The value of online enrollment is its ability to present an employee with a single set of screens that allow employees to investigate employee benefit offerings from multiple companies, including pricing, and make a series of selections of what benefits he/she wants for the coming year. Popular statistics suggest that employers can expect a 3:1 return on investment with online enrollment compared to paper-based enrollment.
Research first
These systems cover a wide range of features and pricing, so you need to do some homework before recommending one. Basic systems run less than $1 per employee, per month. Full-service systems cost between $4 and $5 PEPM. Low-cost systems offer employees a customized screen to collect benefit elections, but no connectivity to payroll or insurance carriers. More robust and expensive products provide seamless collection and flow of employee election and eligibility data to insurance carriers and the employer's payroll vendor.
Additionally, higher-priced systems have other selling points to justify the higher price, things like benefits admin tools, basic human resource processes, total compensation statements, consolidated premium billing, employee administration and management reporting on employee benefits and HR functions.
Another element for advisers to consider, naturally, is HIPAA. The privacy aspects of that law created a set of electronic data interchange rules.
This techno-blab simply means that insurance carriers, payroll vendors, online enrollment systems and any technology vendor that handles health and other employee benefit plan information must transmit data collected according to a federal, uniform standard.
Not all vendors comply with the HIPAA EDI standard. As a benefits adviser that means your customer's supply chain of vendors may not all talk to one another at an EDI level. The bottom line? You should hedge your sales talk with customers regarding online enrollment because it does not always work. Do your due diligence carefully on the online enrollment vendor and each of the vendors in the employer's benefits system to ensure that all data will accurately talk to one another.
Work together
Not too many years ago, I ran North American e-business for one of the big three global brokers. Part of that job required me to select and implement a national online enrollment program. I did extraordinary due diligence and handheld our producers selling the system to their clients. I discovered that a successful online enrollment process requires many vendors, the broker, the employer and the employees to work together. If one part breaks down, the whole system breaks down. When an online enrollment system does not work for whatever reason, it is a sales nightmare, regardless of blame.
Your sales nightmare can come from a number of areas. First, the vendor you choose requires you and the client to commit substantial time and effort to providing information to make the system work. So what's the problem with doing some hard work? For one, it frustrates customers, jeopardizing client relationships, and generally turns people off to the idea of online enrollment. The idea is for it to be easier. Second, the technical minutiae of the system does not work with all vendors. While not likely the fault of the adviser, they will receive the customer's wrath. Third, the system may simply not be ready on time.
Here is the good news. Today's sophisticated online enrollment providers have a service model that minimizes the role of the broker and the employer in building the system. It's like making sausage. Few people enjoy watching how it is made, but lots of people like the taste.
Quiz potential online enrollment vendors on their service model and ask probing questions about how much time and effort will be required of the producer and the employer. Then get - and check - references on how easy the implementation was for employers who have used the system you're considering.
Davidson, founder of Davidson Marketing Group and the FutureOffice Network, can be reached at craigd@davidsonmarketing.com.
