Benefit administration systems put information at employees’ fingertips while freeing up HR staff to focus on strategic issues such as employee engagement and retention.
“Everything related to employee benefits and an employee’s life cycle can be stored in a technology solution and then used by both the employee and the HR department,” says Meghann Guentensberger, Director of HR Services at Benefitdecisions, Inc. “Medical, dental, vision, and even ancillary benefits like transportation and flex are all in one system that’s accessible to everyone.”
Smart Business spoke with Guentensberger about the advantages of automation using an online benefit administration tool and how to choose a system that fits your needs.
What can a such a tool do?
It automates the administration process through an employee’s life cycle from onboarding to termination. The system also handles annual benefits enrollments and life event changes. When someone gets married or has a baby, they can make health care enrollment changes through the system rather than filling out a 20-page application with an HR person.
The system can also be electronically connected to the insurance carriers, feeding information directly to them in real time. This ensures timely and accurate enrollments and terminations while also facilitating the billing reconciliation process, ensuring you’re not paying for someone inadvertently left on an insurance plan. Between savings generated from efficiency of staff and error reduction, a benefit administration system can save more than $19 per employee per month.
In addition to employee benefit information, many of the tools have Human Resources Information System components and can track compensation history, paid time off and leaves of absence. Skills and past performance history can also be tracked for succession planning purposes, which facilitates resource allocation. The tools empower employees to update their electronic personnel files and promote their skills by updating certifications, education or training.
How do you choose the right solution?
There are five advantages of a benefit administration system that should be considered when selecting the appropriate system: cost savings, productivity enhancements, increased communication, facilitation of employee retention and recruitment, and the ability to eliminate paper transactions.
But first, take a step back and document current processes so you know what you’re paying for your system and in HR time. This will help build perspective around the hard and soft costs of what you’re doing now versus what you could be doing. Then list what features and functions you want, so you can evaluate providers and do a direct comparison.
It’s also important to think about the solution globally rather than getting carried away by the presentation of a tool that takes current pain away. Develop a plan for where you’re going and how it fits in. Often, the tools provide scalable solutions that will allow you to add features as time goes on.
Adding a benefit administration system doesn’t mean you have to revamp everything. These tools interface with existing systems such as payroll, so you don’t have to overhaul what you have.
Have an independent third party ask questions and go through the process of how it will be used. When a vendor does a demonstration everything looks amazing, but you’re only seeing what they’re showing. A neutral third party can provide an unbiased perspective.
Who needs a benefit administration system?
Any company big or small — the complexity of the system is dependent on the company’s size and needs. With health care reform, it will be more difficult to remain compliant using paper, both because regulations change so quickly and the required reporting. This system allows you to analyze your population and compute costs to ‘pay or play.’ You can pull the data and run models to make a decision that makes the most business sense.
For smaller companies without an HR department or just one HR person, this tool can really help them be more effective and efficient instead of being transactional.
Meghann Guentensberger is Director of HR Services at Benefitdecisions, Inc. Reach her at (312) 376-0449 or email@example.com.
Insights Employee Benefits is brought to you by Benefitdecisions, Inc.