Adviser builds custom benefit platforms for employers

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Tom Avery doesn’t believe in taking products off the shelf to meet client needs. Instead, the founder of benefit firm Innovative Broker Services builds customized technology platforms to address specific employer goals and objectives.

Innovation “is fundamental to our culture,” says Avery, who earned a 2017 EBN Benefits Technology Innovator Award, a program designed to recognize visionaries who are driving technology innovation in the employee benefits space.

Founded in 2005, the Folsom, Calif., firm has 14 employees working with mostly small employers across Northern California, with an additional office in Texas.

In May 2014, Avery launched PaperlessHR, a product designed to help businesses manage their HR onboarding process, benefits enrollment and payroll data. It is fully automated and keeps clients in compliance based on their specific company needs.

Avery developed PaperlessHR because he saw a gap in the market that no broker was filling, he says. Large-scale HRIS benefit administration software is often unaffordable for small- and medium-sized businesses, he explains.

Those solutions, he says, can cost up to $100,000: “Small-businesses and medium businesses can’t or won’t afford that.”

Technology vendors, he adds, often focus on technology and not business needs. They build solutions that automate everything, but a carrier sometimes will only take paper forms.

Six goals
There weren’t any products in the marketplace that met the six goals Avery had in launching PaperlessHR:

1) Meets both employer and employee on their own terms
2) Is simple to use
3) Is customizable
4) Is compliant
5) Is affordable
6) Improves employee perception of an employer

At its core, Innovative Broker Services is a boutique agency — “More than just an insurance broker,” Avery says.

In the last several years, Avery has increasingly viewed his business as less of a benefit sales agency and more of a vendor manager. To him, that distinction means managing processes such as HR services for clients.

“That is really what our clients have always asked of us,” Avery explains. “It just took a while for us to say we do more than insurance.”

As a broker, “we ask a lot of questions, and then design solutions to meet client needs,” he says.

“Those same skills of analysis, implementation and vendor management can be applied to payroll solutions, to business processes, to compliance,” Avery notes.

Product details
The PaperlessHR platform is tech-agnostic, but 85% of Avery’s clients use it in conjunction with EaseCentral, a San Francisco-based technology company whose product with the same name is geared to both brokers and employers, and used by more than 22,000 employers nationwide.

The cloud-based software from EaseCentral helps companies set up and manage more than 50 types of benefits, coordinate payroll and HR, collaborate with employers on new hires, changes and terminations, and deliver completed tax information from one location.

PaperlessHR works in conjunction with existing technology vendors to fill two main holes employers are experiencing:

First, employees need instructions on how to use the system.

Sending an instructional document or video to an employee, Avery says, is not good enough.

“We like to think everyone uses technology, that’s not reality,” he says. “We have to be face-to-face with the employee and provide a way” for them to enroll on their own terms.

PaperlessHR can be administered three ways: completely self-service, by an employer or by Avery’s staff.

“Most brokers take [technology products] and say, ‘Here you are. Here is the instruction,’ and wonder why no one ever uses the software,” he says.

Second, Avery says he has learned over the years that brokers often give lip service to compliance.

Avery’s product guarantees compliance. His firm has an ERISA/Affordable Care Act compliance attorney on retainer and understands what each client needs to do to remain in compliance.

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Most compliance tasks include providing notices to employees on HIPAA rights, COBRA, the Women’s Health and Cancer Rights Act, CHIP and much more.

PaperlessHR automates the notices and tracks them to ensure those notices are delivered to employees, who must sign off on receiving them.

PaperlessHR then provides an audit log in case of a Department of Labor audit. The only caveat to the guarantee is that an employer must use the system, and so far none have said no to that.

“That is a huge differentiator,” Avery observes. “That is why PaperlessHR has been so successful.”

Instead of handing off compliance to HR departments, Avery handles it because “it is our responsibility. We are the experts in this area,” he says.

Why technology matters
With more than 12 years in communications and product development for call centers under his belt before becoming an adviser, Avery has a leg up on many brokers who are entrenched in the old way of thinking.

“He understands and is more comfortable with the technology,” says Kevin Trokey, partner at brokerage consultancy Q4intelligence in St. Louis, who works with Avery as a consultant. “He understands it has to be an integral part of how you operate.”

That’s not the case for most brokers, Trokey says, who are still tech-adverse. Part of the reason for the lag, he says, is until now there has been very little demand for brokers to have a grasp of benefit administration solutions — although they have been around for decades. The ACA, and all the reporting and compliance requirements around it, has built up a demand for automation, Trokey says.

