BENEFITS BUSINESS
Using the Internet to communicate benefits information
can save time and money, and increase liability
By Len Strazewski
Web-based programs ... allow individuals to choose from
several health plan options offered by their employer.
Independent agents have learned some big lessons about the Internet in the past several years, and many agents have turned themselves into Internet marketing experts--selling primarily personal lines to a broad, often national, audience.
By providing online rating from their best carriers and insurance educational information from qualified sources, many agents have turned their agency Web sites into comprehensive portals that invite consumer interaction and future sales.
Don't stop there. Internet expertise can also be key to building a growing practice in employee benefits and related insurance products as employer clients turn to online resources for a wide range of employee benefits-related services.
Consultants call these services "e-health," and like most employee benefits trends, they are driven by rising health care costs, explains Cathy Tripp, a senior health benefits consultant at Watson Wyatt Worldwide in Minneapolis. For the past four years, employers have watched their employee benefits costs increase in double digits each year--in some cases doubling over previous years.
As a result, they have been grasping at any techniques and technology that could help control their overall employee benefits costs, she says. The Internet has been one of the most prominent new technologies, and employers have generally given their business to health plans and insurers that have been proactive in offering online benefits applications.
"Over the past few years, employers primarily have used Web-based tools for their annual benefits enrollment season--to help employees evaluate and compare health plans, coverage and costs as well as make actual enrollment decisions," she explains.
This trend parallels the growth of self-directed retirement plans that allow employees to get daily valuations and make investment decisions using company Web sites. Some health plan providers have adopted that approach with Web-based programs that allow individuals to choose from several health plan options offered by their employer, including plans with very large deductibles or health care management funds that are controlled directly by employees, not carriers.
This e-enrollment process has paid off in real savings, she says, reducing annual sign-up costs by as much as 60% to 70%. Agents who have used their technological savvy to screen health plans and third-party administrators and package these online services with policy delivery have come out as heroes. Those who ignored technology often lost business to bigger brokers and health plans that market directly to employers.
Employers view their agents as their insurance general contractors, she says. When they have insurance-related needs, they expect their agents to help them navigate the services and choose the best providers. It's not unusual for agents to assist property/casualty coverage clients in locating loss control engineers, independent adjusters and actuarial consultants when their risk management needs call for these services.
"Agents can't afford to be asleep at the wheel in the area of employee benefits services," she adds. "Their clients' needs are growing dramatically as their costs increase, and more often those needs are tied directly to the Internet."
Tripp says the early administrative savings of online employee benefits enrollment has largely played out, leaving employers anxious for new cost control prospects. As a result, employers are thinking hard about using the Internet to deliver advanced health management information and special wellness, as well as disease management services.
A recent survey of 200 large employers revealed that three of four respondents are likely or somewhat likely to support employee health care education using Web-based tools in hopes that additional access to information will lead to smarter and less expensive health care decisions.
Tripp says some employers are already using external links to connect employees with independent medical and health sites such as the American Cancer Institute, American Diabetes Association, American Health Association and the Centers for Disease Control and Prevention. These sites allow employees to perform health risk appraisals, obtain information on fitness, nutrition and wellness, and create personal health record sites to track doctors and medications.
The next step, Tripp says, is to link employees with disease management programs that assist employees with special health exposures to manage those diseases more effectively.
"The return on investment of an e-health initiative is probably going to be defined in the long term of wellness rather than an short term of administration," she says. "But the success of disease management programs has been well documented and should be even more effective if they can be successfully delivered with online programs," Tripp says.
As employers add these self-directed plans and online health care content, they will once again turn to their agents or brokers to identify reliable services and package programs with their health plans, Tripp says.
"Many employers have generally followed the lead of their health plans in providing health education, but more and more often, they now want independent, quality content that is not linked to a single insurance company or provider network," she says. "Agents need to be ready to meet those needs."
How can agents pick out the good from the bad online? More than 25,000 Web sites offer some sort of medical information on more than 600,000 individual Web sites, so the task can be daunting.
Here are some tips from the American Telemedicine Association, a medical industry trade group that represents content providers (http://www.americantelemed.org).
* Choose sites you and your clients can trust. Are the sites sponsored by medical associations or major medical centers that serve your clients' locale? Do health professionals review the content and update the information regularly? Look for seals of approval from the American Medical Association (http://www.ama.org), the Health on the Net Foundation which developed an honor code for online health information sites (http://www.hon.ch/HONcode) and the Internet Healthcare Coalition (http://www.ihealthcarecoalition.org).
* Conduct due diligence. Post messages on online discussion groups and ask Web-savvy users about their favorite sites. Gomez Advisors (http://www.gomez.com), an online consumer survey group, rates e-health content sites based on consumer surveys and posts consumer comments.
* Watch out for quacks and sales sites. Be wary of sites that claim most diseases are caused by faulty nutrition and can be treated with supplements. This is often a come-on for marketing programs that your clients should not tout to employees.
Prescription drug sites can be tricky since individuals can legally buy prescription drugs online, but most medical practitioners say individuals should not be diagnosed or drugs prescribed based on an online questionnaire.
When employers take the plunge into e-health, they may also be taking on additional liabilities and require additional liability insurance to protect them from new risks. Most large employers that sponsor retirement benefit plans or self-fund health benefits already purchase fiduciary liability insurance to protect them from losses resulting from the breach of duties proscribed under the Employee Retirement Income Security Act (ERISA) which sets standards for health and welfare benefits as well as retirement plans.
Among other risks, fiduciary liability insurance indemnifies employers from lawsuits that may result from disputes over employee benefit communications materials and legally mandated summary plan descriptions.
Employers that provide a broad range of e-health information online to employees may be increasing their fiduciary exposure, notes Brian Smith, fiduciary liability insurance practice leader at The Segal Company in New York. These clients may require an endorsement to cover e-health publishing.
"At the very least, agents should examine their clients' coverage to see how much coverage is granted by their existing insurance. Many fiduciary liability insurance policies will not specifically cover risks related to online information delivery," he says.
If e-health sites offer any online transactions, such as prescription drug services, home health supplies sales or online claims filing, employers may also require additional fidelity bond coverage to protect the employer from any dishonest acts by employees or vendors.
"Fidelity bond coverage has generally not kept up with computer technology and all of its applications. This coverage should be reviewed whenever an employer adds services to its employee-accessed sites," Smith says. *