Benefits Outsourcing is Blooming

Linda Merritt, HRO Research Analyst, NelsonHall

Benefits administration is producing a bountiful crop of new and expanding services. Recent contract award announcements included ADP, Aon Hewitt, Ceridian, Equiniti, Fidelity, Mass Mutual and Merrill Lynch. A wide range of industry segments were represented: banking; food; education; non-profits; hi-tech; pharmaceuticals; and travel. This week, I have taken a look at some of the newer benefit outsourcing “crops” that are starting to grow nicely.

Managed Retirement Accounts

Fidelity’s relatively new managed retirement account offering – Fidelity Portfolio Advisory Service at Work – was designed to address the low rate of adequate preparation for retirement by many employees by combining Fidelity Investments plan sponsor customized portfolio active management services with auto enrollment and available advisory services to help bridge the gap in achieving retirement goals from a defined contribution plan. The service grew in both participants and assets by 50% in 2012. Already in 2013, another 135 new clients have been added, bringing the total to more than 1,800 plan sponsors.

• Fidelity awarded a contract for Portfolio Advisory Service at Work by ADM.

Health and Wellness

ADP’s Vitality wellness solution supports employers with between 50 and 1,000 employees manage rising healthcare costs and also reduce employee absenteeism. Vitality’s incentive-based program includes an interactive wellness portal, health risk assessments, biometric screenings and personalized wellness plans with recommended goals and activities. It integrates with social networking sites, mobile applications and fitness technologies; and when employees achieve planned goals, they earn points towards lowering their health plan contributions. The service is also integrated with ADP’s payroll services.

• ADP awarded a contract by Jackson Companies for ADP Vitality services.

Benefits Bouquet Bundles

HRO buyers want multiple related services from one vendor under one contract; and health and wellness lends itself to packaging separate services into bundles. Ceridian’s LifeWorks.com combines EAP, work-life, and wellness services into one program with its own portal and mobile access. Also available is Health Coaching – a program for high-risk employees that provides access to comprehensive health assessments and personalized guidance programs – and Client Value Dashboard – included for employers to monitor reports usage data and ROI information.

• Ball State University chooses Ceridian’s LifeWorks.com

Private Employer Exchanges

Mercer’s Marketplace allows employers to improve management of their benefits spending and administrative responsibilities for active employees. Employers determine how much to contribute toward the cost of their benefits program and can select from a range of insured and self-funded products and providers. The platform includes full benefits outsourcing and provides employees with call center and online decision support.

• Mercer recently announced names of 10 of its 20 national, regional and state carriers that have joined Mercer Marketplace for providing core medical and voluntary benefits.

A good garden has a variety of plants. Some base crops are evergreen like benefits enrollment and management services, while others are changed out to meet growing market demand. Benefits HRO: how does your garden grow? Very well thank you.

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by clicking here.

HRO Benefit Providers Go Exchange Wild

Linda Merritt, HRO Research Analyst, NelsonHall

Activity is picking up again in readiness for the fall benefits enrollment season with HR benefits service providers adding various types of new health insurance exchanges (HIEs).

New HIE Entrants

Towers Watson has just launched its HIE platform, OneExchange, for employees, pre-65, and Medicare retirees. It builds on Towers Watson’s 2012 acquisition of Extend Health and offers employers both private and public exchange-based health insurance options for full and part-time employees and retirees.

Features include:

• Support from initial financial analysis for employers, to plan comparison, purchase and enrollment, and post-enrollment support and advocacy for individuals
• ExtendRetiree: Medicare-eligible retiree assistance to identify and select supplement health plans from the myriad of available products
• BenefitView: real-time dashboard for employers.

Buck Consultants, a Xerox Company, launched a private HIE, RightOpt, for employers with more than 3,000 employees. The exchange will offer:

• Both a self-funded and fully-insured model
• Personalization based on a family’s health, adversity to risk, and preferences
• Member education, decision-support tools, and health engagement resources.

RightOpt will complement Buck’s retiree HIE, My Medicare Advocate, and will be available for Fall 2013 enrollment.

RightOpt intends to differentiate from other private HIEs by allowing employers to use a national network of providers so employees can access the more deeply-discounted networks of providers by metropolitan area; a model that was historically too administratively complex for many employers.

New HIE Alliances

Fidelity Investments announced a strategic alliance with Extend Health, a Towers Watson Company, to provide HIE services to retiring employees to identify and select Medicare and private health care options through Extend Health.

Fidelity is also expanding its own capabilities to incorporate retiree health care into retirement planning including retiree medical account support services to plan sponsors. Examples include:

• Recordkeeping and reimbursement services
• Retiree workshops and meetings
• Strategic communications expertise.

New HIE Exchanges

Those already in the market, including Aon Hewitt and Mercer, are not sitting still.  Mercer has added Mercer Marketplace, for employers with more than 100 employees, to expand its suite of private HIEs. The exchange utilizes a cloud-based technology platform with call center services and online decision support during enrollment.

Affordable Care Act Will Drive Growth and New Services

Once the final ACA regulations kick-in, there will be even more complexity for both employers and employees. Benefits providers like Towers Watson are already preparing more services to roll out including:

• Connecting workforce segments such as pre-65 retirees, part-time, contract, and seasonal workers to plans offered on public exchanges
• Providing financial analysis, modeling tools, and consulting to help employers decide whether to use private or public exchange solutions
• Enabling employers to transition active employees to exchanges offering individual health plans or group-based plans.

HIEs provide many positive benefits:

• Employers gain help in controlling cost and caring for employee health care needs
• Employees gain access to wider choices at group discounted rates as well as advanced decisions support tools
• Benefits providers can use existing outsourcing capabilities, as well as leverage consulting services and allied services such as Medicare, Medicaid, and the new public exchanges.

No wonder benefits provider have gone HIE wild!

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by clicking here.