In turn, if a broker does not provide such capabilities, they are not going to be in a position to meet the needs of their clients and will lose ground to competitors who can, Trokey adds.

However, adopting new technology can be a monumental undertaking.

Many agency owners “are not comfortable using [technology] internally and the idea of understanding it well enough to put it in place for their clients is overwhelming,” Trokey says.

“They don’t know where to begin,” he adds. “Even when they recognize they have to have it, they don’t have the bandwidth to go out and do the hard work that it takes to put these solutions in place.”

Time to get in gear is running out. A growing contingency, the 75 million-plus millennials currently in the workforce “don’t do paper,” says David Reid, founder and CEO of cloud-based EaseCentral, who points out more and more HR administrators are members of this generation.

Meanwhile, clients are rewarding Avery’s effort. Avery’s benefit firm grew by 28% in 2016 and existing clients are exuding praise.

Susan Lockington, director of HR and admin services at Sacramento, Calif.-based construction and program management company Capital Program Management, says her employees like the fact that they can use PaperlessHR to enroll anytime and anywhere.

“Being able to access the information from anywhere, have their spouse look over their shoulder, [means] a lot more information and less frustration,” Lockington says. “We had almost half of our employees complete the survey that followed the enrollment, and the word ‘easy’ was prevalent. Ratings were virtually all five out of five.”

Free of extra work
Although this is her first year with PaperlessHR, Lockington says the time savings has been substantial.

In previous years, she spent days creating a spreadsheet and a merge file to provide employees with a packet of customized benefit and rate information. She also spent hours making copies and assembling the enrollment forms, required summary of benefits information, etc.

After the employees received the information and submitted their applications and various forms back to Lockington, hours were spent reviewing each one and following up with additional information, she says.

Then, every form was scanned per employee and emailed to Avery’s office for a final review and submission to the carriers.

This year, using PaperlessHR, once the initial employee data was entered into the system, the entire open enrollment process was self-managed.

“Each employee had a customized page where rates and totals were calculated automatically,” she says. “The employees could choose options and see how that affected their bottom line.

“I had fewer questions and less frustrated employees trying to calculate their totals,” she adds. “After completion, the forms were contained online; the review process was handled by the system with an eye on it by Tom’s team. I literally could have gone on vacation. … I had to do nothing but check online to see if all the employees hit the submit button on time.”

Being free of the extra work has allowed Lockington to focus more on strategic goals. She can now “learn more about … the trends going on in benefits, instead of the paperwork in benefits,” she adds.

Costs and benefits
Of course, such an effort on Avery’s part did not come without a large upfront investment. Avery estimates he spent tens of thousands of dollars developing PaperlessHR, and it continues to cost tens of thousands of dollars a month in ongoing maintenance.

He outsources most of the technology maintenance, but also has an internal employee who spends close to 75% of her time assisting employers in adoption of the system, from training to implementation.

Even so, he is finding that he is offsetting those costs by offering more services to clients. Between administrative savings within the organization by allowing staff to focus more on long-term strategy planning and additional revenue from fee-for-service add-ons, including voluntary products, “it has really made the cost of the platform immaterial,” Avery says.

It is human nature for agency owners to question how much time and effort a new solution will require, Q4intelligence’s Trokey says. “But, an equally important question,” he adds, “is what is the cost of not having the technology?”

For those brokers considering adding such technology to their firm, Avery advises to start by listening to clients.

“Your clients will not come to you saying they are looking for technology solutions,” he says. “They are going to say, ‘I don’t have enough time in the day. I’m struggling with hiring new people. I’m struggling with ACA reporting.’”

The request for technology will come from other questions or comments. “If you listen and focus on trying to match goals for your clients to solutions you are bringing to the table, that is what will
drive you to look for a solution in how you look at your business,” he says. “It’s as simple as that.

“You don’t need new products, you don’t need to listen to carriers about the new product they have,” he adds. “You have to talk to your clients about what their goals and objectives are. Once you do that, you will find yourself doing things differently and find new revenue sources.”

In fact, Avery’s client Capital Program Management didn’t choose Avery for his technology, at first. It was the level of trust they felt with him and his staff, Lockington says. But PaperlessHR “was the icing on the cake,” she adds.

As a result, Lockington says she has no reason to search for a new broker, and plans to stay with Innovative Broker Services indefinitely.

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Advisor strategies Practice management Technology Insurance technology HR Technology ACA reporting Workforce management Employee benefits Compliance Benefit compliance Benefit management Benefit strategies Benefit administration systems Benefit communication Benefit plan audits