The health benefits market is evolving and it’s time to evolve with it. Brokers have an opportunity to bring clients the value they are looking for. Technology and consumerism are playing important roles in shaping the future of benefits, which is why Individual Coverage HRAs (ICHRAs) are opening doors for both employers and brokers.
As industries move through technological evolutions, they adopt new tools to create efficiencies and better engage users. Now, it’s the health benefits industry’s turn.
Technology and Consumerism Revolutions
Evolving consumer demands and technology are quickly changing the way the benefits industry operates. Employers are battling annual rate increases and overwhelming administration requirements for employee health benefits. And their employees are demanding personalization beyond their current traditional benefits offerings. That leaves brokers looking for smarter solutions—and there is one—to deliver the best options and experience to clients.
Technology is Opening New Doors for Insurance
Technology is opening access to new data sources, including the use of artificial intelligence and machine learning, to help further the understanding of consumer behavior and preferences.
Technology disrupters aren’t letting themselves be hindered by legacy systems and ideas. They’re driven by the desire to create a better customer experience—leveraging new, expansive data. They’re creating innovative solutions to tackle the most frustrating problems that drive cost increases and detract from providing what consumers really want and need.
The sheer volume of technology-focused activity is reinvigorating the insurance industry, opening the door for technology to be a lifeline to fixing a fractured system.
“Technology disrupters aren’t letting themselves be hindered by legacy systems and ideas. They’re driven by the desire to create a better customer experience—leveraging new, expansive data. They’re creating innovative solutions to tackle the most frustrating problems that drive cost increases and detract from providing what consumers really want and need.”
Health Care Meets Consumerism
As a concept, consumerism involves understanding and studying the buying habits of the end user. Until now, this concept has traditionally not been utilized as much by the insurance industry.
Technology is rapidly changing how consumers interact with their benefits. Increasingly, end users expect digital shopping experiences. They’re demanding better information and transparency. And smartphones and other connected technology allow people to keep their fingers on the pulse of everything—collecting, comparing, and discussing the information and data they receive with trusted family and friends.
The twist? In contrast to many consumer products, the consumers don’t like purchasing insurance. It’s detached, overwhelming, and often tied to negative life events.
Why Can’t Buying Health Insurance Be More Like Buying a Car?
Technology solutions are on the rise that make it easier for individuals to be fully involved in their healthcare decisions.
Consumers want their health care to feel like the rest of the services and products they choose to engage with.
In other industries, it’s easy to access comparison features, advantages, costs, and product reviews to guide decisions. But the health industry presents a huge array of confusing choices without up-front information.
Younger Generations Are Driving Change
Millennials and Generation Z now make up the majority of the workforce, and they’re leading the charge in changing the workplace health landscape. Their approach to health is different than any generation before. For employers looking to attract and keep young talent, this matters more with each passing year.
These “digital natives” are looking for health care with the speed, convenience, and personalization they have come to expect from all other areas of their life, like eating, communicating, and shopping.
Brokers and business leaders must understand how their employees want to access their health care and benefits information. And speaking to multiple generations requires a multi-faceted approach.
It all starts with brokers bringing the right tools, technology, and benefits solutions to the table.
Employers Expect More From Their Brokers
In general, people expect more from companies than they used to. They look for real-time responses, transparency, relevant terms, personalization, and technological support. It’s no surprise that people want health benefits to meet these higher standards.
Consumers want transparency and complex health insurance explained to them in clear, relevant terms that make sense in their day-to-day lives. Demand for personalization is high and will be a disruptive consumer trend that starts to impact the insurance industry in the next two to five years.
Increasingly, consumers are voting with their wallets and shifting to companies that let them access the information the way they want (online, over the phone, chat, and from a mobile app).
This trend will reach brokers as well, who must be able to provide what companies and a multi-generational workforce are looking for.
It’s not just consumerism and technology that are driving a shift—the healthcare system itself isn’t working.
The Financial Pressure of a Broken Health Care System
The healthcare system is fractured and expensive. Companies and their employees need a better solution now. Over time, family premiums have risen faster than wages and inflation. It’s not sustainable as costs continue to skyrocket.
