How employee benefits will change for good in 2022
Traditional benefits models are struggling to keep up with the evolving needs of the workforce.
Today, our professional and personal lives have become more interconnected than ever before. In addition to dramatic changes to how millions of people live and work, the past two years have tested nearly every shared system we rely on–we’ve all felt the impact on the supply chain and health care systems, for example–as well as exposed cracks that underscore the need for long-overdue upgrades.
Employer benefits are no exception. Even as we see greater emphasis on benefits to attract and support workers in an increasingly competitive labor market, traditional benefits models struggle to keep up with the evolving needs of the workforce. People are frustrated with insurance plans that seem to cost more every year while covering less. The rise of distributed work highlights the inadequacies of regional provider networks. And with more variation in how people work–-whether remotely, freelance, or via gig work-–relying entirely on one company for benefits is restrictive. The future lies instead in frictionless benefits: flexible, relevant benefits that are easy to understand and easy to use.
2022: The year of frictionless benefits
As a surge of new companies innovates with consumer-centric offerings, traditional insurance companies are accelerating digital transformation efforts to keep pace. Employers, in turn, are getting creative in putting together benefits packages that can support a diverse workforce with broad, varying needs.
Here are the six trends I’m most excited about for 2022:
The rise of embedded benefits
Benefits will show up in the tools people use every day, like mobile apps and finance tools. It’s no longer enough for benefits information to show up once a year during open enrollment–consumers need easy ways to engage with their benefits all year round. Expect to see benefits built into vertical SaaS, consumer finance tools, and other places where it’s useful to see them in context.
Traditional benefits get a modern upgrade
Underwriting and benefits administration are notoriously slow processes that are reliant on outdated methodologies and monolithic systems. As the industry embraces APIs and other modern technology, we’ll see faster, easier quoting; new products designed, tested, and deployed more rapidly; and quicker, more accurate enrollment.
Non-traditional benefits take off
As the job market grows more competitive, benefits are in the spotlight as a critical hiring and retention tool, and one that can help manage the rising costs of healthcare. Employers that offer more targeted, useful benefits appeal to a more diverse and distributed workforce. Mental health care and counseling, parental and childcare support, tuition assistance, fertility care, elder care support, and pet insurance are all examples of relatively new types of benefits that are growing rapidly in popularity and may soon become table stakes for any employer looking to retain workers.
More flexibility with portable benefits
The makeup of the workforce is changing. LIMRA predicts that in five years, fewer than 50% of workers will be traditional office-based employees. Freelancers and contract workers will continue to pour into the workforce, making flexible, individual benefits offerings essential. Technology is the key to unlocking new possibilities for flexibility, including products that can move with the consumer across jobs or geographies.
Data transparency takes center stage
The modernization of data storage and exchange methods presents an opportunity for consumers to gain access to their own information. Right now, many benefits processes are a black box with no visibility to the end consumer, despite how critical and sensitive the involved data is. Where is personal data going? How is it being used, and by whom? Is it even accurate? In a world of frictionless benefits, consumers will have access to their data across benefits providers, employer software, and personal apps.
A more strategic role for brokers
With more coverage and benefit options than ever, brokers have an important role to play in helping employers craft modern benefits programs that put the consumer front and center. Plus, new and better enrollment and eligibility technologies mean that brokers will spend less time administering changes and more time guiding their clients through these important decisions.
The future is bright
The creative energy trained on the benefits space right now is incredible, and it means that the future of benefits is wonderfully bright. Behind the scenes, data security, compliance, and observability will be critical building blocks for the next generation of innovative products, services, and experiences. As we enter the new year, I’m inspired by the innovators that are putting the consumer experience first to transform benefits for good.
Shannon Goggin is co-founder and CEO of Noyo, the leading API platform powering the age of connected insurance with a new digital solution for fast, accurate data exchange.