Matt Houghton chuckles when people compare his GroupHEALTH offices to the famed employee-centric workplaces of giant technology company Google.

“We want people to come and enjoy being at work,” Houghton, CEO of the benefits solutions company, said in an interview. “We do spend a disproportionate amount of time making sure our facilities are conducive to a great working environment.”

GroupHEALTH is big on work-life balance. For example, its 425 employees across Canada enjoy a “four-day Friday,” giving staff 26 long weekends a year. The company brings in fresh fruit every day and fresh vegetables a few times a week for staff. Each employee has a health wellness spending account. Exercise boot camps that are heavily subsidized are open to the employees along with tamer yoga stretch periods. Other perks include employee lounges, mentorship and subsidies for courses and programs.

GroupHEALTH also decided to set up shop outside the major urban cities like Toronto and Vancouver where downtown office space can command big money. So rather than an office in the centre of Vancouver, its offices are in Surrey and instead of downtown Toronto, the benefits firm has offices in west-end Etobicoke and farther north in Woodbridge and Barrie, Ontario. GroupHEALTH also has offices in Calgary and Edmonton.

A compelling differential

The reason to do business from the suburbs is two-fold: first is cost, acknowledged Houghton. “This is a tough industry. It’s an oligopoly. When you are trying to break into that market where the top five group insurers still have 80-plus per cent of the market, you have to have a really compelling differential.”

Then, when GroupHEALTH began setting up outside the big cities it realized something else: the suburbs where they were locating were also home to many of its employees, a good number of whom had already left the long daily commute behind them to live in a less costly neighbourhood.

Unlike the rest of the industry that is focused on price and expenses, said Houghton, GroupHEALTH is centred on managing costs and claims.

It’s an issue much of the industry has yet to tackle over the last 30 years. “It’s almost staggering when you look at how time has stood still. You’ll still see plans that have $25-single and $50 deductibles on their health and dental. Those were established when $25 or $50 was a day’s wage. I can’t think of any other industry that has had zero progression.”

On average, his 4,500 corporate clients spend $3,700 per employee per year on benefit costs and employers want to make sure they’re getting the biggest bang for their buck.

Most employers now say they can’t afford some benefits and are coming to insurers and benefits solutions specialists like GroupHEALTH to help them make the most of their benefits dollars, he said.

Houghton said many companies are providing benefits that may include life, disability and drug coverage and then moving to health wellness spending accounts for other costs, such as dental, paramedical services, orthotics and chiropractors.

Houghton said GroupHEALTH sets itself apart from many other suppliers with its concentration on unique technology. While some companies are stuck with old or legacy platforms that have constrained them, he said his firm’s emphasis on new technology allows it to be the only one in the country to be able to accept online enrollment and electronic signatures (in the provinces that allow it).

Gained leverage

GroupHEALTH’s platform is a state-of-the-art plug-and-play, allowing people to pick one insurer for their life insurance needs and another for their health needs if they want. “Once we got to around $250 million in premiums, we started developing our own product and it gave us some leverage to doing things differently,” said Houghton.

GroupHealth now has about $600 million in annual premiums and with the help of about 150 brokers across Canada has developed its own products. One is its Original Mid-Term Disability™ plan that segments costs and strips out high fees like setting aside reserves on health and dental costs. Its Managed Rx™ is a tiered drug formulary that encourages the use of lower cost alternatives. 

“We really go where our clients are telling us they’re experiencing problems and frustrations and needs… and we have technology to develop solutions,” said Houghton. “That’s the secret sauce and I think behind all of that, there are incredible people in the organization who really want to deliver a ‘wow’.”

Houghton believes the future of the industry lies in increasing the use of technology. He said GroupHEALTH is looking at creating a personal financial dashboard that would provide the user with the technological ability to move from one service provider to another using only one site and one password to buy everything from life and health insurance to property and casualty insurance.

“I think that’s the future when you look at benefits, it’s something where convenience and simplicity are a big, big deal.”