This is a shared burden—both employer and worker contributions continue to rise.
Something has to change.
“The sheer volume of technology-focused activity is reinvigorating the insurance industry, opening the door for technology to be a lifeline to fixing a fractured system.“
Active Participation in Health Care
As you might imagine, consumers help drive innovation, pricing, and the overall marketplace. For far too long, employees have been passive participants in choosing employer-sponsored health care benefits.
The more we can empower employees to become active participants, give them more choices in coverage, and provide transparency in costs, the better we can meet their needs with less cost. In fact, 76% of the employers surveyed in the 2021 Kaiser Family Foundation Employer Benefits Survey see that active participation should have an impact on healthful choices.
“Advances in digital technologies + access to data + shifts in consumer behavior = new opportunities“
ICHRA Is in a Position of Unparalleled Growth
So, let’s get to that solution.
It’s important to ask ourselves, “What are employers looking for in their benefit offerings?” Time and time again, it’s shown that they want a satisfied and happy workforce, especially at a time when employee retention is a top issue for companies. Employers want programs with high utilization and predictable budget controls. And ease of administration can’t be sacrificed; otherwise, any solution is a non-starter for most companies.
Imagine a world where offering health insurance was easy (and affordable). ICHRAs make that dream a reality.
ICHRAs deliver in three important ways:
- Greater Cost Control – Employers can confidently set their health plan budgets year after year while providing employees coverage that best fits their needs.
- Freedom of Choice – The doors are wide open for employees to shop the insurance marketplace to find the coverage that best fits their needs.
- Easy Administration – Technology lifts the administrative burden by eliminating recurring HR tasks and simplifying the employee management process. (But it has to be the right technology.)
“Imagine a world where offering health insurance was easy (and affordable).”
According to the U.S. Department of the Treasury, it’s estimated ICHRAs will benefit:
- 800,000 employers
- 800,000 previously uninsured individuals
- 11 million employees and family members
Willis Towers Watson estimates growth to 43 million ICHRA participants by 2028.
Standard ICHRA Falls Short Without Technology
The standard ICHRA falls short in a few ways:
- Employees have to shoulder the monthly cost and wait for reimbursement.
- Reimbursement processes add a substantial administrative burden on HR.
- Employees have to navigate the individual marketplace on their own, with HR’s support, or with the help of a broker (which is difficult to scale).
Cost control and providing choice are great, but your clients shouldn’t settle for the standard. That’s where the right technology comes in.
Nexben’s Payment Solution
The Nexben Payment Solution takes the standard ICHRA and solves some of the most important problems.
The patent-pending payment solution facilitates the transferring of insurance premiums on behalf of the client to all insurers in one-click.
Employers gain:
- An intuitive process for designing benefits packages and setting and contribution amounts.
- One consolidated insurer statement, even with multiple carriers, and easy one-click payment.
- Automated and simplified plan administration.
Employees gain:
- Dedicated enrollment advocates to navigate coverage choices based on their unique health needs.
- No upfront costs, as there’s no waiting for reimbursement.
- Easy payroll-deducted premiums.
- Ongoing support year-round.
Brokers gain:
- Ease of administration for all clients offering an ICHRA plan.
- A solution to build their book of business.
- The ability to offer solutions to clients’ largest pain points.
What does this actually mean for employers?
Case Studies: Nexben and ICHRA in Action
A manufacturer with nearly 300 eligible employees offered an ICHRA with the Nexben payment solution. In contrast to the group plan offered last year, the company realized cost savings of nearly 30%.
Their employees also realized an annual cost savings of $737 each, on average, a 45% reduction from the previous year.
A national freight transportation company with 98 benefits-eligible employees across 26 states was able to leverage the Nexben ICHRA solution to save 20% year over year.
They were also able to increase their overall participation from 53 employees to 59.
It’s Time to Evolve
The opportunity is here. It’s time to evolve with the market. Embracing change and new ways of approaching clients can be hard. But this change is vital to the success of this industry and for employers.
Those that evolve to meet the changing demands of the end consumer will be seen as valued advisors (one with their finger on the pulse of the shifts in the industry), bringing forth solutions that address real pain points.
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