Looking Beyond the Surface of Benefits: The Hidden World of Spending Accounts
Every year, the Sanofi/Benefits Canada survey sparks excitement in the benefits industry, a feeling that I vividly recall from my early career days. For many professionals, dissecting every section of the survey was a ritual, and it was a critical part of preparing for Certified Employee Group Benefits Specialist (CEBS) Fellowship exams. That anticipation is still very much alive, although today, I find myself with a different perspective, and I believe it's time to share it.
I want to be crystal clear: the publishers of the survey conduct their research with the utmost professionalism. The insights they offer on the broader benefits industry, primarily centered around insured plans, are invaluable. However, as we've grown and evolved at myHSA, we've started to question the scope of this survey, particularly when it comes to spending accounts. We've noticed a gap, and we suspect it may have been overlooked.
A Deeper Dive into Spending Accounts
As we zeroed in on spending accounts, we began to witness opinions and perceptions of these accounts that we felt were underrepresented in the Sanofi/Benefits Canada survey. It's no secret that insurance carriers tend to steer clear of the spending account space, and it's not hard to see why. After all, promoting this model can challenge their lucrative business of selling insured products, which offers higher profit margins. Moreover, they are typically transaction-heavy, making the revenue as a percentage of each claim (current model), isn't as attractive as collecting premiums or offering Software as a Service (SAAS).
However, they do offer spending accounts to some extent, and thus, they do possess data and report on them. But the question remains: is how they think and offer them an accurate reflection of how they're positioned in the real world? For instance, as far as I know, you can't implement a core spending account style for a plan unless you're large enough for Administrative Services Only (ASO) arrangements. Another limitation insurers have is combining different spending accounts into a flex plan like we provide. At myHSA, our myFlexplan is the fastest-growing plan style of all types, and this is just one of the many factors we believe might be overlooked when relying solely on insurer data. The Sanofi/Benefits Canada survey, while comprehensive, primarily captures the traditional plan style, leaving room for valuable, non-traditional approaches to be excluded.
The Data Gap
One of the significant challenges we face in the benefits industry, especially in the spending accounts space, is the lack of aggregate data collection and sharing. No one is knocking on our door, or the doors of other providers, asking for our data to gain insights into what we're doing and seeing. Each carrier or provider sits on its own small trove of data. So, when we see statistics suggesting that spending accounts are on the decline, our first thought is, "Maybe for you they are, but we're witnessing a surge."
Rather than merely lamenting the fact that we're smaller players, we've decided to take a more proactive stance. We've decided to generate our own survey and share the findings from our data. While it may not match the scale of the Sanofi/Benefits Canada survey, it's backed by our own unique data. The beauty of growth is that our data will become increasingly valuable over the years, and we've reached a size where we can provide insights and clues from our unique perspective.
Seeing Beyond the Survey
The main takeaway from this discussion is that when we dive into surveys like the Sanofi/Benefits Canada report, we must be cautious not to assume that nothing new is happening in the benefits industry. It's essential to examine sample sizes and methodologies with a discerning eye, ensuring we're reading through the right lenses.
While the industry might not change significantly year after year according to these surveys, the information will largely stem from the big players. It might miss the stories of those on the fringes who are bootstrapped but gaining decent market share. These underdogs might not have the massive advertising and PR budgets of insurers or well-funded "disrupters," but they are steadily building success. In the real world, advisors know this because they're fueling our growth, but others may need to look a bit further to discover what's happening.
The Sanofi/Benefits Canada survey remains a valuable source of information in the benefits industry; however, it's essential to consider its limitations and biases.
We're excited to announce that we'll be producing our survey and sharing our data in the very near future. We aim to shed light on the spending account world from a different angle. While our scale might be smaller, our data holds the potential to provide valuable insights into the dynamic landscape of benefits. Stay tuned for a fresh perspective on the world of spending accounts. Who knows, maybe our insights will catch the attention of future surveys, and we can contribute to the evolving narrative of benefits in the years to come.
COO & Co-Founder