How to Choose the Right Benefits Administration System for Your Company
The right benefits administration system will improve efficiency and help ensure compliance with healthcare regulations.
If you’re like many benefits administrators, you may feel like “a department of one” But worry not; the right benefits administration software, like the software GoCo offers, will give you the vital support you need, taking over many of the arduous tasks you’re responsible for.
The Guardian Workplace Benefits Study found that 1 in 3 employers plans to increase their outsourcing of benefits programs to ensure compliance with the Affordable Care Act. Further, 78% of employers expect the costs of their benefits programs to increase as a result of the ACA, the study found.
Thus, 70% of employers believe the amount of time spent on regulating and administering benefits will increase, according to the study. With the availability of automated processes, adopting a benefits administration system is a no-brainer.
The Perks of Using a Benefits Administration System
Here’s just a quick glance of some key perks of using an automated system:
- Efficiency: Benefits software can automatically integrate employee data into your payroll system.
- Compliance: These systems can ensure you adhere to regulations on benefits administration.
- Access to information: Employees can learn about their benefits from the system itself, and all parties who need that information can quickly access it.
- Analytics: Benefits software can help you analyze trends and patterns in the benefits that employees need and use.
Types of Systems
Several types of benefits administration systems exist, from modules that are part of a broader system to standalone solutions. Consider whether one of the following options will work best for you:
- A standalone benefits administration solution.
- A platform that incorporates several core HR functions, such as onboarding and payroll.
- A comprehensive HR management platform. You might encounter terms such as “integrated HRIS (human resource information system)” or “HCM (human capital management) suite,” which encompass a broad or complete range of HR functions, according to Technology Advice.
“Typically, companies that focus on solving one particular problem will have the strongest solutions in that category,” says Technology Advice. However, integrated HR solutions are often the logical choice for small and mid-size companies, the website adds. Such systems may be the most cost-effective and simple to implement.
“As far as an all-in-one HR platform goes, Go.Co.io is your best bet,” says Forbes. “Modern, easy to use, and able to balance all aspects of internal HR: hiring, onboarding, tax forms, document management, paid time off tracking, benefits management, and to top it off, syncs with your existing payroll for a seamless experience.”
For further input on the differences between these types of systems, read the white paper “How the Wrong Benefits Administration System Can Hinder Efficiency and Put Your Organization at Risk,” by Assurex Global.
Choose a System That Does the Following:
Allows for Easy, Intuitive Self-Service
Top contenders have a self-service portal that allows employees to customize their own benefits plan, guiding them through the process. This saves a great deal of work for benefits administrators. The plan should be easily accessible for family members covered on the plan as well, HR Morning points out.
Choose a system with an intuitive user interface and setup process—as well as an intuitive admin dashboard for HR.
Going mobile with benefits administration is increasingly important, as many employees expect to be able to use their smartphone for everything, HR Dive explains. Benefits administration software can help implement a mobile system that’s easy to use for both employees and administrators.
A system that employees can easily access from their smartphones will reduce work for benefits administrators. When they need to update their information—when they get married or have children, for instance—they can easily do so without involving HR personnel.
The best systems help employees navigate a marketplace of benefits vendors. They also make it easier for companies to give employees access to less common benefits, such as pet insurance. Many companies are opting to add a broader range of benefits to make their compensation packages more attractive, says HR Dive. Thus, a company might deal with a dozen–or more–different carriers that all need information about its employees. That adds complexity to the benefits administration process, which an automated system is designed to handle.
Some systems help identify benefits that may give employees the best value. Additional features may include helping employees plan for retirement, offering other financial planning assistance, or aiding in personal risk management by providing reports based on hypothetical scenarios.
Read SHRM’s article “Know What You Need to Select a Benefits Provider” for more tips on choosing a system that impresses your employees.
According to Benefits Pro, the HR experience is even more important than the employee experience when it comes to choosing a benefits admin system. The HR department interacts with the system much more frequently than employees, who may each use it just a handful of times per year.
Much emphasis usually gets placed on employee experience—and numerous systems provide a great interactive experience for employees, says Benefits Pro. But too often, an attractive interface “sells” a system that’s just not as useful to HR professionals. A truly valuable system facilitates reporting, data management, and other HR tasks.
“It is not the employee user experience that is going to drive employee participation and education, reduce administrative costs, and optimize the human resources role,” explains Benefits Pro. “It is the ability to leverage technology to handle the time-consuming, manual, data-intensive tasks that are required of HR.” Choose a system that can carry out tasks such as the following:
- Automated data entry.
