Should you enroll enhanced benefits yourself, or can a professional enroller help to create clear communication while maximizing enrollment and delivering better client satisfaction – and what are the financial considerations of that decision?
That is the question that Allison De Paoli discusses in this episode. Her firm, De Paoli Professional Services, specializes in becoming an extension of your office, enabling a more direct and in-depth communication about employees’ enhanced benefits in an effort to maximize participation.
We explore whether (in some situations) using benefits enrollment software makes more sense than doing in-person enrollments. Allison also explains that success in this practice area represents a combination of art and science – exactly the kind of nuance needed to help employees make the best choices for themselves and their families.
Finally, we discuss how some employers are making the choice of baking enhanced benefits into their plans, and what that means for advisors.
David: How can using professional enrollers help increase revenue and client satisfaction? We’ll find out on this episode of Shift Shapers.
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For a lot of really interesting reasons, there’s been a renewed interest in enhanced benefits, and there’s always the question when you talk to Benefit Advisors about that. About what the best way is to enroll folks to be both effective and efficient, and our guest today, Allison DePaoli, who’s the Founder and Benefit Enrollment Expert at DePaoli Professional Services, practices in this area, and has studied extensively, and we thought that Allison could help us answer some of those questions.
So, with that welcome Allison …
Allison: Thank you, pleasure to be with you today.
David: There are lots of Benefits Administration Systems, and some of them have pretty decent decision support tools, but you still counsel that one on one enrollment is best. Why is that?
Allison: I do. One on one enrollment is best for a few reasons. First, it is still the crème de la crème of communication. There is nothing that beats a person sitting with another person to have a full explanation of their benefits. Today, forward thinking brokers are talking more and more about medical management, cost containments, scheme-e networks, RX discounts, where you go to get the best care. That is a lot for a C-Suite to absorb, let alone a regular employee. Even mid-level and senior level executives. Most people spend about 10 minutes a year on their benefits, and when you start to insert services like this, they do require a fair amount of communication, not just on a one on one basis, but in a variety of manners.
So decision making support, in an online benefits enrollment, an app on your phone that will help you find a provider, regular communication from HR, as well as the traditional group meeting. So, when you piece it together, one thing at a time, if you’re getting to six or seven forms of communication, you’ve fully addressed the communication needs of the group.
David: So it’s not an either/or? It’s kind of more of an “All of the above?”
Allison: I think it’s an “All of the above.” I worked for a gentleman who I just loved, who gave me the rule of 8’s, when I was teaching a group of people something new, and I’m not an overly patient person, and I was not allowed to express my impatience until I had explained something 8 times. Once I explained it 8 times, I could lose my patience. Rarely, did I get to 8 times.
So when you’re communicating in a variety of fashions, and over a period of time, people start to absorb what they need to do better, most people want to control their cost, they want the best care, they want to pay the least for their prescription drugs, they want to know what to do, when they need to do it, and they need to know how to piece everything together.
So, the more tools you give them, the easier it is for your employees to appreciate the benefits that you’ve worked on.
David: That makes perfect sense, now are there certain market size segments that lend themselves more to one on one enrollment, as opposed to other methods?
Allison: Traditionally, there has been a lot of public sector and large employer focusing on one on one enrollment. A lot of that has been product driven, sort of in the enhanced benefits arena. That is changing. With the advent of so many new tools, and so many different kinds of ways to piece your benefits package together, it is becoming a more holistic communication mechanism, so when we send a team, or when the industry standard now for sending a team is that they’re going to communicate all the benefits.
They’re going to get your medical questions answered, they’re going to refer where you need to go to find this piece of information, they have their own tools to make sure you understand how to use an app, or an advocacy line, or an RX discount plan. So, it’s much more holistic, and as that becomes more prevalent, you see more and more employers engaging in that service. So, used to be 1,000, maybe 500. Now you’re dropping that into the 500, the 200, the 50, and for small employers it’s always been more personal. Maybe you weren’t talking about a whole host of products, but if you have an employer with 20 or 25, or even 40 or 50 employees, and it’s been your case for a while, you know who those people are, and they’re going to come to you with questions.
