With heightened compliance requirements, automation may be a game changer, but steep costs stifle decisions.
COLUMBUS, OH – Although automation can streamline workflows and ease administrative burdens under the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act, human resources executives remain stifled by fears of choosing the wrong technology.
A new report from Assurex Global, the world’s largest privately held commercial insurance, risk management and employee benefits brokerage group, reviews the key capabilities and limitations of benefits administration systems and outlines steps for making informed purchase decisions.
“There’s no question new benefits administration systems can dramatically improve the performance of human resources departments,” said John Clark, senior vice president at Assurex Global. “Yet, technology is evolving; there’s uncertainty over the future of health care and related benefits, and the cost of making a mistake in a tech investment can be a career breaker.”
He added that even though the cloud and competition are generally helping to drive down technology costs, full implementation of larger systems can take up to a year.
“And when you factor in the related time involved in staff training, you can see how these systems require substantial investments for any firm,” Clark said.
Nonetheless, the report asserts that the upsides can range from “better automation capabilities” to “a complete transformation from an old paper-based system.”
The ACA’s passage in 2010 brought additional reporting, disclosure, and notification requirements. The elevated workload, administrative costs, and compliance risk for human resources added to their already complex reporting, disclosure, and fiduciary requirements for ERISA. Meanwhile, there is no sign of benefits administration becoming less complex.
A new frontier. Unfortunately, many HR professionals are unfamiliar with the types of benefits administration systems currently available today and may not be in position to make the best choices for their needs. While some can use benefits administration functions in their payroll system or human capital management (HCM) platform, they lack the ability to automate critical functions.
According to the Assurex Global report, HCM systems, which encompass the entire employee lifecycle – from recruiting to onboarding, employee records, benefits administration, talent management, and more – streamline workflow and eliminate redundant data entry. Yet, they aren’t as effective at managing employee benefits administration, leaving employers with manual processes and spreadsheets to accomplish many of these tasks.
By comparison, standalone systems can automate many administrative functions not addressed by HCM solutions, such as health care insurance premium billing and reconciliation, integration of defined contributions in employee health care plans, facilitation of voluntary coverages, and providing decision support for employees with their benefits options, among other features.
However, many of these systems cannot be integrated with other areas of human resources management and lack specific tools for time and attendance tracking or talent management.
“When it comes to benefits administration systems, there’s clearly no one-size-fits-all solution,” said Liz Patton, vice president of employee benefits for Cobbs Allen, an Assurex Global broker. “Nonetheless, if they haven’t done so already, human resources executives need to explore their options carefully and begin the process of selecting a system. The starting point is to document all the administrative functions currently being performed manually and then examine how the various systems will address them to help save time and money.
“As with any technology, a key consideration is to thoroughly investigate the support each provider offers to help expedite their system’s implementation as well as the level of ongoing service available to individual users once the system is up and running,” Patton continued.
For a complimentary copy of the Assurex Global report, How the wrong benefits administration system can hinder efficiency and put your organization at risk, visit the Assurex Global website at: https://www.assurexglobal.com/how-the-wrong-benefits-administration-system-can-hinder-efficiency-and-put-your-organization-at-risk-and-what-to-do-about-it/
About Assurex Global
Assurex Global is the world’s largest privately-held commercial insurance, risk management and employee benefits brokerage group. The company operates as an exclusive partnership, supported by more than 100 of the world’s most respected and successful insurance brokers.