Benefits administration is somewhat a bit of a conundrum. It’s important to provide the right kinds of benefits for your employees, but at the same time, you want the most cost-effective model set in place. You need a competitive benefits package to attract and retain top talent, but this can and will be the number one expenditure for your business. There must be a balance, and this balancing act can be hard to execute with the precision required to keep all parties engaged.
The benefits package offered, in a way, is a representation of the company itself, and how much they want to invest in and value a new internal employee. According to Market Reports World, 64% of companies now outsource at least one HR activity, and that number is scheduled to rise into 2027 and beyond. Larger companies are more likely to adopt benefits administration outsourcing because of the sizes of their workforces, their multiple locations, or the complexity of their benefits programs. However, mid-sized and mid-market organizations consider benefits administration outsourcing because they have a lack of internal resources and expertise.
Your business has specific goals and with specific tactical implementation to meet those goals. While your reasons may vary, here are some common reasons why companies outsource their benefits administration.
Here are 5 Big Advantages of Outsourcing Benefits Administration:
1. Efficiency and Error Reduction
With modernized and automated workflows that outsourced benefits administration teams utilize for compliance comes the natural benefit of efficiency and reduced errors. The systematic approach developed over time adds vital checks and balances as a buffer for natural human error that can still occur.
Beyond the perks of efficient operations, however, are numerous issues that could arise between your organization and your carrier(s). Bill reconciliation is commonly overlooked and represents the greatest area of profit leakage in the entire HR department.
Your plan carrier(s) bills your organization based on your enrollments. When feed files are not set up, managed, or administered appropriately, a gap forms and the carrier invoice does not correctly match your current enrollments. That excess is the profit leakage – and your organization pays for it.
A competent, outsourced benefits administration team keeps open lines of communication with your broker and carrier(s) to automate feed files, track invoices, and confirm enrollments versus what is being billed.
2. Senior Level Compliance Expertise
Regulations surrounding benefits administration evolves rapidly. Updated guidance is published weekly and sometimes daily. It takes the work of a full-time individual to receive, manage, and distribute regulatory updates, and that is before you need to implement that into your current system.
A small regulatory mistake can cost thousands of dollars to repair. If you have employees in multiple states, compliance standards can differ and extra controls are needed to ensure your processes are operating legally.
Specialized outsourced benefits administrators have developed systems over time that efficiently and effectively implement new regulations into the administration process. They are up-to-date on all federal, state, and local laws, and have an intimate understanding of benefit-related legislation like ACA, ERISA, COBRA, HIPAA, and Section 125.
3. Improving Engagements by Removing Administrative Burden
Your time is valuable. Spending a large amount of your time on administrative tasks takes your focus away from strategy forming and plan execution, and these are required not only to build great teams, but to move the business forward.
When you outsource benefits administration, you get a full suite of administrative management. Leaves of absence, qualifying life events, and the most chaotic time of the year, open enrollment, are fully managed for you. Now you can spend the necessary time building and evaluating reports, structuring a recruitment and retention plan, and leading company culture building.
4. Scaling Down Internal Operations and Finding Cost Savings
The benefits plan you choose is already going to be a major expenditure, and healthcare cost inflation only promises to increase this price tag every year. Finding ways to cut or control costs in one of the biggest spending areas becomes a problem for the entire c-suite.
Cutting plan options is limited, but there are some savings to be found in the administration. By partnering with an outsourced team, you give yourself the option to scale down internal operations, and not just by headcount. Because the outsourced partner is going to handle HCM technology, bill reconciliation, and compliance, you no longer need to worry about financing specialized software tools or paying for licenses that aid in getting the job done.
Existing staff on your internal HR team can now be redirected towards other areas of the operations that desperately need attention. This greatly enhances your ability to meet your goals while providing cost savings to the entire organization.
5. HCM Technology Management and Employee Touchpoints
Before open enrollment each year, new and existing plan features need to be entered into the HCM system. This allows for plan tracking, employee self-service elections, and ongoing record collection. Proper administration takes a lot of leg work, and that is before open enrollment even begins.
Full-service HR outsourcing firms offer HCM management on top of benefits administration. Not only do they provide this leg work, but they also offer dedicated customer service teams who work with your employees year-round. These teams become vital during open enrollment and are always available to answer questions. Many firms implement AI-based solutions like chatbots to deliver a more automated workflow to provide 24/7 availability.
While this comprehensive list shows the advantages of outsourcing your benefits administration, there are some risks associated with outsourcing HR services of any type. It is important to understand your full tray of options before making a move.
Outsource Benefits Administration to the Professionals at Corban OneSource
Navigating your company’s benefits package is a challenge with compressing forces on either end. On one side, you must provide the plan options that allow you to recruit and retain top talent. On the other, you must protect the interests of your organization’s bottom line.
Fortunately, there is a silver lining. While the pressure of the decision-making is on your shoulders, the administration of your benefits program does not have to be. When you partner with an experienced HRO like Corban OneSource, you get the senior-level administrative expertise, compliance-ready framework, HCM management, and white-glove customer service experience for you and your employees.
Our benefits administrators work with the broker of your choosing, so you get to stay in the driver’s seat for plan selections. We keep open communication with your broker and carrier(s) throughout the year, aiming to build the foundation and provide ongoing stability in your benefits operations. The staff in our US-based HEROES team are readily available to assist your employees with open enrollment and help with any questions they have along the way. Our human-centric team provides a personalized touch while avoiding clunky AI communication or offshoring. See how Corban OneSource can make the difference when you outsource benefits administration.
FAQ
Companies outsource benefits administration so they can provide efficiency and error free execution, like proper bill reconciliation, get senior level compliance expertise, remove administrative burden that takes time away from strategy and vision-building, lower costs in one of the biggest expenditures in the HR department, and have a partner who will manage open enrollment, among other reasons.
Bill reconciliation is monitoring your plan carrier’s invoice versus your employees’ enrollments. After your employees make their benefits elections, that needs reported back to your plan carriers so they know what to bill you. In many cases, employment changes over the years, and the net negative often gets overlooked. This means that the carrier is overcharging you because there are more employees on their records than in yours.
Yes. When you outsource benefits administration, you also outsource technology management. This means that software licenses, integration, and training no longer needs to be administered internally.
Corban OneSource completely manages open enrollment for clients that outsource benefits administration to us. This includes working with your broker to communicate new plan options and updates, building self-service modules in your HCM, setting up carrier feed files and monitoring bill reconciliation, and answering questions your employees have throughout the process.
No. We believe in the power of the human touch and offer US-based, human-centric teams to help answer any all questions your employees may have.
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