David: Would you recommend in that kind of situation that the Benefit Advisor do that enrollment themselves, rather than sending somebody from their office because they are so visible and so familiar to the case?
Allison: I think that all Benefits need to be sold, not in an uncomfortable high pressure way, but I do think that they require some explanation, and sales education are very similar tools. You are explaining something to somebody so that they see the value in it. I think a professional salesperson is best suited to that, and I think it also allows that professional to see what is actually happening, and what people like, what they don’t like. If you don’t do that, there’s a lot of miscommunication, or misinformation, and you can solve a lot of problems in that sort of one on one environment, or a small group meeting environment, when it’s a small employer.
David: So, if I understand you correctly, what you’re saying, especially in the smaller segments, is for advisors who are being asked to do more with less, who’s staffs maybe have gotten paired back a little bit because of commission compression, it’s critically important for them to do those one on one’s, because they will ultimately lessen the service burden of their office staff?
Allison: I think it does lessen the burden of their service staff. It also gives them a pulse on what is happening, and I know it can be a little scary to do a one on one enrollment yourself, you can hybridize that, you can do some one on one, benefit platforms are getting more and more user friendly and useful for smaller case sizes, you can introduce that into your case as well. That is a great opportunity to grow the benefits package.
David: Is this one on one enrollment, is it art or science, or some place in between?
Allison: I think the technical aspects are science, but I think there’s a lot of art to it. I think it’s a sales process. The best sales processes are structure and personal delivery, and personal delivery is all art. I think it’s very important to know and to be able to read your audience as to what is important.
There’s a lot of research about the generational differences, and how people like to be communicated to. The reality is that the baby boomer generation, and the forgotten generation, as well as the millennials, they all want information, they just want to receive it differently. But when they want a question answered, they want a question answered by a person. They don’t necessarily talk to artificial intelligence or into a chat box, they want to talk to a person who can explain it fully.
David: So, would you change your approach having the same conversation with a boomer vs a millennial, even though ultimately you’re going to deliver the same information?
Allison: I think you should always tailor your communication to the person sitting in front of you. I think one of the big misconceptions is that older people and younger people have different risk tolerances. The millennial generation actually has a risk tolerance that is much more similar to the greatest generation, than to my generation.
David: It’s interesting, because they’re also savers like the greatest generation.
Allison: They are.
David: As they’re becoming more and more part of the middle of that bell curve of the workforce, that’s becoming more and more apparent, and it’s fascinating that you make that connection as well, in terms of risk.
Allison: Yes, they are very risk averse, for the most part. Not every person. They are also very interested in understanding what they have. I think it’s really important to explain it to them.
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Now, the personal responsibility amounts on all of the plans that are being sold these days are going up. Is that driving a particular set of enhanced benefits, a particular set of products that you’re seeing more interest in, than we might have five years ago?
Allison: Absolutely. Gap insurance is becoming more prevalent. It’s becoming more something that the employer might pay for, or there might be a cost sharing arrangement between the employer and the employee. That will help alleviate some of the out of pocket burden. Accident and critical illness are still the standards, and if you bake those into the planning process, so when you’re sitting down with your renewal, and you’re deciding how you’re going to manage for the next year, if you’ve got a good accident product, and a good critical illness product, you can eliminate risk for a significant number of medical events, and a good Gap or hospital indemnity plan depending on what your clients’ needs are, will help eliminate a little bit more of the risk.
It can be a real challenge to be a young family, and starting your family. You know, newly married, and starting your family, and your maximum out of pocket is $4500 if you want to have a child. That’s a pretty big hit. So, baking the Gap plan or the hospital indemnity plan into the coverage can help eliminate that.
David: So, when you say baking in, is it kind of an opt out situation? Everyone is assumed that they’re going to get this? Or is it everybody gets it, whether you want it or not?
Allison: I think it can be either. In some situations you want a Gap plan that’s baked in, and everybody who goes into the medical plan gets that, and then that needs to be discussed in your group meeting, and your one on one follow up, but it doesn’t have to be particularly for smaller employers.
