid-2006 as CEO after two years as an investment partner. Prior to his involvement with YouDecide he was Vice President and National Director of Employee Benefits for Hilb, Rogal and Hobbs.