The steady stream of new regulations shaping the health benefits industry is a double-edged sword. While regulatory changes and adjustments often prove beneficial for consumers and can serve as protections for both organizations and individuals, they almost always have a complicating effect on administrators.
For many employers, outsourcing benefits administration to a benefits administration service provider is an appealing alternative to investing significant resources toward maintaining in-house.
Handling benefits administration in-house can offer many advantages. Employee communication channels are already established, there is often an existing working relationship in place, taking care of changes is relatively easy, and there are fewer variables for HR representatives to keep an eye on.
On the other hand, keeping benefits administration in-house can demand more from the employer as time goes on. Not only must the skills, expertise, and resources be adequate to meet today’s industry and regulatory environment; resources must be allocated to ensure training, education and technology is updated and enhanced on a regular basis.
To determine the right benefits administration solutions for your organization’s needs, Tara Morey, Senior Consultant at Findley Davies and one of our upcoming Annual Conference speakers, explains it’s important to understand the three different categories and origins of expertise that benefits administration providers fit into: Technology Providers, Consulting Providers, and Outsourcing Service Providers.
Technology Providers start out providing enrollment and eligibility platforms and their expertise remains in technology. Additional services may be provided via third party or they may choose only to provide technology platforms.
Consulting Providers typically start out advising clients in plan design and then assist in selecting medical plans and carriers. Through the years, they’ve developed/acquired technology solutions to manage enrollment and provide administration services.
Outsourcing Service Providers start as service providers and work as an extension of your Benefits department, providing call center support, claim adjudication, and administrative task management. Over time, they’ve developed technology solutions to facilitate outsourcing services and may provide consulting.
Outsourcing benefits administration is becoming increasingly popular among employers of all sizes. The specialized expertise an outsourced firm carries can help minimize the threat of costly errors leading to legal repercussions, fines, or penalties, which underlies even the most diligent of in-house benefits operations.
Employers that decide to outsource their benefits administration should take extra care in ensuring that employees are still receiving a personalized experience. Even if a vendor is taking on the bulk of the administrative workload, employees should have an on-staff subject matter expert to act as a guide for complex decisions, an advocate for sensitive issues, and a reliable resource for when immediate concerns arise.
So how do you decide the best course of action and whether a provider/vendor can best meet the unique needs of your organization’s benefits administration?
Step 1: Determine your main driver—i.e. Managing costs? Becoming compliant with new legislation? Competitive pricing? Expanding services for employees? Enhanced technologies?
Step 2: Understand your choices and begin with vendors whose origin of expertise indicates where their strengths lie—research potential providers to get to the root of their offerings.
Step 3: Consider a variety of technologies and solutions to compare—there are many providers in the marketplace who offer an array of services to match your organization’s unique “wish list.”
And remember: It’s vital to remain focused on the fact that the goal of a strong benefits program should go beyond cost savings or compliance. Most importantly, it should meet the needs of your employees.