What offering a Gap or hospital indemnity plan on a voluntary basis allows, is for the employer to have a little more flexibility to increase their deductible, or their out of pocket, and offer this alongside. I think it works best when those decisions are made when the plan designs are being reviewed, and the funding is being reviewed as well. Then you know how you can pivot, and how you can move, and to be truly effective, it’s helpful if you can watch that plan develop over 3 to 5 years, so don’t plan just for this year, plan for next year, and the year after, and 3 and 4 years down the road.
David: Does the culture of a particular employer pay in to the decision of how those baked in benefits are offered?
Allison: It absolutely does. Most employers really try to do the right thing by their employee. Employees are a valuable asset, and they really do try to do the right thing, and they may not understand how to both do the right thing for their employee, and do the right thing for their operating budget.
If you have all this on the table to start with, you have more flexibility in both situations.
David: In your practice, do you find that, can you generalize? Are there certain types of employers that tend to go one way vs certain types of employers who maybe tend to go in another direction?
Allison: More forward thinking employers tend to look at a more holistic package, and employers and industries that are very competitive for talent look at more holistic benefit packages, and what they can add that will attract or retain an employee. Talent can be very difficult to keep, talented employees, you want to keep them. It costs 20% on the low end to replace an employee if they leave. It can be a substantially higher cost for a more high level employee, so you want to do what you can to retain them, and by enhancing your benefits package, you have an opportunity to do that.
The other thing that I’d like to point out, employees don’t necessarily expect an employer to pay for everything, or even to contribute to everything. Particularly with younger employees, they want to know how many dollars they have to spend, so more like a defined contribution, or defined contribution for this, you’re going to get that, and the other things they will participate in them or not, whatever it is that works best for their situation. Not everybody’s the same, but everybody wants a benefits package that works for them.
David: Of course, and what I’ve started hearing, especially millennials, are keen on tailoring that for themselves. Would that be an accurate statement?
Allison: Absolutely. Much more so, than older generations.
David: So, is this like an awful lot of other employer based initiatives? Would it be fair to say that communication and education, even prior to enrollment, are really key in a commitment from the C-Suite?
Allison: Commitment from the C-Suite is the most important indicator of success.
David: Fascinating. So, if you’re talking to a Benefit Advisor, long before the enrollment happens, how do you counsel them? What’s that conversation like? What should they be talking to those C Level folks about?
Allison: They should be talking about benefits packages as a capital expense, and not an operating expense. For the most part, employees are considered a capital expense, and not an operating expense, and benefits packages need to be managed. Every process in most businesses is managed. Everything you buy, everything you sell, has a purchase price, a value, everybody’s looking for how to reduce their costs. How can I buy it more effectively? How can I use it more effectively? How can I buy it more inexpensively?
By considering benefits to be a capital expense, you put some of that thought right into the process. You’re starting there. It’s not coming later. So you want your unit cost to be as low as possible, by considering it a capital expense, that is a C-Suite understanding of what that is. Oh, I should look at it as a business expense, how do I manage it?
David: It’s fascinating that, back in the days when I was selling, it’s fascinating that employers will spend months evaluating a $200,000 piece of equipment, but they don’t want to spend more than more than an hour, talking about their $4,000,000 medical plan.
Allison: Correct. That $4,000,000 medical plan, if it’s not being managed can probably be delivered for a significantly lower cost.
David: Absolutely. So, back to advisors. Some advisors have a perception that using an Enrollment Firm, using Professional Enrollers is too costly, but if a one on one enroller is more productive, where is that cross over point, and where do they figure out where that line is?
Allison: Traditionally, enhanced benefits have been used to fund a one on one enrollment. There are some costs, and there are some risks. You do need buy in from the C-Suite, there does need to be a commitment to making sure that every employee is communicated to on a one on one basis. So, there is some skin in the game for an employer. There’s some time, there’s some making sure people get through the enrollment, so the cross is, how effectively do you need your benefits to be used? How much do you value how your employee is using their benefits?
