May 16, 2023

4 learnings from building vs buying API technology for benefits enrollment

To build or buy API solutions for modern benefits enrollment? Experts from Bennie and Ameritas discuss how to navigate the shift.

Gary Davis

Delivering a modern enrollment experience that delights consumers and empowers brokers is no longer a pipe dream. The technology now exists that lets industry players do benefits administration with much more efficiency and accuracy than the status quo.

But understanding the opportunity and realizing its full potential are two different things. To hear how leading organizations are navigating the path to building versus buying API technology for benefits enrollment, I welcomed Jake Bendler, VP of National Accounts and National Partners at Ameritas, and Greg Autuori, Senior VP of Operations at Bennie, for a Noyo webinar.

While I highly recommend watching the replay, here are four takeaways from our discussion:

1. Build versus buy is not an either/or decision

It’s easy to get trapped in binary thinking. But as Greg and Jake called out from their own experiences at Bennie and Ameritas, most organizations won’t commit wholly to one strategy. It’s a nuanced decision, shaped by parameters such as budget, business goals, and the complexities and timelines of integrations — especially since for most carriers, it’s not feasible to build to every partner across a broad network, so both approaches are necessary.

publishedBuild vs buy: Creating a leading enrollment experience

“I've really learned that there's no single correct answer,” said Greg. “Rather the path that you choose needs to align with your business goals. If it’s speed and accessing as many carriers as possible quickly, then it makes the most sense to buy. But if you have the luxury of having a little more time to figure it out and you might be able to influence a significant piece of your operation by building an integration and going deep in one direction, then maybe that's the path you take.”

“We get the question all day long of, can you just build to every partner? And in the short term, the answer is probably just not right now,” said Jake. “I believe legacy platforms, new all-in-ones, and even, dare I say, middleware layers would probably say the same. Because you've got contract negotiations, you've got security and tech due diligence. You've got that architecture infrastructure and database layer as well. All of that has to be discussed before we can get into the meaningful stuff. And in most cases, the scale required by our best distributors, that well dries up. It's probably the leading rationale behind the build versus buy conundrum.”

Realizing the network effect

When it comes to building or buying in the benefits space, who you connect influences how you connect. Here are three different approaches Jake, Greg, and I discussed for using APIs to support more connections, grow lives supported, and drive greater adoption of products.

  1. Build and compel. When you build or acquire proprietary API technology and compel partners to build to those specs.

  2. Partner and steer. When you establish direct connections with a strategic set of partners and steer the relationship over time. This is how many companies get started on their API journey.

  3. Plug and play. This typically involves a one-to-many technology partner that enables a consistent, repeatable connection experience on both sides.

Related article: How to facilitate a modern enrollment experience that meets consumers where they are

2. Good data in, better benefits out 

The beauty of APIs is that they can eliminate the need for files and other manual systems of exchanging data, allowing member information to be processed in real-time. They also enable new levels of transparency, making it easier to track member changes and prevent issues. But as Jake, Greg, and I discussed, APIs alone aren’t enough. In fact, without the right automation in place, APIs can just move bad data faster. So it’s really about assessing from all angles.

“You can model out scenarios left and right, but until it's actually live and you see it in action, it's really tough to see exactly how that's going to impact your operational staffing plan,” said Greg. “As a baseline, capture tasks that exist today, how many folks are needed to manage them, and how much time that takes. Then, gradually layer on assumptions on top of that to figure out how it affects the initial scenario. You still have the operational considerations of making sure that the right data is put into the system. Whether it's done manually or whether it's done through an integration, if you've got bad data in, you're not going to have a good solution on the other side.”

