I suggest taking a look at the soft costs associated with the administration of the benefit plans as a strategy to mitigate this expense. Depending on the size and complexity of your organization and benefits offerings, up to 25% of your total spend could be tied up in the transactional costs of benefits administration. This warrants considering process improvement or retooling as a means to controlling this cost. Regardless of the size of an organization, deployment of the right technology will dramatically improve open and continuous benefits enrollment by reducing errors, speeding up the enrollment process, and increasing employee education and satisfaction around the health plans offered. Organizations of all sizes report the benefits of automated enrollment to come in the form of: Time Savings, Increased Productivity, Improved Data Integrity, Greater Employee Satisfaction.

An enrollment system will automate manual or redundant, paper-based processes, engage employees with self-service tools, and enable employers to access benefit participation patterns. Several methods for automating the benefits administration function are available to even the small market. I suggest exploring each and discussing options with your benefits consultant or an outside HR Consultant to determine what works best for your organization.

Issues to Consider When Automating Benefits Administration

1. Deployment of Employee Self-Service – The technology application that you choose must have a self-service functionality that is easy to use, includes workflow capabilities, and is accessible via the internet. If you properly train employees on how to use the benefits enrollment portal thoroughly most employees will complete it successfully the first time. Studies also suggest that more than half will do it at home with a spouse, thus making them more productive at work. Data accuracy is also improved when enrollment info is entered at the employee level as opposed to the administrator level. The more participants that have access the better. The use of kiosks should also be considered for those employees who may not have the internet readily available. Expanded reporting and survey capabilities also give added bonuses to employers who successfully deploy ESS.
2. Technology Integration – A stand alone benefits administration portal gets you halfway there but to truly maximize efficiencies, I suggest a fully integrated payroll/HRIS/Benefits application. Payroll data tends to be the most accurate data set in any organization, so it makes sense to build benefits technology off this data to ensure utmost accuracy for employee contact information, eligibility, premium deductions, and termination. Many systems also include interface capability to the insurance carriers. This type of integration allows for ONE point of entry for all payroll, HR, and benefits related information. This created a more efficient, less error prone process. Integration eliminates profit leaks with terminations and eligibility because all employee data is resident in a common place that connects with the carrier.
3. Expense – Who should be responsible for this cost? In many cases there are three different parties involved with the process: the insurance carrier, the insurance broker, and the technology provider. You as the employer are clients of all three. I suggest putting them in touch with each other to see what makes the most financial sense for your organization. Many times brokers will absorb this cost as a value added service. The carrier may be willing to cut you a deal to retain or attract your business. Thirdly, the technology provider may have extensive experience with your carrier and may be willing to reduce this cost because less work has to be done on the front end. At the end of the day, it is worth the financial investment and time up front to create the carrier feeds and maintain connectivity especially if you plan to stay with that provider for several years.

1. Open Enrollment is an employer’s opportunity to highlight their benefits program each year. An employer’s Benefits Broker/Consultant can facilitate this process by holding open enrollment meetings, webinars, and developing user-friendly communication pieces highlighting the benefit programs.
2. Highlight benefits in employee newsletters and offer “lunch and learns” to provide constant communication with employees.
3. Develop and maintain a benefits portal within the corporate Intranet or HRIS, providing a resource where employees can access up-to-date information regarding their benefit programs.
4. Implement an online enrollment benefits management system whereby employees can: a) Access their account and view/update their benefits enrollment information. b) Hyperlink to carrier and vendor websites in order to view physicians and claims. c) View list of FAQs to help employees understand how to best utilize their benefits, i.e. how to access a doctor and/or obtain a referral.
5. Provide new hire orientation meetings for all newly eligible employees.
6. Train your Human Resources team to ensure they can clearly communicate the value of the entire benefits package to your employees.
7. Hold a Health Fair every couple of years. A health fair provides a venue for employees to interact directly with the carriers and vendors. It is a non-threatening environment for employees to obtain information about health & wellness, prevention, and additional resources available through their health plans.

Both employees and employers can feel the negative effects of insufficient communication and marketing of employment benefits. Employers can face difficulty with respect to employee recruitment and retention. Employees, in turn may suffer from poor morale if they feel their company undervalues them, contributing to a negative work environment. Conversely, when a company shows it cares about its employees, both parties can greatly benefit from the advantages of open communications and a well-informed, strongly motivated staff. Proper marketing of the benefit plan is critical to communicating the real value to the employees. If done properly, the employer will reap increased overall employee satisfaction.

