Addressing 5 Key Benefits Technology Pain Points With Brokers
Technology is changing; it is complex, costly and constantly evolving.
This constant change is impacting all stakeholders: employees, administrators, brokers and technology providers. Technology is changing the way that benefits are bought, sold and managed – and the change is happening fast.
Additionally, employers are concerned with the rising costs of health care while minimizing the costs of benefits administration and compliance.
According to a 2018 BLS report, employer costs for employee compensation averaged $35.87 per hour worked. $11.38 of this accounted for employee benefits (31.7% of the total).
With benefits being the largest component of labor costs outside of wages, workflow automation is critical.
The cost of medical insurance coverage alone for families is $18k per year with employers covering 71% of the cost and employees paying for 29%.
As a broker vetting potential technology solutions for your employee groups, how can you find the right technology to help improve efficiency and lower the cost of administering benefits?
Know The Pain Points
Knowing what questions to ask and what system requirements are most helpful when selecting a benefits technology vendor is crucial to finding the best match for your clients. We’ve identified the top five pain points that HR teams typically encounter when administering benefits and the corresponding system requirements that should be considered when selecting a benefits technology partner.
1.) Managing Costs
HR teams use several methods to incentivize behavior that lowers the cost of providing insurance. But, if they can’t automate these programs it creates a significant management challenge for the (often understaffed) HR team.
Examples of these incentives include spousal surcharges, tobacco surcharges, wellness participation incentives, documentation requirements, defined contribution, etc.
What system features can help organizations manage costs?
- Flexible cost calculations
- Defined contribution
- Documentation management
2.) Lack of Automation
Benefits programs are extremely complex, particularly for life and voluntary benefits. Most benefits administration systems don’t have the configuration flexibility or the ability to automate common tasks and jobs, which requires HR teams to take on manual work, manage some benefits on paper and/or limit the benefits offered.
Examples of manual processes that can be automated include evidence of insurability, age reduction schedules, the percentage of salary covered, dependent age-out, work status change and automated enrollment.
What system requirements can help companies automate processes?
- Workforce populations
- EOI processing
- Work status processing
- Coverage calculations
- Dependency rules
3.) Keeping Systems & Data In Sync
Benefits integration is a big challenge for HR teams and benefits providers. When benefits data is not accurate and synched up with all carriers, that means that employees can’t get the care they need, are waiting at the pharmacy for a prescription, etc.
And, when benefit deductions aren’t correctly updated in payroll, paycheck deductions are incorrect and adjustments must be made.
Benefits data exchange with carriers, TPAs and payroll systems require domain-specific expertise. Best-in-class benefits providers have the experience to handle these integrations.
HCM companies typically struggle with data exchange with insurance carriers and TPAs, but they offer tight integrations between benefits and payroll.
Partner requirements for mitigating data concerns are two-fold:
Benefits provider → out-of-the-box integrations, API for demographic and paycheck deduction data
HCM provider → level of support offered, experience with carrier data exchange
All providers → transparency tools, visibility into data exchange transactions
In addition, employees who don’t understand their benefits are not likely to appreciate them, which means that employers aren’t able to use their benefits as a tool for talent acquisition and retention.
What system functionality can help better educate and support employees?
- Modern employee experience
- Library of educational videos
- Personalized plan coverage recommendations
- Contact center for guided enrollment
- Automated communications and reminders
Learn more about empowering employees to make better benefits decisions.
5.) Inaccurate Bills & Billing Reconciliation
HR teams spend a lot of time trying to reconcile carrier bills and still have low confidence that their bills are correct. And, over-paying carriers is a big problem. It’s fairly common that organizations are paying for people who should no longer be covered – people who left the company months ago.
What system features can mitigate billing woes?
- Automated bill generation
- Self-bills and bill previews
- Carrier-specific wash cycle rules
- Billing groups
HR teams can also fully outsource carrier billing and should seek a partner that offers invoice reconciliation, invoice consolidation, payment simplification, discrepancy resolution.
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Can your current benefits administration platform do that? If not, it might be time to consider upgrading your technology and partnering with a more modern solution.
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