This article was originally published in Benefits Pro's Broker Innovation Lab.
Keith Scally represents a rare breed in the employee benefits industry. He has an extensive background in the intricacies of benefits and HR technology and a cutting-edge approach to innovation and technology development. He joined Maxwell Health last month as the VP of product after over eight years at Choicelinx, a Cigna subsidiary, where he led business strategy, operations, product development as their President and CIO. Before that, he was the vice president of IT at Bridgeline Digital, and led business development and technology at Newpoint Technologies.
I sat down with Keith to get his perspective on what makes innovation in employee benefits such a unique proposition, the trends shaping the industry, how they’re affecting brokers, and the massive potential opportunity technology can open up to their businesses.
What makes employee benefits a unique space to innovate within?
I don’t believe that there’s a lot of innovation happening in the benefits themselves; high-deductible health plans have been around forever, and we’re still figuring out how to optimize them. The innovation right now is happening in the experiences surrounding the benefits. How carriers brand their offerings, how brokers sell them, how HR teams manage them, and how employees buy and engage with them.
Building benefits technology is difficult to do well. There are a host of different challenges to consider, everything from regulations at the national and state level, concerns with data security, as well as an enormous amount of benefit configurations, types, and eligibility rules to consider, so technology companies really need to earn their seat at the table before they have the right to make an impact. There’s a lot of talk in tech about disruption, but that approach just doesn’t work well in this industry, as there are lots of forces working against disruption. We’re dealing with real people’s lives and livelihoods, and the systems are too complex and interconnected to take a “ready, fire, aim” approach. Innovation has to happen within a context of iterative evolution: working within the regulations and systems that exist in order to help them evolve over time.
Brokers are innovating in the way that they position their skill sets and services to employers. In addition to the core benefits strategy they’ve always offered, they’re becoming technology and HR experts as well — true consultants. There’s also innovation around what’s offered to consumers in terms of benefits. Because we have tech in the hands of the brokers and the employers, it creates a vehicle to think beyond a traditional medical/dental/vision life package. We’re starting to see voluntary benefits more easily enter the distribution channel, even down-market to consumers.
Can you talk about the trends that you’re seeing and that you’re most excited about?
First of all, small employers no longer need to look to purchase and acquire the tools they need to be efficient themselves. If an employer is managing benefits and HR via paper today, they should be aware that the burden is starting to fall to their broker consultants to provide the tools and knowledge to run their businesses proactively.
There’s definitely a trend, especially down-market, to set up lots of simple tools to specifically help with aspects of open enrollment, but many of those tools don’t have the backbone to be used year-round, to handle qualifying life events and handle the administration rules that would be expected throughout the year. It’s important for employers to know that that technology needs to be vetted, and you need to define your requirements. Do you just want something for open enrollment, or do you need something year-round?
The most exciting trend for me lies in leveraging data analytics, and the availability of that data to help consumers. A ton of opportunity lies in the data that benefits administration platforms work with. A lot of times, that’s taken the form of recommendation engines and decision support. These tools are starting to leverage the full spectrum of consumer data available, combined with advanced machine learning algorithms that can really help people understand the costs and complexity of what they’re buying, and help consumers optimize their choices and dollar allocations. I think those trends are going to continue.
I’m also excited by the trend of benefits administration companies looking beyond the open enrollment period to engage employees year-round in their benefits through mobile technologies. There’s a huge opportunity for analytics to help people understand how their products work together, and how to leverage them optimally throughout the year. Employees should understand the financial impact of their benefits, find providers, and compare costs wherever and whenever is most convenient, and for most of America, that’s on their phone. Mobile engagement will only increase, and technology companies and insurance brokers will need to respond.
What should someone investing in a technology solution look for in terms of core functionality? What are the deal breakers?
The reality is, even down-market, building true benefits administration technology is complex, and you have to get it right. Payroll needs to be accurate, elections need to be accurate, and the data needs to be secure. Data security, especially when dealing with personal health information, is the most important piece to look for when vetting a potential technology partner. If the system doesn’t have the underpinnings to secure that data, that’s a deal breaker. Proper handling and compliance procedures are critical. It is not enough to just have correct data; it needs to be safe.
Second is the service model. Brokers should be looking for a business partner in their technology provider, someone with a proven reputation for being responsive and hands-on when it comes to servicing their clients. A perfect technology company does not exist, so when something goes wrong, brokers need to ensure that their clients aren’t going to turn to another broker.
Thirdly, any technology investment in this day and age should be dynamic and iterative. Agile, cloud-based technologies are built to evolve and improve over time. The platform you invest in today should be better six months or a year down the road. Brokers should look to work with companies that release products updates on a regular cadence, and look to their customers for feedback and functionality suggestions.
Perhaps most importantly, any system needs to make life easy for the small business HR team. Small employers don’t have a lot of resources to deploy and manage a technology; they need to spend their time leveraging the technology they have to do their job and take care of their employees. The tools need to be simple to use, and should focus on automating as much of their busy work as possible so that they can focus on what matters.
The final piece should address employee needs, not only to relieve HR teams of administrative burdens, but also to make sure that employees understand the benefits they’re being offered and how to use them throughout the year. Benefits plans are designed to make sure that employees are healthy and productive at work, but that value is only realized if employees know what they have.