Selecting the right health insurance broker is crucial to an organization’s overall strategy for managing employee benefits. This decision is even more critical when a company has decided to leave a PEO and now seeks direct representation within the health insurance carrier marketplace. Finding the right expert to represent your company is more difficult than normal because the consultant must fully understand the underwriting implications imposed by the carriers. Coming from a PEO, the employer bears no loss ratio or any claims history from the prior benefit plan. This creates an unknown or risky scenario for the insurance underwriter. This broker or consultant should know how to negotiate around this by presenting the most favorable explanation as to why the employer has been insured through a co-employment arrangement.

Use these 10 questions as a basis for making an educated broker selection when coming out of a PEO, or anytime you think you might want to change brokers or challenge your current broker’s capabilities.

1. Does your firm provide access to virtually all insurance carrier and administration markets?
2. What value added services do you offer beyond your firm’s internal expertise? Examples would be national affiliations, ERISA Attorney, Medical Director, and Pharmacy Consultant.
3. What type of customized strategic planning services and methods for controlling healthcare costs do you offer your clients?
4. Are your services delivered through a team of specialized experts or one main contact?
5. What type of technology resources do you utilize to manage benefits administration?
6. How are you compensated, and will you offer full disclosure of commissions earned? Is this a percentage of the insurance premium or a flat fee? Is this negotiable?
7. What type of actuarial or data analysis techniques do you use to manage and predict plan costs?
8. How do you ensure that your clients are kept in compliance, and what resources are available to your clients directly? An example would be filing of the form 5500.
9. Do you provide ongoing employee support for benefit related issues/questions beyond enrollment?
10. What type of custom communication materials are made available to your clients’ employees?

These questions are a basis for matching the firm’s expertise and approach to the goals that your organization has for managing healthcare. Even if you only have 100 employees, you are large enough to demand top shelf expertise and guidance from this strategic business relationship. There are far too many brokers that do the minimum required work for their clients and get paid well for doing it. Without knowing the right questions to ask, you may be leaving valuable dollars on the table. Additionally, you and your employees may be paying higher premiums because of a poorly managed strategy.

Value added services allow a brokerage firm to differentiate from their competitors and create the opportunity for their clients to maximize their total healthcare spend.  Simply having a personal or long term “relationship” with a broker is no longer enough. Employers must view this relationship as a strategic business partner.

If your organization decides that you will put a Wellness plan in place, the first thing you should do is
conduct an inventory of the current health of your employees. This can be done by having your
employees complete personal health assessments. There are benefits to both you and the employee
for having this done.
BENEFIT #1 Personal Health Assessments provide employees with a snapshot of their current health

BENEFIT #2 Personal Health Assessments bring with them the potential to monitor individual health
status over time.

BENEFIT #3 Personal Health Assessments provide employees with concrete information thus
preparing them for lifestyle change.

BENEFIT #4 Personal Health Assessments help individuals get involved with health coaching.

BENEFIT #5 Personal Health Assessments provide important information concerning employees’
readiness to change.

BENEFIT #6 Personal Health Assessments help employers measure and monitor population health

BENEFIT #7 Personal Health Assessments provide employers with important information that can help
them build results-oriented health promotion programs.

BENEFIT #8 Personal Health Assessments can provide employers with important information on

BENEFIT #9 Personal Health Assessments allow employers to evaluate changes in health behavior
and health risks over time.

BENEFIT #10 Personal Health Assessments engage both employers and employees in the health
management process.

It is important to educate employees on the tax benefits of various health savings tools that can supplement these High Deductible Health Plans. It is also important for the employer to understand the tax benefits with offering these plans and the advantages of funding them.

We have provided a chart that compares the technical implications of Health Saving Accounts, Health Reimbursement Accounts, and Healthcare FSA Accounts. See chart below:

Are you wondering if you really need to offer health insurance to your employees? Are you thinking that many small businesses do not offer any health insurance and the government doesn’t require it so it is really worth it?

If you answered yes to any of these questions, you are not alone. However, it is beneficial to both you and your employees to have small business health insurance.

