As we move into 2021, one thing is for certain: Companies will continue to embrace remote-working policies. Because of this, Insurtech (use of technology to increase efficiency in the insurance industry) will continue to influence how the health insurance industry operates.
Historically, health insurance was a paper-dominated industry, where brokers and employers alike were mailed benefitplan designs. Enrollment forms had to be completed by hand and quoting could take days to complete. However, industry innovation has transformed the health insurance marketplace, making it more efficient while increasing an overall reliance on technology.
In fact, according to Pricewaterhouse Coopers, the health insurance industry is currently in the middle of the Fourth Industrial Revolution,1 resulting in an increasingly connected business world. We have experienced a more rapid technological evolution in the last decade than in the 50 years since the industry first began using mainframe computers.
One key element of Insurtech is the ability to leverage data from multiple sources, such as smartphones and computers, and streamlining routine processes. This innovation has allowed brokers to steadily increase their use of technology, creating efficiencies and lowering costs through automation.
Insurance professionals who use Insurtech can begin the quoting process more quickly than in the past, while also having access to resources to pull together a complete proposal. Brokers can also make easy adjustments based on a business’s specific budget and employees’ individual healthcare needs. Plus, employers are able to respond more quickly to changing regulations, employee status updates and more.
The result: increased efficiency and better overall customer service. With limits remaining on in-person meetings due to COVID-19 guidelines in place in cities across the country, some brokers have met with prospects and clients virtually via Skype or Zoom to review to discuss their quotes and coverage proposals.
Here are the top three Insurtech solutions that offer a number of benefits to brokers and their clients:
Speedy Access to Information
Consumers expect a certain level of speed when it comes to accessing data. Large- and small-business owners have the same expectation, especially when comparing benefit plan options while managing employee benefits and monthly contributions for each employee’s coverage.
Due to these expectations and demands, brokers more than ever must be able to obtain quotes at an increasingly rapid pace, recognizing that speed alone doesn’t determine success, but also quality and accuracy. The good news is that quoting technology continues to evolve, which benefits brokers, general agents and carriers. Some engines allow producers to present product combinations that cannot pass underwriting. However, this often results in significant errors that are not caught prior to employees making plan selections when rushing to complete a quote delivery. Errors are costly in time and re-education, and can result in the loss of a sale altogether.
Some quoting platforms highlight plan differences to make plan comparisons easier. Others include integrated provider search technology to ensure clients are only quoted plans that include employees’ preferred providers in the health plans they are considering. This gives brokers the ability to put together quickly the best package while proactively making prospects and customers aware of any deficits they could experience.
Online enrollment (OLE), human resource information systems (HRIS) and benefits-management tools are also attracting increased attention from groups of all sizes. Brokers and their business-owner clients can choose tools from carriers, administrators, general agents and third parties (like Ease, Rippling, Employee Navigator, GoCo, Insynctive and others). Employers appreciate the many benefits of OLE such as streamlined information distribution and integration of HRIS to help employee onboarding run more efficiently. Benefitsmanagement tools also help employers stay on top of changing rules and regulations, track variable hour employees, calculate full-time equivalent employees and determine Applicable Large Employer status.
It is in a broker’s best interest to keep an eye on new and emerging technologies that simplify health-plan shopping and make benefits management easier for business owners and managers. This reinforces your value as a business partner and insurance adviser to employers.
Another Layer of Checks and Balances
New legislation and regulations at the state and federal level can affect the underwriting process, along with how brokers quote and sell health insurance to their clients. These evolving adjustments can be tricky to monitor for even the most well-informed broker.
Automated online management tools can quickly alert you if a required authorization is missing, or deliver a prompt if a specific regulation might have been accidently overlooked. This is important because carriers, administrators and GAs are always looking at ways to improve their systems and implement changes to enhance the process for brokers and their customers. Professionals who embrace these constantly updated automation tools set themselves up for success by providing clients with the assurance their plans are fully compliant with federal and state rules.
Organization of Employee Statuses
Employers offering health insurance must extend coverage to former employees and dependents following the loss of that coverage for up to 18 months—this is required by law. However, federal COBRA and Cal-COBRA requirements can sometimes be challenging to follow. Plus, compliance errors can cost clients big money in statutory fines, excise tax penalties, civil lawsuits, regulatory audits and more. For example, the Department of Labor published its inflation-adjusted fines back in January. The fines for failure or refusal to file an annual report (Form 5500) are up to $2,233 per day. The maximum penalty for failing to provide a Summary of Benefits and Coverage has increased to $1,176 per failure. Lawsuits and audits can drive these costs even higher.
Failing to help clients avoid DOL and other penalties can be costly for brokers. Their reputation could be impacted, and they also may lose business because they are exposed to higher professional liability expenses. Insurtech innovations can help you work with your clients to maintain accurate employee counts, generate reminders to alert all parties of qualifying events such as employee terminations, and help you and your clients stay organized. Benefits professionals able to leverage this technology will become long-term and valuable partners to their clients.
Insurtech will continue to influence the evolution of the health insurance industry. It is ushering in an era of improved service, providing greater value to insurers and their customers. It is important that brokers stay apprised of new and innovative technologies to help them quickly and efficiently serve their clients. One thing is certain: Brokers will not be replaced by technology anytime soon. Business owners and their employees will continue to find value in high-touch customer service.