Preparing for open enrollment: Growing demands give rise to fiduciary advising

Much like Amazon revolutionized shopping for goods and services, savvy benefit advisers have an opportunity to do the same for open enrollment.

Holistic and curated benefit offerings are key to attracting and retaining younger generations, according to Chris Morbelli, EY's life and group insurance transformation leader, who cites EY-LIMRA research over the past two years to support this premise. 

"We believe over time there are certain benefits more specific to certain generational age brackets," he says. Examples include student loan repayment, tuition assistance and mental health services rising in importance alongside medical, dental and vision coverage for a more well-rounded offering.

Having spent 26 years in the industry, Morbelli has seen the standard benefits package evolve into five dimensions of well-being that include physical, mental, financial, professional and societal (i.e., volunteering for community service). 

With a generational shift taking place, he says employers now need to think about creating tailored, personalized solutions across each of these areas that meet the needs of their most diverse ever workforce. EY-LIMRA researchers call it a wheel of wellness.

As many as 45% of Generation Z employees are very or extremely interested in mental health benefits, while 46% of Millennials feel the same about career development — percentages that he says are high relative to traditional benefits. 

This is the final installment in this series about open enrollment strategies for benefit advisers. Catch up on the full series here:

• Part 1: Preparing for open enrollment: Advisers face significant headwinds in Q4
• Part 2: Preparing for open enrollment: Generational tipping point shaping adviser strategies
• Part 3: Preparing for open enrollment: Benefits literacy a linchpin for success
• Part 4: Preparing for open enrollment: This adviser backs hyper-personalized messaging
• Part 5: Preparing for open enrollment: Rx benefits redesign holds promise for cost control 

Morbelli also points to a shift from transactional to more strategic advice wherein open enrollment is moving beyond plan options to offering insight and guidance. In meeting with several leaders across key brokerage firms and general agencies to learn their perspectives of the future, the biggest takeaway was that employer clients are demanding more from them than ever before. 

One particular broker emphasized rising levels of depression and ADHD levels, along with more prescription drug usage, especially in the weight-loss category, as well as a huge uptake in fertility benefits. It was both impressive and humbling to hear just how many different topics they are being asked to navigate, he reports. 

"What I heard loud and clear from advisers is that as an industry we need to continue to focus on product development that drives higher utilization with much clear data around ROI and value proposition," he says. "So, it's not about expanding the number of covered conditions for a product and not getting the utilization. It's about focusing on covered condition expansion to drive up utilization and create higher levels of value."

Rethinking roles and compensation

Pressure is mounting on brokers to become a fiduciary adviser for their employer clients. Benefit Advisors Network CEO Perry Braun has seen costs rise on the errors-and-emission side of the business in response to compliance headwinds that run the political gamut. 

"We need to make sure that our agencies are staying abreast of that and advising their clients appropriately with respect to compliance," he says, noting the danger of reputational harm if they're not paying close enough attention to audits, as well as state and federal requirements. 

Read more: Why Benefit Advisors Network is a powerful ally to benefit leaders

Braun sees a gradual movement toward fee-based consulting, which in some instances might be used in conjunction with a commission-based system. This trend casts open enrollment in an entirely different light. 

"I think this has a little bit to do with defining the scope of service that you're providing to the customer," he observes. For example, it would make sense to charge a flat fee if more HR-related or integrated technology support is being provided beyond benefits consulting.

Commission revenue allows agencies to "lessen the HR budget because those dollars can flow up into an overall scope of a consulting agreement and have it managed that way," he explains, noting how advisers can better assist understaffed HR teams. "So, I think the tools and levers of how to support the costs associated with providing the service is where the agency and the client are going to get creative in order to get the right outcome."