Acquisition simplifies quoting and modeling for self-funded health plans

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Imagine achieving major cost reductions on behalf of employer clients while spending only half the time and money quoting and modeling all types of self-funded health plans. This simple formula was baked into the DNA of Allay, built six years ago by software engineers, designers and health insurance experts whose key performance indicators revealed a jaw-dropping time savings on mundane tasks.

After being acquired in February by Novo Benefits, which customizes benefits for midmarket employers, it has been rebranded Novo Connection. The tech platform helps producers understand a group’s risk, customize coverage and secure competitive stop loss to match plan designs. As such, the thinking is that there’s no need to field a team of health actuaries.

“There’s a lot of expertise and knowledge that goes into underwriting and recommending self-insured health plans properly, whether that be level-funded, captive, or whatever,” observes Julien Emery, who co-founded Allay.

Turnkey solution for producers

Novo Connection bills itself as a turnkey solution for brokers and advisers like Adam Zebian, a VP in the employee benefits division of People’s United Insurance Agency, a subsidiary of People’s United Bank. What caught his attention was an ability to automate personal health questionnaires and aggregate data for a multitude of insurance carriers to secure stop-loss coverage, administrators and cost-containment vendors. The platform is a nice fit for his groups of 50 to 100 employees.

Novo’s acquisition of Allay offers brokers the pre- and post-sale support they need to streamline operations, according to Zebian. “They’ll help spreadsheet things in a format that will help us create the sale,” he says. But having access to higher quality data also enables them to suggest the right products based on client needs, he adds.

“The market is still relatively behind the times as it relates to automation,” opines Michael Poleman, president of Novo Benefits. “A lot of the brokerage firms are doing so much of this manually or with systems that really aren’t designed or well established.”

As a result, he believes many won’t even venture into the self-funded space because of the perceived complexities. Using the Allay chassis helps remove the mystery from self-funding, bringing what he describes as “Fortune 500 benefits down to the midmarket so self-funded employers and brokers can access things they’ve never been able to access before.”

Novo Connection essentially allows brokers and advisers to make confident recommendations on self-funded plans that drive down costs, “but they can scale their self-funding advisory practice without having to put in all these extra hours every time they want to put out a self-insured quote,” Emery explains.

How does the platform work? Census and claims data can be uploaded with any other pertinent information layered on top to determine a credible estimate on risk over the coming year. Several solution partners are indexed into the system to help build out a comprehensive risk profile and better gauge their potential impact on health outcomes.

Producers also attempt to secure competitive stop-loss rates based on the custom components and solution partners that have been put in place on a given group. Another important piece is ensuring that stop-loss coverage lines up with the plan document and all contracts to avoid any coverage gaps. A subsequent review of the automation helps eliminate errors and “makes it easier for even small brokerage firms to have the horsepower of an internal review team that a big brokerage firm does,” Emery says.

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