Should You Change Benefits Administrators During Uncertain Times?

With so much changing so quickly this year, companies have had to pivot to new ways of doing business and serving customers: optimizing digital solutions and embracing a remote workplace. What about your benefits administrator? Are they helping you to be agile and nimble as you adapt? If you’ve had issues with your current vendor in the past, the stresses of the COVID-19 pandemic may have thrown the weak spots into the spotlight. To help decide whether it’s time for a change in strategy, here are three important questions to ask.

1. Does your current benefits administrator provide real, proactive solutions to containing costs?

There are many employee benefit administration solutions available in the marketplace that do an adequate job. But if you’re looking to get the most out of your HR spend, you need to ask how your current provider will help manage the variability impacting your organization during the pandemic.

There are three ways to deal with benefit cost: ignore them, manage to baseline, or make fundamental changes that will improve outcomes and materially reduce costs. Many companies are cutting back on planned spend for the next one to three years. As you consider the ways in which your benefits budget will shift in 2021, given projected cost increases and uncertainty around the impact of COVID-19, you can take steps to minimize the disruptiveness of your cost management efforts.

The average total health benefit cost per employee surpassed $13,000 in the United States in 2019, and medical inflation typically outpaces regular inflation. This coming year will be anything but typical. Your workforce may be experiencing increased or different health and well-being needs due to the pandemic. Your benefits administrator should be helping you forecast the cost impact for your organization and your plan members – and suggesting ways to manage it.

Mercer Marketplace 365+ clients see immediate and long-term cost savings, from self-insurance, improved consumerism, network optimization, improved care management, and buying coalitions. Since inception, we have saved our clients $3.2 billion. On average, Mercer Marketplace 365+ clients save $1,000 per employee, or 7.4 percent of healthcare spend, in their first year. Once established, the solution continues to help employers mitigate healthcare trend, offering a 2.7 percent average renewal cost increase versus the national average of 5.3 percent before plan changes and 3.6 percent after plan changes for plan year 2020. In 2021, trend is anticipated to rise to 5.7 percent before plan changes, continuing to prove the need to control trend.1

As an example, after a poor experience with their previous benefits administrator, a globally recognized brand that manufactures apparel implemented the Mercer Marketplace 365+ solution. The company realized $4.2 million in first-year savings and enjoys predictable costs going forward.

2. How has your current benefits administrator managed the impacts of COVID-19, while mitigating risk?

The pandemic has introduced a need for higher levels of service to support employees through furloughs/layoffs, remote working and changes in medical and dependent care needs. Has your benefits administrator been able to address the needs of your workforce and maintain a high level of service?

Mercer Marketplace 365+ supports the unique needs of these unprecedented times with special enrollment periods, compliance support and return to work guidance while maintaining a 96% employee satisfaction rate. We successfully implemented a midyear change for over 1 in 5 of current Mercer Marketplace 365+ clients.

3. How well does your current benefits administrator handle employee engagement in a time of high uncertainty?

You should be seeing increased levels of engagement between your employees and your benefits administrator. Your provider should be offering online guidance tools and call center support that helps employees reach the best decisions for them and their families. Communications should demonstrate the value of plans, promote appropriate utilization, and support education and enrollment in voluntary and other value-added benefit programs.

One of our Mercer Marketplace 365+ clients was struggling to manage a large volume of benefits inquiries and tasks, which left employees feeling disconnected. Leveraging high-touch service delivery and responsiveness, Mercer Marketplace 365+ improved the experience for the company’s 5,000+ employees through contact center, web, and mobile options.

Well-managed benefit plans mitigate business and people risks, like COVID-19, as well as business disruption, rising costs, and regulatory penalties. Look for a strategic partner that manages risks, engages your employees, and delivers proven results. 

Now is the time to consider changing your benefits administrator if you don’t have the right partner to help you support your workforce in the new shape of work. Learn more about Mercer Marketplace 365+ today and how we can help you during this unprecedented time.

1Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2020

Andy Sexton
by Andy Sexton

Partner, U.S Mercer Marketplace 365 Solution Leader

Andy Sexton is a Partner at Mercer and is the U.S Mercer Marketplace 365 Solution Leader. He specializes in helping clients leverage integrated health and benefits solutions to live healthier lives, simplify their healthcare experience and save money through innovative programs and benefit solutions.

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