Benefits Administration Outsourcing – Driving Business Value

Managing the annual benefits enrollment process is a core value of benefits administration outsourcing (BAO) and for years large companies have taken advantage of its cost and convenience. According to Towers Watson’s Annual Benefit Enrollment 2011 survey, 78% of large companies outsource enrollment, while almost half of midsized companies still insource. The scale will continue to tip towards outsourcing as three fourths of the responding midsized employers that currently insource indicated plans to outsource enrollment.

What is causing this tipping point? I think it is the addition of complexity to the healthcare equation for both the employer and the employee. Start with the ever rising healthcare costs driving increasing use of consumer driven health plans and healthcare savings accounts, add in the U.S. healthcare reform changes, and the options and implications start to multiply exponentially.

Even with the success of web-based enrollment, now at 89% according to Aon Hewitt’s 2011 Annual Enrollment Insights, calls to service centers are still in demand. Change and uncertainty increase the need to talk to someone as helping employees understand new plan features and any changes in pricing create communication challenges. Service providers see increasing use of decision support tools (DSTs) to help employees. For those using BAO, Towers Watson reports 69% DST usage compared to 44% that insource.

BAO also makes the process of accommodating changes for healthcare reform a bit easier. Aon Hewitt saw a jump in enrollment of 15% in the number of covered dependents as participants added children between 19-25 who are now eligible for coverage under one of the first major reform changes. Even a change that is relatively simple to implement has broader implications including increased employer interest in ongoing dependent eligibility rather than just as an audit, and some are moving to per child pricing over family pricing.

New best practices will emerge in response to benefit changes.  Service providers highlight the importance of incorporating a participant’s actual health claims data into decision support tools. Aon Hewitt has already seen that 48% of participants using advanced DSTs changed their elections. This is another opportunity to strengthen the value of BAO as Towers Watson indicates that 83% of the survey respondents have not yet integrated claim data.

Another emerging best practice is incorporating wellness communications into the enrollment tools and process stream. One reason for this is pure practicality as enrollment is a prime time to think about wellness. Another reason is that more employers are making completing assessments or participating in condition management plans a requirement to receive incentives or participate in premium benefit levels.

The BAO sale can be made on cost, convenience, and complexity. With a crowded market of quality providers, the differentiating theme that should run throughout the year is how to drive behavior change that creates business value.  Does your benefits service provider add business value?

Linda Merritt, Research Director, HRO, NelsonHall

“The American” is Not an American HRO Story

This weekend I saw the George Clooney movie, “The American.” I was not too sure what it was about, but then, it starred George Clooney. Title aside, I knew within the first few minutes it was not an American movie, or an American story. It takes more than speaking in English to tell an American story, and to provide culturally compatible HRO employee care call center support.

It is not that the movie was poorly made or the story poorly told, it just was not American. Nor was it an action movie. It was moody and slow, seemed to start in the middle and then little happened, little was said, and even less was explained. And the end, well, the less said the better. 

The experience reminded me of another movie, “The Devil’s Own,” with Brad Pitt and Harrison Ford (1997.) Brad Pitt is in the U.S. and brings his Irish “troubles” with him. He tells Ford, “Don’t look for a happy ending. It’s not an American story. It’s an Irish one.” Once again, same language, but with different cultural expectations.

For a movie that is quintessentially American, see the original “The Karate Kid,” (1984) starring Ralph Macchio and Pat Morita. For many years it has been a shared cultural referent; “wax on, wax off.” Movies, television and music are great sources of cultural touch points for any modern culture, and especially so for Americans. By the way, The Karate Kid also reflects the American cultural imprint for quality, which is a bit different from the Japanese or Australian imprints. (Seriously, there were studies.)

All of this is not to say that HRO employee care cannot be provided from outside of any one country to another. HRO care can, and is, being provided from a growing list of locations around the globe. Still, most voice-based employee support remains onshore, followed by nearshore delivery. Cultural understanding is one of many elements that impacts successful call center support. It is less important for basic transactional questions and answers. But as the service moves more into consultative areas that require interpretation, tone and manner become just about as important as important as technically correct answers.

I look forward to seeing how live chat will impact multi-shored employee care support. With chat, the use of pre-scripted stock phrases will not be judged on tone and manner, and chat is expected to be more focused on direct and brief exchanges.

HRO buyers and providers, help build the cultural bridge for farshore employee care center staff.  One simple example; share information on major current events, holidays and client-specific business news. And remember, during times of great stress and uncertainty voice calls will increase, even when other modes would be more efficient. No matter the country, company or culture, we all need and want helpful and understanding human contact.

Linda Merritt, Research Director, HRO, NelsonHall