<capital-huge-letter>W<capital-huge-letter>e’re living in an era of personalization. From big-ticket items like mortgages and car loans to our everyday expenses like a t-shirt on Amazon, most services we use are powered by sophisticated data engines that create personalized experiences for each user.
That said, there’s one expense for most American families that remains generic and can often be mismatched with a family’s needs: healthcare. Despite its being one of the most personal areas of our lives–and on of the biggest spend categories–the new norm of seamless personalization has not reached financial healthcare services. There are hardly any customized financial products that enable customization in order to meet our individual needs. Employer-sponsored health benefits are the first financial product that many of us encounter and often lead us to examine the financial implications of our healthcare needs. These employee-sponsored benefits are also some of the least personalized options out there. Almost all of these plans are “one-size-fits-all” and every employee receives the same coverage no matter their personal situation or healthcare requirements.
Here’s just a simple illustration: a young, single employee, Elena, who loves to ski but has a tendency to end up in the ER, might want to invest in accident insurance. Accident insurance provides a direct cash payment in the event of a covered accident, making it easier to get through any kind of recovery period without dipping into a rainy-day account. This individual could pair accident insurance with a high-deductible healthcare plan that is triple tax-advantaged, enabling him or her to save for retirement.
Meanwhile, the skier’s coworker is Don, a dad of two with a child with a chronic condition. With the ongoing doctor’s appointments and occasional visits to a specialist, he really should invest in a low-deductible medical plan. Likewise, he’d want to know their specialists are in-network and may want to combine his family’s healthcare plan with life insurance coverage and vision insurance to cover eyeglasses.
In many cases both the young, single skier and the dad of two are offered the exact same plan by their employer. With all the data and technology that can be used to power personalization, there’s no longer an excuse for one-size-fits-all group plans that don’t address the highly specific needs of each employee.
We at Zorro are building a platform to change this. Our engine has been trained using significant and diversified data points in order to take multiple parameters into consideration. From employee stipends and overall budget to a range of supplemental benefits that an employee may want to offer (either subsidized or not), Zorro’s platform and recommendation engine is designed to generate what the market has yet to offer: personalized benefits bundles that employers are proud to offer and employees are excited to take advantage of.
We begin by inputting the parameters defined by the employer - the employee healthcare stipend and overall budget, as well as any additional supplemental benefits they wish to include. The most common are dental and vision, but many employers also offer life, accident, or critical illness coverage, as well as FSA and educational expense reimbursements. Once these criteria have been clearly defined, we cross reference this information with each employee’s personal information that is provided to us through our platform during the onboarding process.
We ask employees three important questions that help customize our recommendations for them:
1. What level of healthcare are you likely to need (e.g. how often you’ll see a doctor)?
2. Which providers, facilities and/or medications must be covered by your medical plan?
3. What is your tolerance for risk and how prepared (or unprepared) would you be if you needed to cover a significant, out-of-pocket expense?
In combining all this critical information, we can ensure that the benefit bundles Zorro recommends will be most personalized to meet the employee’s needs and that individuals have a true understanding of the “all in cost” of any given medical plan.
The result is a uniquely customized benefit-bundle that finally brings the same level of sophistication that we are accustomed to in other areas to this part of our lives. Consider our example from above, with our two employees Elena and Don who work at Company X.
Elena, the young, single employee, would pay $200 for her health plan, contribute to an HSA, and allocate an additional $200 in supplemental benefits across the types of coverage that best fit her lifestyle and personal health profile–accident, dental and cancer.
Don, the married employee with two children, is paying $400 for a low-deductible plan with a wide network, $200 for vision and life coverages and an FSA contribution for dependent-care expenses.
This is just one example of how personalization can have a real impact: not just getting employees the benefits they need but also optimizing their tax deduction strategy and making sure all aspects of their healthcare are taken into consideration.
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