Here’s why:
1. You want to make your employees happy. You value the people that work for you each day and want to offer them affordable health insurance as a reward.
2. You want to hire and keep the best employees. The fact that a company offers health insurance may be a make it or break it factor when a new employee is choosing between possible jobs or a current employee is deciding whether to stay at a job or look for a new one.
3. Tax deductions. Did you know that 100% of insurance premiums are a business tax deduction?
4. Increased productivity and decrease in absenteeism. Employees that know they will be covered if anything should happen to them are more likely to attend work every day and work to
their potential. This may occur because preventative care measures are being taken by employees who have health insurance, thus avoiding potentially more serious health problems.
5. Pre-tax premium contributions. When employees access group health insurance through an employer, their share of the premium is taken out of their paycheck before taxes are taken out.
This is more beneficial to an individual than paying with after-tax money, which is what they do if they have to purchase individual health insurance on their own.
6. Cheaper group rates. Group rate health insurance can be much less expensive than individual health insurance. Plan coverage can also be much more comprehensive.
7. HAS’s. Health Savings Accounts offer a flexible way for business owners to offer health insurance while keeping their costs at a minimum.
Take another look at your company and your employees. Decide what your specific needs are and find a plan that fits those needs. Insurance companies offer plans for small businesses as small as 2
individuals and as large as 50 employees. Whatever your reason is for looking into health insurance for your company, contact a trusted advisor in this area to learn more.

Most employees have a general understanding of the healthcare but are not well versed in specifics such as the cost to the employer. It is shocking when they learn that their employers spend 20% to 40%of the employees’ wages on benefits. Issues such as cost sharing and consumer-driven health plans add to the confusion. While recent studies indicate healthcare premium trends are finally on the decline, employees are still experiencing increased co-pays, deductibles and premium contributions.

There are several ways employers can most effectively communicate employment benefits:
1. Open Enrollment is an employer’s opportunity to highlight their benefits program each year. An employer’s Benefits Broker/Consultant can facilitate this process by holding open enrollment
meetings, webinars, and developing user-friendly communication pieces highlighting the benefit programs.
2. Highlight benefits in employee newsletters and offer “lunch and learns” to provide constant communication with employees.
3. Develop and maintain a benefits portal within the corporate Intranet or HRIS, providing a resource where employees can access up-to-date information regarding their benefit programs.
4. Implement an online enrollment benefits management system whereby employees can:

a) Access their account and view/update their benefits enrollment information.

b) Hyperlink to carrier and vendor websites in order to view physicians and claims.

c) View list of FAQs to help employees understand how to best utilize their benefits, i.e. how to access a doctor and/or obtain a referral.

5. Provide new hire orientation meetings for all newly eligible employees.
6. Train your Human Resources team to ensure they can clearly communicate the value of the entire benefits package to your employees.
7. Hold a Health Fair every couple of years. A health fair provides a venue for employees to interact directly with the carriers and vendors. It is a non-threatening environment for employees to obtain
information about health & wellness, prevention, and additional resources available through their health plans.

Both employees and employers can feel the negative effects of insufficient communication and marketing of employment benefits. Employers can face difficulty with respect to employee recruitment and retention. Employees, in turn may suffer from poor morale if they feel their company undervalues them, contributing to a negative work environment. Conversely, when a company shows it cares about its employees, both parties can greatly benefit from the advantages of open communications and a well-informed, strongly motivated staff. Proper marketing of the benefit plan is critical to communicating the real value to the employees. If done properly, the employer will reap increased overall employee satisfaction.

1. The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a one-size-fits-all insurance policy.
2. The employer is not subject to state health insurance premium taxes or carrier margin which are generally 4% to 6% of premium
3.  The employer only pays for administration cost and actual claims, thereby providing for improved cash flow.
4. The employer maintains control over the health plan reserves, enabling maximization of interest income – income that would otherwise be generated by an insurance carrier through the investment of premium dollars.
5. The employer is not subject to conflicting state health insurance regulations and benefit mandates, as self-insured health plans are regulated under federal law.
6. The employer will have access to more information, such as claims data, that is relevant to managing the plan. This is key for employers as wellness programs continue to become more prevalent.

Also, consider these potential risks when looking at this funding option.

1. Depending on company size, there may be limited markets of carriers for administration and stop loss coverage.
2. Self-insured plans have a greater degree of HIPAA compliance requirements than those of fully insured plans.
3. The employer assumes the risk between the expected claim level and the Stop Loss coverage. However, there are ways to minimize potential volatility from month to month.
4. Claim fluctuation. Monthly claim costs can vary, verses fixed monthly premiums on a fully insured case.
If you are considering making a funding change, I suggest learning more from your benefits consultant to see what makes most sense for your organization. I urge the smaller employers to explore this option carefully because you may be surprised at the results.

Who is a Fiduciary under ERISA?

