Six Reasons Benefits Administration Software Makes a Lot of Cents
Not long ago, the main reason employers weren’t converting to online-based benefits enrollment was the cost. Now, because of more competition among vendors, advances in technology, and other factors, the opposite is true. “Nearly three-quarters of U.S. companies have moved their benefits administration online because of the cost savings. But to get there, it’s important to look for a vendor with high-touch service to help show you the way,” says Ryan Smith, a sales executive at eBenefits.
For those still not convinced this high-tech benefits admin approach is the way to go, Smart Business recently spoke with Smith about six great reasons to switch over now — and every single one can lead to cost savings.
- Online self-service benefits administration costs less.
According to a recent CFO.com survey, the average cost for human resources (HR) staff to manually enroll an employee in benefits is around $110. The average cost for an employee to self-enroll online is just under $22.
- Online self-service takes less time for HR staff.
An industry survey found that when employees do their own benefits administration online, this results in a 15 percent time savings by HR staff.
Among other things, a self-service site frees up HR staff to focus on more strategic tasks and initiatives, such as wellness or employee engagement programs. These help to create a healthier workforce and reduce overall health care costs.
- Switching to an online system saves on paper, printing, and postage.
Printing and mailing benefits packets can be costly and time consuming. When you convert to an online system, costs for these “three Ps” can be eliminated altogether.
- Online benefits administration cuts down on premium payment mistakes.
One recent study found that manual benefits administration could significantly increase the likelihood of monthly premium billing errors — leading to higher employer administration costs.
- Online benefits administration can lower the number of ineligible employees who are enrolled in coverage.
A recent study conducted by a large benefits consulting firm shows that the cost of ineligible employees and dependents (age 26 and older) who receive benefits is between 2 to 8 percent of the total medical premium cost. When electronic data feeds and system eligibility rules are used, this unnecessary cost is virtually eliminated.
- It’s just plain easier.
Online enrollment means employees can sign up using a time and device that works for them. The convenience for employees includes comparing plan options and benefit details.
If an employer does decide to switch, what’s important to look for when picking a vendor?
Some qualities to look for in a benefits administration vendor include:
- Deep HR experience
- A high level of technical expertise
- High-touch customer service
When businesses turn the employee benefits enrollment selection process into an easy, retail-like web experience akin to an Amazon visit, employees are likely to applaud this move. This is perhaps the biggest reason of all.