Revolutionizing Absence Management With an Ecosystem Approach

Numerous employers have had difficulty managing the post-COVID increase in leave requests, due to sheer volume as well as varying (and frequently changing) state-by-state regulations.

To solve for this, benefits carriers are expanding absence management offerings and want these solutions to function seamlessly alongside disability insurance and other relevant coverage. Doing so benefits employee and employer satisfaction while aiding insurers: Inclusion of absence management on a client’s case can increase plan sponsor retention from 80%-95%.

Without the digital insurance ecosystem approach — and the access to cutting-edge services and technologies it facilitates — truly revolutionary absence management is easier said than done.

Key demand drivers of absence management

Quite a few states have either implemented paid family leave (PFL) laws, plan to do so in the near future, or are currently debating them in legislative sessions. 

To be clear, state-to-state regulatory differences mean private carriers’ involvement in PFL varies considerably. (Employer preference also sometimes plays a part, e.g., when states allow companies to choose private, state-approved PFL plans instead of funding state PFL through payroll tax.) But overall, the rise of PFL is certainly among the forces driving carriers toward full absence-management support.

Other factors are also at play, stemming from employers’ struggles to manage an increasing volume of leave requests. 

  • For many, this means sending requests for proposals (RFPs) to their carriers and asking for expanded group plans that include absence management and disability insurance alongside more standard coverages. Even some employers with 50 or fewer employees send their insurers RFPs with this request.
  • Others choose to outsource absence management. Although this is more common among smaller businesses (specifically, 46% of organizations with 1,000 or fewer employees), employer absence outsourcing increases about 5% each year.

Carriers with outdated core systems likely can’t support absence management and disability insurance at once. Meanwhile, many who outsource leave management find it can be expensive and may negatively impact retention.

Enable efficient absence oversight through the ecosystem approach

Working with an ecosystem of insurtechs and other forward-thinking vendors gives carriers access to the modern absence management technologies they need to solve this problem. Consider what a benefits insurer can offer with ecosystem-linked absence services:

  • Imagine one of your customer’s employees suffers a debilitating back injury with all the attendant consequences: ER visit, surgery, weeks of surgical recovery, and several months of physical therapy.
  • The end customer files a single event-based claim that covers multiple bases through advanced AI and automation.
  • The claim initiates processes for other relevant benefits: requesting a leave of absence and/or short-term disability, filing for an ADA accommodation (if applicable), and so on.
  • That initial claim filing triggers appropriate benefits payouts (i.e., accident and hospital indemnity coverage) due to ecosystem-facilitated integration between the absence management platform and policy administration.
  • The ecosystem approach ensures transitions between different insurtechs or vendors are seamless and never confuse employees.

Legacy core systems can’t necessarily support ecosystems that enable such efficient workflows — but advanced coretech with open APIs easily can.

Be innovative to address the need for absence management

Strong coretech is part of the vital foundation that can meet benefits carriers’ absence management needs. But it’s even more effective at addressing this requirement when used in tandem with an innovative strategy. 

The “greenfield” approach may be just the right choice to tackle this issue. This strategy allows carriers to develop new, testable initiatives that can capitalize on a pressing market need without pivoting organizations’ overall focus away from their primary goals and strategies.

For example, you could launch a new benefits offering that includes absence management but is only available to net-new employer customers at first. If it shows success, consider rolling it out at scale to the rest of your customer base. If tweaks are needed, adjusting the greenfield solution doesn’t disrupt primary insurance operations.

To learn comprehensively how the greenfield method helps you develop innovative benefits offerings, download our eBook “A Greenfield Guide for Group and Voluntary Employee Benefits.” The guide explores how using the greenfield strategy can ensure your approach to absence management (or any other new service) is goal-oriented but also agile, flexible, and open.

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