If an employee can feel more satisfied in their job, because they’ve had this experience, which realistically takes about 20 minutes per employee, and that increases your retention by 3%, 5%, 8%, what is that worth to you? What I think you’ll find is that, that cost, at one on one enrollment, is well under that in cost.
David: One of the things that you’ve been nice enough to do is provide for Shift Shapers listeners, a link. If listeners click on the link to your logo, that’s on the left hand side of the Shift Shapers online page, or they look in the show notes there, you’ve made available a couple of calculators that will help advisors figure that out. Can you talk a little bit about those two different calculators, and why you use them, and how they help?
Allison: Sure. There’s two calculators there as you said. One is for use if you are conducting your own enrollment, using enhanced benefits, some traditional products like accident or critical illness, that have a fair amount of heaped first year commission built in, and you can see what revenue you can drive, and that will help you determine how much expense you want to use when you’re doing your one on one enrollment.
The other calculator there is for if you’re using an enrollment partner, to help you with your enrollment. The commissions are lower if you’re using a partner, but those dollars are completely expense free. So, if you’re looking at increasing your revenue about 15 or 20%, that is revenue that will go directly to your bottom line.
If you prefer to do it yourself, there will be some costs. There will be some time out of the office, you will probably need an online enrollment platform, those are very cost effective and becoming a standard of business like good customer service. Whereas, five years ago that was a newfangled toy, and you might need some of your own staff out of the office for groups that are a little bit larger.
Your call. You may want to mix and match that up. You may find that with this group of employers, you want to use that yourself, so you’ll understand how much revenue you’re driving for yourself, and there may be other instances where you want to use a partner for that, and you’ll see how much the enrollment actually costs, because there is a commission split built into that, and you’ll see how much revenue you’ll drive directly to your bottom line.
David: So, at the end of the day, it’s really a balance between being effective and being efficient, right?
Allison: Correct. Isn’t it always?
David: Well, Peter Drucker thought it was, but other folks not so much. You know, Benefits Advisors, one of the nice things that I think is happening, if you can say there’s a nice thing that’s happening from the commission compression that’s going on, and from being asked to do more with less, is that I think a lot of Benefits Advisors are really starting to look at their businesses as a business, rather than just going out and dropping product on folks.
I think ultimately, that’s a very good thing. But this notion of being effective and efficient, hasn’t always been part of the calculus of all Benefits Agencies, as you know, and today I think it’s more. I presume you’re seeing that as well in your discussions?
Allison: I am seeing that in my discussions, and I think in every market there are some brokers that are more forward thinking, and thinking more like businesses, than about just running an insurance agency, which I agree with you, has often not run as a traditional business.
David: So, we have about a minute or two left. We always like to wrap up our interviews by asking our subject matter experts, where do you see the future? What do you see happening with enhanced benefits, and then how firms such as yours, and other in the industry interact with Benefit Advisors?
Allison: I think one of the most important things to understand about enrollments, is there are basically two parts. There is the project management. How do I execute, and deliver this project? You know, I need a timeline, I need materials, I need some structure, and then it’s a communication piece. How am I communicating to all of the different parties? Because there’s the C-Suite, the HR Suite, there’s an employee, there’s a management staff, there’s on the other end, there’s carriers, how am I getting this information back to carriers?
So, there’s a whole host of tools that you can play with. To me, that’s the interesting part. There’s apps now, where you can provide advocacy service, and you can provide access to medical management, to telehealth, to drug discounts, where is the most effective place for me to get my drug? My ID cards can be in there, you can do a text messaging campaign, “Hey everybody, wellness fair is next week, please come we’re going to make sure that your wellness benefits get filed.”
Those are all different kinds of tools, so the fun to me is integrating them all together.
David: It looks like there’s going to be a lot more fun, as we get deeper and deeper into this world of enhanced benefits. It certainly has become something that for all the reasons we discussed, is becoming more prevalent, or there’s a resurgence I guess you might say, in that area. But a great place to leave our interview.
Allison DePaoli, Founder and Benefit Enrollment Expert at DePaoli Professional Services.
Allison, thank you so much for sharing your expertise with the Shift Shapers audience.
Allison: Thank you for having me, it was a pleasure.
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