“From the carrier's perspective, especially right now, it's all about a very conscious and methodical scale. Our best agency partners, especially those that have large employer blocks, that have a vested interest in our operational efficiency, they're really driving our integration strategy. It’s easy to say, if you've got clean data in, you've got a better experience out and less enrollment friction, improved persistency,” said Jake. “We're pulling an employee through a buying and enrolling experience, not pushing them through. And that improves participation.”

publishedPutting it all together: Pros and Cons of Build vs Buy

Going beyond core capabilities

As both speakers called out, one of the more difficult things to project with a build versus buy decision is how much time and energy an integration will save once it’s live. While a connection rally has to be utilized before it can show value, it’s still critical to model scenarios for planning.

Additional considerations our panel discussed:

  • Ease of use for customers, no matter who the customer is.

  • Time to market, to minimize the risk of things changing down the road.

  • Scalability, to meet partners’ distribution demands.

3. Be ready to measure the health of a connection 

An important piece of the puzzle often overlooked in the build vs. buy discussion is — how to measure the success of the connections created? This is a major challenge that a lot of the industry is just starting to think about. As Greg, Jake, and I explored, the end should be meaningfully better than what existed before and this can make for the best north star.

“I think OpEx reduction is still kind of the holy grail,” said Jake. “As a carrier, we have to be nimble enough to manage change, especially given the economic environment and the heavy amount of mergers and acquisitions we see with our agency partners. With heavy M&A comes potential consolidation of carriers for those lines of coverage. And you've got the requisite enrollment data that they house. All of this has to transition quickly and without errors that disrupt the typical sales and the implementation cycle. We as carriers are really the party that's responsible for making that agency's transition pretty seamless.”

“Troubleshooting enrollment issues is not the reason that a customer signs up with us,” said Greg. “So if we can figure out a way to enable our team to focus on those higher impact things, that's a success. We measure that through very high level information. Customer NPS, customer retention, when we do our internal employee survey. If those scores are better now than they were before, then that means our employees enjoy their jobs better because they don't have to do quite as much of the transactional work.”

publishedMeasuring success of an API integration

Trends to track

One of the most valuable ways to measure success of a new integration is to track automation at a granular level and benchmark it to your peers. Automation rates directly translate to OpEx reduction and as automation increases, so does adoption and thus premium.

Our discussion also surfaced the following feedback loops:

  • Customer NPS, customer retention, and internal employee surveys — if these improve from pre-integration levels, you know you’re onto something valuable.

  • Error reduction, OpEx, persistency — lower administrative costs ultimately lead to more competitive product pricing, while persistency gains confirm product quality.

4.  Understand whether your strategic advantage is "the pipes" or what you build with the data

Last but not least, it’s important to understand whether the technology solution you need is going to be a core competency, something you expect to own and develop into “a secret sauce” over time, or a means to a greater business objective. Put another way, is focusing on the connection — or what you can do with the data — more important?

“From our perspective, focusing on the connection is the cornerstone of the carrier platform and employment of its agency right now,” said Jake. “And building that is pretty vital for trust. Focusing on the data, not necessarily owning the data, but using that data, builds employer-employee credit. Now you've got the pipes to cross-validate information with multiple sources in a clean fashion and the ability to allow the focus to be right back at the consumer. With a utilization benefit like dental and vision, that scalable data represents a lot of things… but mostly cost savings and, of course, persistency.”

“Most important to me is not showcasing the fact that we have an integration or just being able to facilitate the data flow,” said Greg. “That's great. But most important is how I can enable my team to focus on higher value work for our customers, because they don't have to think about the transactional pieces of the puzzle. Troubleshooting enrollment issues is not the reason that a customer signs up with us. And so if we can figure out a way to enable our team to focus on those higher impact things, then that's a success.”

Related article: Proactively detecting enrollment issues: Noyo vs Other Solutions

Building better benefits together

In today’s evolving benefits ecosystem, every ben-admin, carrier, broker, and insurtech has an important role to play in using technology to be more effective for their customers. To hear more actionable tips from our experts on navigating this shift, check out the webinar recording below!

If you do benefits, you need Noyo

The future of employee benefits is faster, easier, and more automated. Are you ready?