Why You Should Invest in Direct Connectivity with Benefits Providers
Employee expectations of the companies they work for have evolved quite a bit in the last decade. The startup culture that initially featured daily catered lunches and ping pong tables has morphed into companies of all shapes and sizes offering more innovative benefits ranging from parenting stipends and mental health support to free rental cars, unlimited PTO, and other “outside the box” offerings.
Although most businesses don’t need those types of extravagant benefits, having a vibrant benefits program is crucial for increasing employee engagement and retention, evidenced by recent studies showing that more than half of employees believe better benefits would help them thrive in the workplace.
But while employees certainly enjoy and profit from enhanced benefits packages, it’s not the same happy story for enterprise HR teams responsible for managing and administering those programs. In fact, over 40% of employees spend as much as one-quarter of their workweek on manual data tasks and addressing errors, leading many HR and business execs searching for better and smarter ways to manage vital programs like employee benefits.
Old-school benefits administration doesn’t work in new-school cultures
Human Resources teams have been complaining about their benefits administration systems for years. Since HR departments already handle many administrative roles like recruitment, workplace safety and payroll, they already have huge paper trails. A bulky and inefficient benefits administration process that requires re-keying data from paper forms only adds to this paper trail and complicates HR operations.
But since benefits administration is a core activity and is vital to business success, they continue to soldier on with their work, knowing that any improvement made to existing processes will pay huge dividends for their teams and their company at large.
Today’s HR professional shouldn’t be spending nearly 33% of their time on managing payroll and benefits administration activities. They should be focused on other strategies and activities like skillbuilding, workforce planning, and performance management that drive business growth. Manually administering benefits — inputting enrollment selections, handling qualifying events, and communicating those elections and changes with benefits providers — is not only inefficient, but it raises a number of security, compliance, and data validity concerns like:
Data entry errors are common with manual data entry. And errors in benefits enrollment and administration can prove costly for the company beyond just the embarrassment and annoyance of the affected employee or employees. Correcting these errors requires companies to allocate more time and money to manually fixing them, significantly increasing business operations costs and dramatically lowering overall productivity and efficiency.
Manual benefits administration is just begging for improper data handling and leakage that exposes the organization to unnecessary legal and compliance risk.
These issues can lead to serious regulatory scrutiny in addition to financial loss, as regulatory standards like HIPAA have stringent guidelines on how, when, and which mediums can be used to transfer the personal health information of employees. HIPAA investigations and penalties to companies that transgress regulations can result in significant brand damage and monetary loss. HIPAA violations can cost companies up to $58,490 per violation and violations can total more than $1.7 million per calendar year.
Direct connect is a renaissance in benefits administration
Companies of all sizes have begun to discard their legacy benefits administration systems in favor of more flexible, integrated, and automated solutions. While some organizations may be hesitant to invest more dollars into another technology solution, companies deploying human capital management (HCM) platforms routinely see a return on their investment of up to 325% because they’re able to directly address two of the biggest pains surrounding the function: security and efficiency.
Modern, cloud-based HCMs virtually eliminate data entry errors by automating core activities like benefits elections, enrollment forms completion, and other traditionally paper-based processes. The seamless, end-to-end workflows reduce manual intervention and the amount of time HR has to spend working on benefits paperwork or correcting miskeyed data, freeing them to pursue higher-value activities.
More importantly, HCMs with direct carrier connectivity enable companies to securely and automatically transmit enrollment data in the federally-mandated ANSI X 12N 834 format directly to carrier partners. They can automatically submit new enrollments as well as changes form qualifying events or other considerations, all while maintaining full compliance with HIPAA’s data handling standards and other industry guidelines.
Some HCMs like SyncHR HCM boast advanced features like a centralized database that seamlessly aggregates data across employee-related systems to help improve data accuracy and completeness that further eliminates costly data errors. They also feature a range of automation capabilities like configurable eligibility and event rules, configuring benefits under a single entity for simplicity, and automatic minimum issue enrollment to satisfy EOI standards — with no manual intervention and data entry.
This approach helps organizations of all sizes significantly reduce their operating costs while boosting overall operating efficiency, helping some of SyncHR’s users achieve a 67% ROI on their HCM implementation in just 2 years, while also saving employees over 2,000 hours of time wasted on manual data management.
As the value of employee benefits continues to increase and the demand for more comprehensive, better employee benefits grows, companies must find new ways of facilitating benefits enrollment and ongoing administration. Replacing manual processes with automated workflows and direct carrier connections using an HCM increases employee productivity, operating efficiency, and sensitive data security — all while generating substantial returns on that investment in short periods of time.
Click here for a free white paper detailing the tips and tricks for using your HCM to dramatically enhance your benefits administration processes or contact us today for a free personalized demonstration.