Payroll and HR Bandwidth Considerations

By Kisha Moliere
Benefits Administration & Technology Services
Kisha.Moliere@McGriff.com

With over 300 technology providers in the market place, the search for a benefits administration (“ben admin”) solution can be quite a daunting task. One often neglected step in making this process more palatable is first assessing your organization’s current payroll platform connectivity capabilities and HR bandwidth. Committing to this initial appraisal will help make the search more streamlined and assist your benefits consultant in directing you to the most appropriate solutions.

Outside of eliminating manual processes of reporting benefits eligibility to your carriers, two of the most essential features of a good ben admin solution are benefits data accuracy and efficiency. Ideally, employee demographic and benefit election information should have one point of manual entry, resulting in data being synchronized across your payroll, ben admin and carrier systems. This is important in order to ensure that carrier eligibility is accurate, thereby eliminating access to care issues. It also reduces the thousands of dollars per year employers spend erroneously on benefits errors when, for example, an employee has been terminated in payroll, but due to discrepancies caused by inefficiencies in the data processing flow, the carrier is not notified and continues billing.

An employer can address these concerns by asking itself the below critical questions:

Do we want a ben admin solution encompassed within one product that includes applicant tracking, onboarding, time keeping and payroll? Or, do we want “best in class” platforms in each of those areas that can communicate with one another? Theoretically, it would be great to have all of these functions in one platform - and there are indeed companies that offer them. However, in practice it is rare to see these all-inclusive products perform each of the functions well. For example, many companies with proven track records in payroll have struggled to develop benefit admin modules that rise to the same level as their core product. As a result, the current market trend is that many top tier payroll vendors are developing API (Application Programming Interface) connectivity with leading ben admin vendors, resulting in clients having access to excellent solutions from different vendors that have near real time connectivity with one another.

Can our current payroll/HRIS system communicate with a separate ben admin system? If your current system accepts deduction imports from a ben admin vendor (via import files, EDI file feeds, etc) there will be a significant savings in time for your payroll processing, as well as a reduction in data entry errors. Likewise, if your current payroll system can generate an export file of new hires, status changes and demographic changes in a ben admin vendor’s format, most ben admin platforms can accept that information and eliminate manual entry of these type transactions in their system. And as mentioned above, some payroll and ben admin companies have developed near real-time API connections, which eliminate duplicate data entry, imports or EDI files all together. If your current system doesn’t have these features, it may be time to consider a change, or at least have the understanding that this will leave in place the potential for costly discrepancies between your payroll, ben admin and carriers systems.

Does our staff possess the skill to produce the typical data requirements to implement a new ben admin platform? You should honestly assess whether (1) your employees can efficiently and accurately compile the demographic and current election data - in the vendor’s specified format - that will be required to populate the ben admin system, and (2) whether they can conduct an audit of the current benefit payroll deductions versus the eligibility data of each of your carrier partners to insure that your eligibility and billing are accurate prior to populating a new system. These are essential steps for smooth implementation of a new ben admin platform. The last thing you want to experience is the result of loading a new system with errant data that can then corrupt the information in your carrier system once EDI files begin. Fixing this type of faux pas is truly a monstrous task that can go on for months. If your staff is not capable, due to skillset or bandwidth, of performing the above, be sure to ask prospective partners if they can perform these tasks on your company’s behalf, and if they charge additional fees to do so.

Does our HR staff have the bandwidth to effectively administer the daily tasks of ongoing benefits administration? Genuinely assess whether your employees have the ability and/or capacity to audit payroll vs carrier bills on a monthly basis - as well as process new hire enrollments and benefit changes due to changes in employment status and/or Qualifying Life events. If the answer is no, consider partners that provide ben admin technology and outsourcing of these tasks in their service model. Although there will be costs involved, it is often offset by the savings of no longer over paying on premiums. While there are a myriad of other considerations when evaluating which vendor to eventually select (cost, security, configuration flexibility, platform accessibility via mobile devices and apps, decision support tools, communication modules, etc.) this critical self-evaluation will help you establish realistic goals so that your consultant can direct you to partners that will make implementation and ongoing benefit administration pain free for your HR staff and employees.