Can’t Afford Competitive Health Benefits? Now You Can
For large companies, identifying the right health plans and benefits options to offer employees can be pretty simple: Just bring in an HR and benefits consultant to collect and analyze the right data, and – presto! – your expert consultant will help your organization pick the right plans in no time.
If, on the other hand, you run a startup or small or medium-sized business (SMB), you probably can’t afford to bring in one of these six-figure consultants to help you pick the right health care and benefits plans.
That’s where Lumity, which bills itself as “the world’s first data-driven benefits platform for small and growing businesses,” comes in.
“We looked at the market and saw that the [consultants’] service is clearly valuable, but no 2-800 person company has the ability to afford it,” says Aaron Huang, vice president of marketing at Lumity.
Furthermore, the people behind Lumity also felt that existing benefits administration platforms didn’t actually solve the real problems that SMBs faced. Sure, these platforms often eliminated paperwork and automated certain steps, but Huang says the real underlying problem that needs to be solved is the skyrocketing costs of health care for employers.
“The only way to solve that, really, is to figure out – using a data-driven approach – what the needs of employees and employers are and how to map those needs to the right health plans and benefits designs,” Huang explains. “In order to do that, you need data to understand and quantify the needs of the people who need health care and drive them toward the best plans for those needs.”
How Does It Work? A Breakdown of ‘Data-Driven Benefits Administration’
Lumity is integrated with a number of national pharmacy benefits managers. When an employees creates an account on the platform, Lumity anonymously pulls the employee’s prescription history and uses this to predict the cost of health care for that employee.
To employers, Lumity gives an “annotated, anonymized picture of the total health risk and total anticipated health expenses for the upcoming year.” Huang says Lumity’s hope is that SMBs will be able to use this data to drive their efforts toward self-funding and self-insurance.
“A lot of employers are looking to self-fund or manage their own health claims, but without that visibility, employers can’t make that jump; CFOs can’t quantify the risk,” Huang explains. “On the macro level, we’re using employee prescription histories … to help employers optimize their health plans and make sure people are not overinsured relative to their needs.”
Why Should You Care? Because Better Health Care Options Can Help You Attract Better Talent
The big guys are out there offering excellent benefits plans (for example, check out what people have to say about Google’s health insurance ). If your SMB wants to compete, you’ll need to offer similarly comprehensive benefits.
The problem, however, is that health care plans can be expensive, which creates a tension in most SMBs: HR and talent acquisition pros advocate for the best benefits money can buy – because those benefits will attract great candidates – while the folks in finance argue that costs need to be reigned in.
What’s an SMB to do? Huang says a platform like Lumity has the potential to satisfy everyone.
“There is a way to have a win-win, but unless you understand the needs and demographics [of your employees] – and have some way to quantify these and optimize for both recruiting and retention and finance – you are going to have this tug-of-war between finance and HR,” Huang explains. “If everyone takes the most expensive plan, that’s great for recruiting and retention, but it’s going to break the bank.”
Finance gets to keep the bills low and HR/talent acquisition gets another tool for enticing top candidates. That’s definitely a win-win.