What does 2022 have in store for small employer benefits?
In many ways, who knows? But in the the benefits space, one thing is certain: technology will continue disrupt in new ways and brokers and third party administrators will have the opportunity to be increasingly consultative partners to their employers in the quest to offer competitive and distinctive benefits to their employees.
1. Benefit packages will continue to grow as a way to attract the best and brightest employees
As the employment environment continues to be competitive well into 2022, we expect to see small employers continue to be pressured to offer more competitive benefits packages in an effort to lure and retain talented employees. Nearly four-and-a-half million Americans quit their jobs in November 2021, continuing an ongoing trend, according to U.S. Bureau of Labor Statistics. As a result, employees have more leverage than ever to demand better benefits packages from their employers
2. More a la carte plans.
In an effort to be competitive and given the lifestyle shifts that have happened since the pandemic, more employers are expected to adopt a la carte plans, which allow the employee to put a set amount of money toward benefits that are relevant for them. This trend has been around for a few years now, but given the added pressure on employers to attract and retain talent, we expect more employers to provide this option at midyear or end of the year enrollment. Others in the industry have predicted that a la carte plans are moving into the standard menu approach of healthcare benefits.
The benefit of a la carte plans is certainly cost savings and benefits that are relevant to each employer, but this adds a level of administrative complexity on the part of employers, TPAs and brokers to manage. With software like claims harvesting and employer invoicing, TPAs can manage complex benefits claims adjudication seamlessly, regardless of the number of plans in place. TPAs and brokers should look to technology solutions to improve their workflows as this trend continues.
3. Claims data will be increasingly more valuable to the benefits forecasting process.
We anticipate brokers using additional data to inform plan design. Historically, its been difficult to confidently recommend self-funded, level funded, or fully insured plans small companies because for small groups, the claims data that’s needed to confidently design a plan is not available.
The challenge to plan design lies in how to craft and fund these plans, which at the core requires the ability to accurately predict what types of claims may occur in a given plan year. Today, brokers usually make their best guess based on demographic trends for that employee population and generally what plans worked for employee groups of similar makeup. We of course know that the outliers, those with large medical claims in a plan year, are what tip the scales from a good plan for a group to a disastrous plan that might not properly protect the employer from catastrophic claims.
We deeply assessed how claims data can help employers confidently transition to a self-funded plan a few months ago, and you can read more here.
In short, we expect employers to want more data-backed recommendations from their providers, just like providers use data in other aspects of their professional and personal lives. Opportunistic, forward thinking brokerages will become even more creative in how they use data and technology to inform plan design and manage claims processing in partnership with TPAs.
Using technology like TPA Stream’s Claims Harvesting, brokerages could have the claims data for small groups they need to accurately create plans that meet the unique needs of an employee population and are still affordable for the employers, by focusing on benefits that will be most helpful and appealing. Brokers that crack this code and help their employers keep and win more talent, will benefit most in 2022.
4. We’ll see a shift to genetics-informed plan design.
Last year, 23andMe announces the closing of its acquisition of Lemonaid Health. Why would a genetics company acquire an insurance company?
For those in the industry, this acquisition is simply another example of trying to solve the data drought that plagues the small group space. By matching genetics to plan design, 23andMe can adequately match its customers with affordable and tailored options for their needs.
“This acquisition marks the first step in 23andMe’s journey to provide our customers with truly personalized healthcare, starting with genetics as the foundation,” said Anne Wojcicki, CEO and Co-Founder of 23andMe. “Lemonaid Health’s telemedicine platform and digital pharmacy will enable us to bring better healthcare to individuals in an affordable and accessible way, and ultimately empower people to take better control of their health.”
We expect to see genetics play an increasingly important role in plan design. The question remains, what will employees tolerate sharing?
5. Employers will demand a consultative approach with their brokers and TPAs.
Expect employers to ramp up their demands of their benefits providers including brokers, TPAs and insurance companies. Because employers are pinched to meet the demands of their growing workforces and pressures to find and retain talent, it is obvious that they’ll put added pressure on their vendors. We have heard from our clients that employers are reaching out more to solve individual claims issues or handle one on one problems, a role that has historically been held by the employer. TPAs and brokers can be ahead of this curve by having access to the claims data at their fingertips with a platform like Claims Harvesting.
6. Technology-driven and digital-first brokerages will gain marketshare.
Additionally, we expect more digital-first brokerages and software platforms that either assist brokers in meeting the demands of employers or will replace traditional brokers, simply because they provide more value at a lower cost. In the broker industry, we’re seeing a shift not unlike brick and mortar banks competing with web-first banks who can offer better rates with less overhead. Technology first leaders that are displacing traditional brokers include Gusto, Rippling, Zenefits, Bamboo HR, and Namely.
With platforms like BambooHR, Zenefits, for example, small employers can directly connect to plans that could work for your population. Providers like Rippling or Namely are trying to be a one stop shop for all things HR and benefits, and we expect further integration between HR, payroll and benefits functions, in an effort to simplify both the employer and employee experiences.
Crunchbase recently reported on an the onslaught of companies looking to disrupt employee benefits, as “business leaders are increasingly searching for innovative services and benefits designed to help workers prioritize their well-being, while at the same time lowering overhead and employee expenses.”
Brokers and TPAs that are committed to using 2022 to grow their businesses can use technology and insights to drive consistent growth. TPA Stream’s solutions of claims harvesting, employer invoicing, and insights for brokers help TPAs and brokers stay one step ahead of these trends.
Learn more: All about Claims Harvesting
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