By: Michael Lujan @mdlujan | Limelight Health Chief Strategy Officer and Co-Founder
It’s easy to dislike Zenefits. Not because they introduced a “disruptive” technology for the benefits and hr industries. Easy because Zenefits took huge shortcuts and made compliance violations, unprecedented in our heavily-regulated insurance industry. And, made unflattering comments about the traditional benefits agents and brokers they promised to displace. Their abrasive entrance to a broker community, already embroiled in changes brought-on by the ACA, made Zenefits an easy foe for many brokers. Many brokers watched closely to see if their threat was real and later, celebrated their missteps as vindication for “real brokers”.
But these caustic comments, the anti-broker rhetoric and compliance violations were under Parker Conrad’s leadership and he’s no longer with Zenefits and has no board position or influence. Zenefits’ new CEO, David Sacks has the challenging role of undoing the damage to their brand, reputation and restoring their standing with the state regulators. His approach? Admit, fix, settle, repeat. That was the theme of our interview yesterday at SVAHU, the Silicon Valley chapter of NAHU. He touted their self-reporting of their violations and self-remediation to regulators which lead to some state regulators to impose only minor fines (Kentucky $62,500) or none at all (Delaware). California regulators are still conducting their investigation and not yet resolved.
The interview was interesting (but I am biased) and shared some new insight about the past, present and future of Zenefits. David Sacks is a very different leader and expressed none of Conrad’s caustic opinions of traditional agents and was very accepting of the changed benefits technology landscape. If, in fact, this is an innovation and technology war, there are many “arms dealers” ready to provide tech solutions (weapons) for traditional agents.
Not mentioned in our interview by name, but companies like EaseCentral, Flock, Employee Navigator, Bernie Portal, BenefitExpress, Zywave, OnCore HCM, BenePay Tech, Insynctive, PlanSource, Paylocity, PrimePay, (the list goes on) all provide competing solutions for traditional agents; each with their own unique value proposition and features. Although he did not make the audacious statements about his traditional broker-competitors, Sacks did express regret and said the company might have been more successful if they did not take on traditional brokers and instead partnered with them.
Possibly, a hint that a new broker-partner strategy is being announced on Oct 18th at their “Z2 launch” at Dreamforce in SF?
Sacks also got a laugh by declaring he is “lactose intolerant and won’t be drinking anyone else’s milkshakes”, a reference to Parker Conrad’s quote atTechCrunch Disrupt NY in 2013.
While it hardly matters now, Parker Conrad did explain his milkshake comment was made when Zenefits was a pre-funded, early-stage startup with only three employees and pitching to potential investors. He said he would have said it differently but never retracted his claims to do “tens times what traditional brokers do for their clients”.
While some brokers may not get why an interview with Sacks matters, the purpose was to give an update on what’s happening and how the reinvented Zenefits (or Z2) could continue to impact the benefits industry. The Silicon Valley chapter of NAHU invited Sacks to speak so we could better understand the status of pending regulatory investigations, the real story around their stumble and embarassing scandals and maybe most important, what’s next. I think it’s time for agents to turn the page from their adolescent growing-pains and pay attention to the reinvented company and the bigger picture. Will he turn the company around? Time will tell. I will post the full one-hour interview here and on www.svahu.org.
Limelight Health was proud to sponsor the event AV so we can share the recording with other NAHU chapters and benefits/hr professionals. Feedback welcomed.
About Michael Lujan
Michael Lujan is Co-Founder and Chief Strategy Officer for Limelight Health, a San Francisco-based start-up with funding from AXA Strategic Ventures, Mass Mutual Ventures and Launchpad Digital Health. Limelight is a quoting technology platform for health insurance agents, carriers, general agents and private exchanges. Called QuotePad, the SaaS-based technology offers small business benefits quoting with integration with benefits administration and other agency tools.
Michael is Immediate Past President of CAHU (CA Association of Health Underwriters) and current board member of the Silicon Valley chapter. In 2012, Michael helped establish the California Health Benefit Exchange, now known as Covered California. A former agent, general agent and Director of Sales for Blue Shield of California, Michael is an outspoken advocate for the agent distribution channel, small business and the uninsured. Learn more at www.limelighthealth.com