What is the future of technology for brokers and TPAs?

Former Microsoft CEO Steve Ballmer said “The number one benefit of information technology is that it empowers people to do what they want to do.” As we look for the next best thing in computing technology to help us achieve our goals — whatever they may be — the question that drives software development companies is, how can we fill that market need/?

For benefits administrators and brokers, what does the future of technology hold? What can software providers do to help them drastically improve their services, give them a competitive edge, and ensure they can stay in compliance?

Software development has undergone massive changes even within the last few years. From the tools used to create software, to the delivery methods, to the devices used to consume it, all areas of software have changed. Social media and application communication with clients allow tech companies to see real-time change in market trends and client needs.

Over the next five to 10 years, Software as a Service (SaaS) will continue to be the delivery model. However, development will continue to evolve. Over the past decade or two, many solutions providers have provided large systems that are tightly coupled to the business logic they provide. It became increasingly difficult to service clients who only desired to utilize a portion of the business solution’s full breadth. The next evolutions of SaaS will be focused on specialization (or personalization) and machine learning.

Market demands and microservices

Each year, as a new graduation class enters the workforce, our users become both more technically apt and more demanding. This pushes every third-party administrator (TPA) to respond to unique needs based upon dynamics within geography, laws, culture and other factors. Depending on their business needs, people tend to really like some things about a particular solution and other things about a different solution.

To meet their demands, solutions developers must move forward into specialization. More specifically, building applications that can be delivered as microservices, with an a la carte service model. How would this work?

Let’s suppose you have “Average TPA,” who offers health and dependent care flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs).

Average TPA likes how Tech A handles FSAs; however, they’re not impressed with the debit card platform, so they partner with a separate card provider, Tech B. Then Tech C does a great job with HRAs, so they’re able to link up with them. They also use an independent bank.

To put these all together, Average TPA combines these disparate platforms into a unique technology stack.

It’s the ability to create specialized services that allows TPAs to pick and choose what they need to deliver their best service or to get the best value. Keep in mind, not all TPAs will use this method. Some of the less tech-focused organizations will want to buy the holistic solution from a single source or have up to two or three service providers.

Another part of the next technology wave will be delivering better customer support by way of machine learning.

Machine learning

Often mistaken for artificial intelligence, machine learning analyzes the TPA’s day-to-day business processes, incoming and outgoing revenue, etc. Over time, the machine can evaluate the data it has and point out specific areas where a TPA can improve.

Let’s use Average TPA again. Based on the market and the services they offer, the machine is able to pick up that they are not offering health savings accounts (HSAs) in a consistently growing market. The machine could identify HSAs as a way for the TPA to grow its business. COBRA services could be another example of a service that could be added. The key is that the software can use history and future prediction to optimize itself and provide ever-improving feedback to users.

Service outsourcing and system security

Another key advance in technology, which could positively impact benefits brokers and TPAs, is the ability to outsource certain services.

Routine day-to-day operations, such as letter fulfillment, claims administration, and data importing could be outsourced to another service provider. It could allow brokers and TPAs to focus on growing (or maintaining) their core business, while delivering quality and controlling costs.

Of course, all three of these technology trends have one thing in common: the need for greater security. Not only is it needed to meet HIPAA compliance, but also to protect payment systems and data integrity.

Keeping Steve Ballmer’s quote in mind, the future of technology is developing solutions that allow benefits administrators and brokers to do what they want to do with more precision and flexibility. Specialization, machine learning, and service outsourcing will provide additional ways for technology providers to achieve that goal.

As Chief Technology Officer at DataPath, Adam Rockers oversees all aspects and strategic planning for the DataPath technology teams. He has two decades of experience in the benefits administration industry, developing software platforms that administer 105, 125, 132, and HSA plans as well as COBRA, card solutions, and Fulfillment. Adam’s responsibilities include setting the technology strategy for DataPath, improving processes, and delivering quality and superior functionality to the company’s clients.