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Enhancing HR Delivery

It’s easy to find organizations to agree that a benefits automation system would simplify the administration of benefits and make the HR department much more efficient.  It’s a little harder, though, for some organizations to justify what seems like an extra cost, at least out of the gate.  But, and not so surprisingly, the improvements in employee communication and the return on investment of a benefits automation system has proven to be well worth the cost, time and again.

First, let’s define what we mean by benefits automation.   An exemplary benefits automation system offers the following advantages:

  • One point of entry for all employee data and insurance elections
  • Easy-to-navigate enrollment process
  • Benefits confirmation statement that assists in ensuring accuracy
  • Health care decision support tools and benefit calculators
  • Electronic data transfer to insurance carriers
  • Payroll deduction reporting and/or electronic data feeds to and from payroll systems
  • Premium reconciliation and verification of monthly insurance statements
  • Administrator reporting suite with on-demand ad hoc reporting capabilities
  • Total compensation statements
  • No need for installation of new versions for upgrades
  • Simple and quick implementation

Next, let’s examine the advantages for your employees of using a benefits enrollment and communication system.  According to Met Life’s 2010 study (Open Enrollment at a Crossroads: White Paper, New Employee Expectations, New Employer Opportunities), when employees use an online system for enrollment, they are more likely to say they “spent a lot of time assessing options and making decisions” (69% vs. 45%).   By being guided through the process and having access to health care decision-making tools and benefit calculators, employees are able to make more informed choices.  In addition, data accuracy is vastly improved as the submission to the carrier is immediate and electronic, removing the margin for error created by manual data entry.

How can an organization justify the cost of these advantages, though?   Due to standardization and innovations in technology, the costs are not as high as one might think.  For example, Return on Investment (ROI) studies show that the system pays for itself in a very short time-frame.   A 2009 ROI  study by Forrester Consulting of the best-in-class solution offered by Banyan Consulting (The Total Economic Impact™ Of bswift Benefits Automation - April 2009) concluded that the ROI for implementing this solution was 416% with a payback period of 1.1 months.  The study cited the elimination of overpayment of premiums, savings on paper/mailing and savings on HR labor costs as hard savings, plus a multitude of soft savings, such as higher job enrichment for HR staff who can spend less time on clerical work and more time on strategic initiatives, and enhanced confidence in billing amounts, eligibility counts and reports.  With this outlook, even small- to mid-sized companies can take advantage of the flexibility of a benefits automation system.   If you would like more information on this topic, please contact Banyan Consulting or stay tuned for more information on our upcoming Benefits Automation seminar.