For HR managers, who dedicate an estimated 25 to 30 percent of their time to managing employee benefits, a delicate balance exists between protecting their organizations’ bottom line and maintaining employee satisfaction. To achieve both, they are challenged to:
• Reduce the time and resources devoted to employee benefits programs.
• Ensure that their organizations don't incur avoidable charges and costs from legal exposure, carrier premiums and liabilities.
• Improve their employees’ experiences with their benefits programs.
Partnering with a third-party benefits administration provider can help HR departments to achieve these goals. Through negotiated contracts, volume buying and economies of scale, providers can deliver program advantages that many individual HR professionals could not secure working on their own. They can even turn to their provider to manage the most challenging part of benefits administration, the annual enrollment process.
Role of a Benefits Partner
The words “employee benefits annual enrollment” can strike fear in the hearts of HR managers. Not only is the process time-intensive, it’s high-profile and hands-on. And it carries the stress of cementing employees’ perceptions of their benefits program and the overall capabilities of their HR department.
Benefits administration providers can provide support beyond tactical responsibilities. With the proper resources, they can serve as advisors, leveraging their relationships with carriers to simplify processes and reduce costs. They can evaluate an organization’s benefits program to recommend and, ultimately, execute better solutions.
Below are some key services a comprehensive benefits administration provider can provide.
Call center support services. Even with good software and a painstaking, well-executed communications program, employees will have questions and issues that require personal attention. An outsourced, full-service call center provides employees with immediate access to information and answers from a live human being, which is often all it takes to allay concerns.
Like the enrollment process, employees’ call center experiences impact their feelings about their benefits program and their employer as a whole. HR professionals can improve the odds that employees will have a positive experience by selecting a call center partner with at least an 80 percent success rate for first-call resolution, an industry standard.
Improve the odds that employees will have a positive experience
by selecting a call center partner with at least an 80 percent success rate for first-call resolution, an industry standard.
Eligibility management and audits. New hires, eligibility changes and shortcomings in employee enrollment methods can cause carrier discrepancies that can take substantial staff hours to resolve. Worse yet, these problems can increase costs for employers.
Eligibility audits catch overpaid premiums and unqualified enrollees, giving organizations an immediate return on investment. Used on a continuing basis, audits can limit legal risks and exposure to liabilities consistently. Employers can leverage reverse eligibility audits to confirm the integrity of enrollment data and increase accuracy among their employee pool and premiums.
Improved carrier oversight. By outsourcing the full, day-to-day eligibility management process, HR departments can avoid dealing with errors and warning reports from carriers. A third-party benefits administration provider can work directly with a carrier to improve the accuracy of an organization’s total payments, reducing the chances of overpaying. Auditing to verify billing is another way to save time and improve accuracy. Understanding and reconciling carrier premium statements can be a full-time job, but this function can also be outsourced.
Compliance. Establishing a section 125 "cafeteria" plan has many advantages, but it adds complexity. For instance, flexible spending accounts (FSAs) allow employees to put funds exempt from federal income tax toward health care costs and can lead to substantial savings for organizations, including reduced Social Security contributions and lower workers’ compensation premiums (in certain states). But employers must stay in line with strict government regulations.
COBRA compliance poses another challenge for organizations. Estimates reveal that 90 percent of employers fall short of COBRA compliance, which can lead to significant IRS fines and additional costs to correct problems and verify conformity. Outsourcing FSA and COBRA programs to experts protects organizations from regulatory penalties and helps achieve maximum savings.
Rob Popolizio is the benefits administration practice leader for Trion, a provider of benefits administration services. With more than 300 associates and eight offices nationally, Trion specializes in health and welfare plans, large-employer disability and life programs, benefits administration, integrated health and productivity management, and voluntary benefits.