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Benefit Enrollment: Challenging for Brokers and Employers Alike

April 15, 2019

Benefit enrollment is a necessary but confusing and time consuming process for both employers and brokers in Massachusetts. It’s also one of those administrative tasks that employees tend to dread. Sure, they want access to their benefits, but the process may seem needlessly complicated or confusing to the average worker. When the process is hard to navigate, employees are likely to either make mistakes or require support from HR staff, who then may need to turn to the benefits broker for help before going back to the employee. Following all those steps eats up time and money for both the employer and broker.

High labor costs are just one of the challenges of using an inefficient benefit enrollment process system, though. It’s a complicated topic, and a lot of employers and brokers are frustrated by the same core issues.

No Connection to Payroll

How benefit enrollment works is inconsistent from company to company because different brokers use different processes. Some brokers use enrollment systems that are provided by the companies they work for, or they use the insurance carrier’s system. Some brokers outsource benefit administration to third-party providers. So there’s a lot of variety in the way that brokers process employee enrollment information, but these various systems tend to fail in one significant way: they aren’t connected to the employer’s payroll system.

That’s a problem because benefits and payroll are closely linked. When an employee enrolls in health insurance, HR has to make sure that the employee’s monthly premium is deducted from his or her paycheck. Moving between two different systems – payroll and benefit administration – opens the door to administrative errors. Every time an employee changes a benefit election, someone has to go into both systems to process the change. That’s an inefficient use of time for HR staffers. Doing things this way can also lead to payroll mistakes that anger employees.

Complications with Benefit Types

Having access to a range of benefit types is one of the things that attracts employees to a new company. Offering many benefits is a savvy recruitment tool, but it absolutely complicates the onboarding process. Say an employer offers health, dental, vision, disability (short-term or long-term) and voluntary life insurance to its employees. If each benefit type is administered through a separate carrier, workers have to complete up to five different enrollment processes.

Complications with Enrollment Types

From the employer’s perspective, it would be easier to manage benefit enrollment only once a year. But employees are hired, change positions and have major life events all year, so employers and brokers must prepare to manage enrollment on a rolling basis.

Employees also have to be informed about their enrollment options and responsibilities so they know how to report changes. It’s typical for an employer’s onboarding process to include guidance about enrolling for benefits, so employees don’t have to be too proactive about making this happen. But existing employees need to know how and when to initiate benefit changes when they get married, have children or experience other qualifying life events.

Open enrollment presents its own challenges because so many employees make changes at the same time, sometimes overwhelming HR staff and brokers.

Employer Oversight is Difficult

Using a disconnected enrollment system, in which benefit administration is totally separate from payroll and other HR systems, complicates the employer’s ability to monitor and analyze activity around benefits. Without a central system, generating reports and auditing information has to be done manually. Approving benefit requests and changes takes longer than necessary.

Compliance should be of particular concern for employers making decisions about benefit enrollment. It’s easy to make mistakes when using manual data entry to integrate payroll and benefit management, and even minor errors can lead to major and costly issues with compliance.

Simplifying Benefit Enrollment

As employers’ healthcare costs continue to rise, using an inefficient benefit enrollment system is a choice few companies can afford to make. Giving employees access to self-service tools, and integrating benefit enrollment with payroll and other HR functions, is the more cost-effective approach.

Commonwealth’s iSolved uses a holistic approach to employee benefit management. iSolved has enrollment tools that are tied to payroll, easily allow for employer approval and provide direct connection with various carriers. Likewise Commonwealth has a solution to make brokers’ lives easier and help them keep their letter of record.  Learn more about Ben-Align.  Need help with benefits from any angle?  Call Commonwealth Payroll & HR at 978-599-1500.

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