The downswing in the economy over the last several years has hit HR personnel hard. A recent Aberdeen Group study shows that both line of business managers and even HR managers themselves see HR as less aligned with the strategic needs of their business and overly tactical in practice. So, you want to be a rising star and adviser? Then work with your HR clients and help them change this trend.
One area where you can help is in benefits administration outsourcing. This month, we'll look at what true outsourcing is and how HR will benefit.
HR has indeed been taking it on the chin. Often the department of "do more with less," HR is the first group to get cut when downsizing and the last group to grow during expansion. Benefits administration is one HR service area that has contributed greatly to this "less strategic" view of HR. This is because it is highly visible as a cost area and as an employee satisfaction driver.
The Aberdeen study supports this idea, showing that the two leading benefits management strategies for all companies are automation of existing HR processes and empowerment of employees to be more self-sufficient. The study also indicates that the cost of providing benefits is the most important driver for this management focus.
And benefits management is complex. Medical, dental, vision, LTD/STD, Life/AD&D, FSA, MRA, COBRA and more need to be selected, rolled out and supported for any number of employee groups. Then there are 401(k)s or stock option programs. All of these systems are external to the employer and need to be managed. Plus the internal payroll and/or HRIS systems need to be kept current with employee changes and payroll deductions. Premium payments to the carriers need to be made and bills reconciled. Lastly, employees will be calling or emailing with questions and issues on a regular and on-going basis.
Dealing with all of this falls to HR. It is a never-ending story. Fortunately, true outsourced solutions are available that keep up with ongoing employee elections, keep all carriers updated and bills reconciled, keep payroll updated, and handle employee communication beyond traditional work hours.
A total solution
The technology to operate an outsourced solution is crucial and needs to accommodate both automation and manual access. Electronic Data Interchange (EDI) and online systems for HR administrative access and employee self-service are the key technology elements.
Step 1 - Automated Payroll/HRIS Integration: Employee demographic information is loaded into the outsourced solution from the payroll or HRIS system. This includes new employees, terminations, changes to existing employees (e.g., job change). After the initial upload, this is typically done on a weekly basis. HR should also have access to manually make employee demographic changes.
Step 2 - Online Enrollment and Life Events: Open enrollment is processed online or manually or a combination of the two. New hires and life event changes are processed as well. This gives employers complete eligibility lifecycle management with the recording and automation of all coverage, plan rules, and formulas. 24/7 support is provided for all employees.
Step 3 - Election History Database: All employee benefits elections are stored and available for reporting.
Step 4 - Automated Carrier Integration: Employee elections data are securely transferred to each carrier and other service providers. Receipt confirmation and discrepancy resolution within 48 hours.
Step 5 - Automated Payroll/HRIS Integration: Employee deduction information is automatically transferred to the payroll system. Optionally, HR should be able to pull this information from the outsourced solution and manually upload the data into payroll.
Step 6 - Consolidated Billing: The outsourcer produces a single, consolidated bill each month. The employer writes one check to the outsourcer, which, in turn, remits payment to all of the carriers. This is complete premium management - from collection to remittance - with auditing and reconciliation of all carrier bills.
The final piece of the outsourced puzzle is support for employees and their families. The requirement for online self-service tools is a given. The next generation of self-service tools is incorporating social network capabilities, the ability to shop for medical procedures on cost and quality, and outcomes based wellness programs. Online tools are essential and do reduce the burden on HR, but employees will still need and want one-on-one support from benefits specialists. Emails and telephone calls are inevitable. Thus, call center support, 24/7, is a must for an outsourced solution. Phone, email and even online chat should part of a total outsourced benefits management.
How does an employer pay for outsourced benefits management? The answer is that the solution pays for itself. For most companies the return on investment is easily quantified and measured with ratios between 2.5:1 and 4:1. Most often the solution will begin paying dividends immediately.
Beyond the ROI, HR and their stakeholders benefit in a variety of ways. First, at the end of the month HR has to approve the writing of a single check for all of their benefits and will spend no more time trying to reconcile carrier discrepancies. Second, the outsourced team is made up of benefits specialists and is a direct extension of HR - with expanded hours! Employee support is the right blend of online tools and one-on-one support. Third, automation improves both accuracy and efficiency with the added benefit of helping with HR compliance needs. For many companies, the elimination of paper-based processes adds even more to the ROI. And last, but certainly not least, because benefits are so important to employees the effect of a best-in-class solution on employee attraction and retention can be tangible.
So the next time you see HR clients still trying to squeeze more water out of their HR "rocks," talk to them about expanding HR beyond their brick and mortar to a benefits management outsourcer.
Reach Lamb of Benergy Interworks at A.D.A.M. Inc,
Employees like e-information
Research from Unum reinforces advisers' messages that benefits information should be offered in at least three different formats, including online.
The third annual study of more than 1,700 employed adults by Harris Interactive, conducted online in December 2010 following the benefits enrollment period, finds that an effective benefits education will help employees make informed choices.
According to the study, 91% of employees who were asked to review benefits within the past year had accessed information made available to them. Printed materials, personalized statements and employer-sponsored Intranet or website were among the most likely to be utilized when offered. Specifically:
* 68% of employees who had access to personal statements utilized them to get information about their benefits.
* 68% of employees accessed information on their employer's intranet or other website sponsored by employer when it was offered
.* 68% of employees used printed information or brochures to learn more about their benefits when given the opportunity.
Other popular forms of education methods used by employees include email communications from employers, group and one-on-one meetings where benefits are presented and employees can ask questions, and online interactive tools.
The research shows that 97% of employees who had three-plus weeks to review their benefits education materials said it was enough time-but just 50% percent of respondents were given that much time. "Allowing at least three weeks for employees to review at least three types of education methods adds up to better benefits education," says Bill Dalicandro, vice president at Unum.