- Administration of benefits.
- Assistance with preparing reports.
Read this article by Benefits Pro for more advice on choosing a system that’s optimized for HR professionals.
Integrates with Existing Systems
Consider the feasibility and ease of getting your benefits admin software to sync with your existing HR platform. The website Technology Advice suggests asking the following questions:
- Is the new system designed to sync with payroll and other HR systems? Are those other systems capable of receiving updates from the new one?
- How much legwork would it take to set them up to sync? Will you need to pay for that time, or is that service included in the cost of the system?
- Will the systems sync in real-time—or if not, how often?
Think about how the new system will communicate with payroll and your system for managing retirement plans (unless you’re adopting a new system that will handle all of the above).
“GoCo has established itself as the all-in-one HR solution that will work flawlessly with your existing Payroll,” says the Huffington Post, which emphasizes how painless we make the process of adopting a benefits administration system.
Read the full Technology Advice article for more tips on merging your new and existing systems.
Helps Ensure Compliance
Choose a system that’s designed to make sure you comply with all relevant regulations, including the Affordable Care Act (ACA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA), as well as the Health Insurance Portability and Accountability Act (HIPAA).
The system should make it easy to personalize a benefits plan without the fear of falling out of compliance. Checks within the system should prevent compliance errors from occurring, making it easy to tailor plans to individual employees’ needs and preferences.
For example, software can track employees’ hours worked to find out whether the employer should be categorized as a small business or applicable large employer (ALE), in regards to ACA reporting.
Learn more about compliance and reporting requirements from the Bureau of Labor Research.
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Tracks and Analyzes Data
“Benefits leaders also have new analytics options at their disposal as more vendors combine benefits enrollment and claims data to help HR make improved strategic decisions,” says SHRM. These systems can allow HR to produce sophisticated reports to share with organizational leaders or use in their internal decision-making.
“These analytics give leaders a better understanding of their benefits costs and provide actionable insights so they can make “in-flight” adjustments to plans,” adds SHRM.
For example, benefits administration systems can perform the following tasks:
- Share information on which benefits and plans your employees prefer.
- Create total compensation statements for employees (G2) to aid in reporting and decision-making.
- Chart average usage of particular benefits to aid in developing a wellness program that targets common issues.
If you’re ever faced with an audit, your data and reports can help prove that you worked to comply with all regulations.
Read the article “Big Data Is Shaping Employers’ Benefits Strategies” by the Society for Human Resource Management for more insights on how a system with strong analytical capabilities can benefit your organization.
Keeps Employee Data Secure
Look for a system that securely stores a record of data, such as changes to an employee’s information, hours worked, claims made, and receipts for health-related costs. The system should serve as a central place for aggregating this data for use by insurance providers, companies, and employees, allowing anyone with permissions to easily access it.
Inquire about the system’s method of keeping employee data secure. This involves both how data is stored and how it’s transmitted to insurance providers.
A quality system protects you from cyberattacks, a growing threat, since you’ll be storing sensitive employee data in the system. Such attacks have increasingly targeted employee info and benefits systems in recent years, SHRM warns.
The best method of transmission to providers is an EDI connection, also called a carrier feed, says Technology Advice. “This method of data transmission is the most secure, automated, and least prone to error,” the website explains. Ask your benefits administration provider whether setting up a secure method of transfer will take extra legwork, or whether it’s automatically included.
Read this Forbes article for more tips on best practices in data security. Also, read SHRM’s article “Guarding Benefit Plans from Cyberattacks” for more great advice that’s specific to protecting employee benefits systems.
Provides Training and Support
Ask a potential provider how much training and support you’ll get, especially if implementing the system will take some legwork.
Talk with your own tech support personnel about how challenging they believe the system will be to set up and maintain. Make sure they’re on board and in agreement with what the software provider has told you.
Whichever system you choose, talk with a range of other stakeholders as well before finalizing the decision. Get key HR staff on board, so they’ll feel fully invested in the new system and will enthusiastically help promote it. That way, you’ll ensure the best reception possible.
If you’re ready to choose a provider that ensures compliance, has software that will sync with your payroll system, and offers outstanding support, look no further than GoCo. By working with us, you’ll enjoy a seamless transition into a user-friendly benefits administration experience.