Employers cite enrollment, benefit admin systems as areas for 2016 tech spending
The Affordable Care Act has done many things, not the least of which is to shine a spotlight on the increasing need for benefits technology integration.
“The Affordable Care Act has really shone a light on how data has to flow from one system to another,” says Gerry Leonard, president, ADP Benefits Services.
And a new survey of benefits decision makers conducted by EBN indicates that employers’ overall benefits and HR systems aren’t necessarily well integrated. When asked how well benefits technology systems – everything from enrollment to administration and wellness – are integrated, 26% said “partly” and 12% said “not at all.”
Berwyn North School District 98, near Chicago, recently implemented a new technology system designed in part to integrate student information with payroll, benefits and the employee portal. “The No. 1 thing I would recommend is have the new company sit with everybody who has some sort of integral part in the system and sit with them for an entire day to show them what to do, and what that new system would need to be able to do as well,” says Michelle Luevano, benefits coordinator for Berwyn North School District 98.
Luevano, who also handles accounts payable, expresses frustration that the transition from the legacy technology system to the new one has not been a smooth one.
“If someone sits with you and knows what your current system does, hopefully that vendor will be honest and say ‘we can’t do this,’ or ‘we’re not the best fit for you,’” she says.
Also see: “Technology plays growing role in benefits.”
When it comes to benefits and HR technology, there is no one-size-fits all product, says Chris Pinc, director of product management for Towers Watson’s data surveys and technology line of business. “Employers first need to really understand how far they are willing to push the envelope in terms of new trends and make sure that the software that they buy is going to meet the needs of where they are right now and where they are likely to be in near term.”
ADP’s Leonard agrees. “Watch out for the bells and whistles pitch,” he advises. “Because there's a lot of software that will do what looks like everything under the sun. You really have to understand what does it take to service the technology – where are employees going to call if they get stuck with password resets? Where do your practitioners pick up one chunk of data and move it to another?”
EBN’s second annual technology survey indicates that 38% of respondents plan to increase their spending on technology next year, with 44% having already increased their spending from 2014 to 2015. Much of that spending is directed toward new employee portals and front-end systems to better integrate and utilize various benefits functionalities (health, retirement, voluntary benefits and more).
The survey, which attracted 308 responses, also found that almost 30% of those polled — drawn from an array of industries including health care, financial services, construction and transportation — expect to spend less than $10,000 so far this year on benefit technology. The majority, 52%, expect to spend between $10,000 and $499,999. Eighteen percent, meanwhile, expect to spend $500,000 or more.
“We have seen a real big increase on what organization spend on HR software in general, including benefits,” says Pinc. “A lot of organizations were holding off on making major upgrades for a few years coming out of the recession and now people are saying we have been waiting long enough.”
Forty-five percent of respondents to EBN’s survey say they plan to increase spending in 2016 on benefits enrollment systems, 47% say they plan to increase spending next year on benefits administration systems and 36% plan to increase spending on employee benefit portals (respondents were allowed to select more than one option.)
Fifty-three percent, meanwhile, indicated they were not planning on changing or replacing any of their benefit technology systems in 2016. Among those systems employers are considering changing or replacing next year, 19% of respondents said they were considering changing or replacing their benefits enrollment system; 18% cited benefits administration system (respondents were allowed to select more than one option.)
The items that benefits decision-makers are planning to spend money on in 2016 focus largely on better employee-facing systems: 45% would like new benefits enrollment systems, 47% seek better benefits administration tools and 36% are planning to spend money on an improved employee benefits portal. Money is also being allocated for new wellness enrollment tools (21%) and improved benefits communications systems, excluding social media (24%). Wellness tracking and analytics tools are also high on the priority list at 25% (respondents were allowed to select more than one response.)
GM Nameplate, a manufacturer for the aerospace industry, is transitioning to a new wellness provider in 2016 because the company is looking for more robust reporting tools, says Mellisa Ingraham, senior benefits specialist.
“We wanted to have better reporting tools as far as tracking aggregates so we can see what areas we need to work on from an educational level in our wellness programs,” she says. “The new program we’re looking at actually gives us a little bit more insight into actively using these reports.”
Also see: “Tech survey: What do benefit managers want?”
The biggest thing she’s looking for from the new wellness tech vendor is ease of administration. “It has to be easy for me to administer as far as tracking people’s points and being able to see if employees have completed all of the things they need to in order to achieve their [health plan] premium discounts,” she says.
Indeed, 34% of employers surveyed say their most important goal when making a benefit technology decision is that the technology will help the company gain greater control or oversight of its benefits.
EBN’s research suggests that on the whole, benefits professionals do feel a high level of satisfaction with the majority of technology they use — some 74% said they were satisfied or very satisfied with their benefits enrollment system. Respondents also expressed satisfaction with their benefits administration system — 74% said they were “very satisfied” or “satisfied” with their benefits administration systems.
EBN surveyed U.S.-based decision makers in early October 2015 on their spending and overall processes in benefits technology.