The plan sponsor (which is usually the employer) and any trustees are fiduciaries. Additionally, many business owners use employee “committees” comprised of non-trustee employees who conduct an oversight function with the ability to select a new provider or investment menu. These committee members are considered fiduciaries. ERISA defines a fiduciary as anyone who:
1. Exercised discretionary authority or control over the management/disposition of plan assets
2. Renders investment advice for a fee
3. Has discretionary authority in the administration of the plan
What are the Duties of a Fiduciary?
1. The fiduciary must act solely in the best interest of plan participants and their beneficiaries.
2. The fiduciary must act for the exclusive purpose of providing benefits to the participants.
3. The fiduciary must use the care, skill, prudence and diligence under circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use. This is called the “Prudent Expert” standard. In other words, the fiduciary has a duty to act solely in the interest of the participants, and to prudently select and monitor plan investments.

There can be no “side deals” that benefit the fiduciary. For example, if a bank offers to reduce the business owner’s interest rate on their credit line in exchange for moving or keeping the company’s retirement plan with the bank, and the business owner accepts the offer, then he/she has violated his/her fiduciary duties.
The Risks of Being a Fiduciary
The fiduciary is personally liable for breaches of fiduciary duty. In recent years, several cases have had sanctions or judgments that often are in the seven figure range.
In summary, a plan fiduciary who breaches his/her fiduciary duties to the plan:

• Is personally liable for any breaches of fiduciary duty
• Must make up any plan losses and lost opportunity costs
• Must pay participants’ attorneys’ fees
• Is often subject to stiff DOL civil and criminal fines and IRS excise taxes

There are many ways to mitigate your liability as a plan fiduciary. Talk to your investment adviser or retirement plan broker for best practices in this area especially with regards to ways to limit your exposure.

When the hard cost of insurance seems to be spiraling out of control it is logical to also explore the soft costs associated with the administration of the benefit plans as a strategy to mitigate this expense. Depending on the size and complexity of your organization and benefits offerings, up to 25% of your total spend could be tied up in the transactional costs of benefits administration. This warrants considering processes improvement or retooling as a means to controlling this cost.

Regardless of the size of an organization, the right technology will dramatically improve open and continuous benefits enrollment by automating manual tasks, engaging employees with self-service and optimizing benefits planning usage patterns. The resulting benefits are significant: saved time, increased productivity, improved data integrity, and consistent employee communications which
leads to increased employee retention.

Several methods for automating the benefits administration function are available to even the small market. Consider these options to determine what will work best for your organization.

1.  Deployment of Employee Self-Service – The technology application that you choose must have self-service functionality that is easy to use, includes workflow capabilities, and is accessible via the internet. If you properly train employees on how to use the benefits enrollment portal thoroughly, most employees will complete it successfully the first time. Studies also suggest that more than half will do it at home with a spouse, thus making them more productive at work. Data accuracy is also improved when enrollment info is entered at the employee level as opposed to the administrator level. The more participants that have access the better. The use of kiosks should also be considered for those employees who may not have the internet readily available. Expanded reporting and survey capabilities also give added bonuses to employers who successfully deploy ESS.

2.  Technology Integration – A stand alone benefits administration portal gets you halfway there, but to truly maximize efficiencies, I suggest a fully integrated Payroll/HRIS/Benefits application. Payroll data tends to be the most accurate data set in any organization, so it makes sense to build benefits technology off this data to ensure utmost accuracy for employee contact information, eligibility, premium deductions, and terminations. Many systems also include interface capability to the insurance carriers. This type of integration allows for ONE point of entry for all payroll, HR, and benefits related information. This creates a more efficient, less error prone process. Integration eliminates profit leaks with terminations and eligibility because all employee data is resident in a common place that
connects with the carrier.

3. Expense – Who should responsible for this cost? In many cases there are three different parties involved with the process: the insurance carrier, the insurance broker, and the
technology provider. You as the employer are clients of all three. I suggest putting them in touch with each other to see what makes the most financial sense for your organization.
Many times brokers will absorb this cost as a value added service. The carrier may be willing to cut you a deal to retain or attract your business. Thirdly, the technology provider may have
extensive experience with your carrier and may be willing to reduce this cost because less work has to be done on the front end. At the end of the day, it is worth the financial
investment and time up front to create the carrier feeds and maintain connectivity especially if you plan to stay with that provider for several years.

]]> http://gocentripetal.com/automating-benefits-administration/feed/ 0