How and When to Calculate Benefits Decision Support ROI
Deploying a quality decision support software to help employees make better benefits decisions is a financial and time expense for HR teams. Of course, some software takes longer to implement, and costs more, but how can you show the Return on Investment (ROI) for implementing a new tool? We suggest you review metrics before open enrollment begins, in real-time during the event, and after its conclusion to determine benefits decision support ROI.
Pre-open enrollment metrics
Before open enrollment is the time to look at your plan design and early communications.
Your benefits consultant or broker is key in reviewing your current medical, dental, and vision plan design, and providing recommendations for slight adjustments or more drastic changes. While their modeling can help provide an overall financial picture of the change, predicting employee behavior can be challenging.
Test your plan design
Loading your new plan design into a sandbox version of your decision support software can give insights into what plans will be recommended in different scenarios. By using a baseline set of employee characteristics, you should test out the plan design and see the recommendations being made and compare that to the previous plan outcomes.
Advanced reporting tools, such as Tango Decision Assist™, can also run large-scale simulations and output the results. For clients who integrate medical claims into the tool, we can provide personalized recommendations for each enrolled employee based on the previous 12 months of claims data. In cases where clients do not have claims, we generate results based on our national database of cohorts by matching employees and their families with “people like them.”
These personalized recommendations can also be used to create targeted employee communications. You can let employees know what plan is best for them this upcoming year, and how much they will save financially in making a switch, as well as how the new plan differs from their current plan. At Tango, we call this Decision Assist Precheck.
Real-time feedback during open enrollment
Identifying issues and trends while open enrollment is underway can help you course correct and improve the employee experience in real time. However, timely access to data is critical. Depending on your decision support tool and benefits enrollment software, how much data is available and what you should do with it?
Measure employee engagement
You should look at a variety of indicators to track employee engagement including:
- Traffic to the software – total numbers and unique visitors
- Successful completed sessions
- Number of medical spending scenarios run
- Time spent on the tool
- Geographic location of user
- Usage of SSO vs direct link
- Use of claims data.
If traffic is lower than expected, or employees from a certain location aren’t engaging, this data can help you perform targeted communications to increase usage.
Track enrollment trends
Identify recommendation and enrollment trends. By tracking which plans the tool is recommending compared to your enrollment numbers, you can spot trends that aren’t in line with your expectations. Also, reviewing recommended contributions to savings accounts, such as FSAs and HSAs, and comparing to payroll deduction changes can help you spot if employees are planning to save the appropriate amount. You could include some verbiage in a mid-OE communication encouraging employees to rethink their savings strategies.
Some employees will still have questions even after using a robust decision support software. You can have targeted discussions with employees based on their experience and the results from the tool. Third parties such as Tango can also extend your team and provide benefits coaching to employees.
Post-Open Enrollment Analysis
Once your Open Enrollment closes, typically the activity shifts to data feeds with carriers in preparation for the new plan year. However, there are deep insights your decision support software can show that can help formulate your plan for the start of the plan year or roll out targeted communications to fix issues. Make sure to complete your post-open enrollment analysis quickly so it’s fresh in your mind.
Aspects that should be considered:
- Migration report: Line up employee decision support recommendations with actual enrolled plan to determine adoption and trust of the recommendation. Review recommended HSA/FSA contributions with actual elected amounts.
- Behavioral usage: Review engagement levels of the tool, including number of unique users, number of scenarios, time spent within the software, number of videos and educational content reviewed, total modules reviewed, geographic location, and mobile vs desktop usage.
Benefits decision support ROI calculations
Ultimately, an ROI calculation provides the best indicator of the success of your decision support tool. Consider these factors:
- Migration of employees to less expensive plans: The savings between your plans and the software’s influence on employees switching can be counted.
- Medical trend influence: Year over year, as you work with your decision support vendor, analyze the medical trend for employees who use decision support versus those who do not.
- Increase in contributions to FSAs and HSAs: For every dollar committed in payroll deductions, you save on payroll taxes.
- Corporate tax savings: If you offer an employer HSA contribution, you save on corporate tax for these dollars, and if the decision support software increases those enrolled in HSA-eligible plans, the savings can add up.
Decision Assist software provides critical insights into your employees’ behavior before, during, and after open enrollment. Reach out to us to see how we can deliver a strong Return on Investment and a better benefits experience. We can also help you evaluate vendors or create a business case for decision support.