Five Questions to Ask Before Offering Web-Based Benefits Administration

By Brent Whitaker, Bernard Health's BerniePortal team

Right now, group health insurance markets are in flux. Employers are uncertain what the rules are, and are looking for signs that they have the right broker on their side.

As a result, health insurance brokers have the opportunity to grow their business over the next several years by adding value for clients.

Offering Web-based benefits administration is one way brokers can add value for group clients. Not only does online benefits administration save employers time and money, it can also help employers stay compliant with health care reform rules.

If you're a broker considering Web-based benefits administration for your groups, determine if it's the right fit by asking these questions.

1. Is my group ready to go online? 

The answer to this question depends on the group. If they're changing medical carriers this year, then the answer is almost invariably “yes.” If they are renewing everything “as is” and have a largely blue-collar workforce, then the answer is likely “no.” If they are somewhere in between, then the answer is probably “it depends.”

As a broker, your role is to make sure your group is confident about their decision to go online with you navigating their online benefits administration journey.

You can do both by selecting a benefits administration tool you like and set up a free trial for your clients. Ask the vendor to build out the system so your group can get a feel for how it works when you present it to them. This helps them know it's available with you as their broker, and you don't have to worry about Paychex or ADP coming in behind you with their solution.

2. What is the total cost to go online?

Many Web-based benefits administration companies charge fees on top of their base price. Make sure you know every fee before you present the solution to your group. Be sure to ask if there are set-up fees, carrier integration fees, renewal fees and fees for every new carrier.

3. Is my group's data secure?

Your group is going to have questions about data security. Their focus will be on making sure their data, as well as their employee's data, is secure throughout the entire benefits administration process.

When evaluating vendors' data security features, ask:

• How the vendor stores data
• If the vendor has a cyber liability policy in place. If so, what are the limits?
• How the vendor ensures security,

4. What revenue sharing is available to the broker?

Groups expect you to provide your brokerage services at no cost to them. They expect the benefits vendors to compensate you for the services you are providing them. As such, the benefits administration company should compensate you just like a dental insurance company compensates you.

Be sure to ask the vendors you evaluate to describe their commission structure. Yes, you will also ultimately save time when your groups move online, but it will take some time to help them do so. And although offering online administration will help you keep your groups, so would offering ancillary benefits beyond medical insurance.

You should be able to earn commissions on the work you do related to benefits technology just like you do for any insurance product. Your clients expect it.

5. This stuff is all new to me. Will it really work? 

The short answer is yes. The longer answer introduces the element of time: it is not if it will work for your groups, but when. The answer is different for each group.

What you don't want is for another broker to differentiate himself or herself from you by presenting this solution to your clients before you do.

The time is right to learn about this, and present it as a solution to your groups. Don't just present it by asking, “Do you want to do online enrollment?”

Instead, present a real solution that's already built out for your group by the vendor. This will let your group get a true feel for the system to make an informed decision.

It will also make you look like a champ. Even if your group doesn't move forward this year, they'll be impressed and glad to know it is an option with you as their broker.