The health benefits industry is evolving faster than ever before, but one constant remains: third-party administrators (TPAs) still shape the relationship between many employed Americans and their health benefits.
With the growing importance of emerging healthcare trends, it’s key for third-party administrators to not just keep pace, but to lead the charge in adopting trends and delivering cutting-edge user experiences in order to stand out amongst competitors.
Amid this backdrop of change, one trend takes center stage: the increasing demand for personalized employee benefits. Recent studies highlight a seismic shift in employee expectations, with a vast majority advocating for benefits tailored to their unique health needs. For example:
MetLife’s 2019 Employee Benefit Trends Study reported that 93% of employees said the ability to customize their benefits is a “must-have” or “nice-to-have” option. In addition, 72% of employees said having customized benefits that fit their needs more closely would increase their loyalty to their company.[1]
MetLife’s 2023 Employee Benefit Trends Study found that 54% of all employees wanted personalized benefit recommendations.[2]
Clearly, the gap between employee wants and workplace realities is widening, underscoring the pressing need for a more personalized approach to healthcare benefits. However, under ERISA (Employee Retirement Income Security Act), employers can offer different plan options, but these options must be uniformly available to all employees within the same class. Thus, individual customization beyond selecting from predefined options is not typically allowed.
While complete individual customization of health plans is not feasible, offering a variety of tailored options can give TPAs a competitive edge if they can address the diverse needs of today’s workforce, which spans various age demographics and encompasses a wide range of health concerns – from mental well-being to chronic conditions.
Although this discussion primarily focuses on self-insured (including level-funded), ERISA-governed plans, it’s important to note that fully insured products are subject to state insurance regulations. These rules often dictate specific benefits that must be offered and consumer protections that must be followed. For TPAs working with fully insured products, understanding and navigating these state-specific requirements is critical for ensuring compliance and providing competitive offerings.
Voluntary benefits, which are usually 100% employee-paid through post-tax payroll deductions, represent another key area where TPAs can add value. While these benefits are often outside the direct scope of ERISA, provided the employer does not “endorse” the plan and only facilitates payroll deductions and does not endorse or contribute to the plan leveraging the “safe harbor” provision.
Either way, they still require careful coordination to ensure compliance with applicable laws. TPAs can assist employers in structuring these offerings in a way that meets regulatory requirements while also addressing the diverse needs of their workforce. By doing so, TPAs help bridge the gap between what employees desire and what employers can legally and practically offer.
For employees, increased personalization can help them feel heard and cared about.
Personalization means having the ability to select benefits that are most relevant and valuable, which can lead to greater employee satisfaction, engagement, and overall well-being. It acknowledges that employees (and their dependents) have distinct needs and priorities and empowers them to make choices aligned with their individual (and family) situations. Additionally, benefits personalization can shape a more inclusive and understanding workplace by accommodating the varied needs of a diverse workforce.With the help of healthcare technology, TPAs can deliver a more personalized benefits experience to members.
Enter Healthee, a forward-thinking employee health benefits platform revolutionizing the TPA landscape. By enabling increased personalization, Healthee empowers TPAs to cater to the individualized needs of employees like never before.
Through the integration of cutting-edge AI technology, Healthee facilitates a seamless user experience, offering personalized recommendations and information that resonate with each employee’s specific health needs within the framework of available plan options.
And, don’t forget Zoe, Healthee’s AI-driven personal health assistant, enables TPAs to provide a self-service solution to the market that allows everyone to understand each aspect of the medical, dental, and vision plan/coverage and find in-network, high-quality, low-cost providers near them with transparency pricing for their services.
Disclaimer: The views expressed in this blog are based on my personal experience and knowledge in the TPA space. This content should not be construed as legal or compliance advice, and readers are encouraged to consult with a qualified healthcare legal professional for specific guidance.
References
[1] “Thriving in the New Work-Life World,” MetLife, 2019.
[2] “The Advantages of Employee Care: Creating human-centric employee experiences and work environments,” MetLife, 2023.
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