Corporate America’s view on health & welfare benefits administration

By Venkat Tadanki

As a benefits administration and human resources professional, you bear a number of critical responsibilities, says Venkat Tadanki, including helping to maximize your organization’s investment in employee benefits.

Such a task has become increasingly difficult over the past several years as internal resources have diminished steadily while employee benefits costs have escalated exponentially.

Nevertheless, you are tasked with controlling, managing and even driving down costs while ensuring compliance.

Cost continues to be a concern but compliance tops the list

Secova's 2010 Benefits Administration Survey was undertaken in late 2010 to gather benchmarking data to support an organization's overall benefits management and administration strategies. We surveyed more than 131 senior HR executives from mid-size to large employers who have well over 50,000 employees. The trends below demonstrate the pressures HR/benefits managers face while navigating through the complexities of providing high quality and cost-effective health benefits for employees faced with health care reform.
Cost continues to be a concern but compliance tops the list.

Respondents made it clear that their number one concern is compliance with the Health Care Reform Act. While many of the new rules and regulations will not take effect until 2014, employers must begin to act now to evaluate their benefits plans and ensure their compliance with the Act. Among the tasks employers will be faced with are revising the design of their group health plans, providing new summary plan descriptions, and communicating to their employees about the effects of the new rules and regulations on their benefits.

The communication of compliance-related information is helping to drive up concern regarding proper communication resources. There is growing belief in the HR community that organizations will implement call center models to a greater degree due to the continued need to reduce costs while still helping employees understand the implications of health care reform and make informed decisions.

There has been a lot of focus on dependent eligibility

Even with historical compliance challenges looming, HR professionals haven't turned their attention away from the need to continue to reduce benefits administration costs through Dependent Eligibility Verification Audits (DEVA). 70% of the respondents either have implemented or are in the process of implementing a DEVA and an ongoing dependent eligibility management process. While audits help employers save tens of millions of dollars, according to one survey respondent, the greatest advantage is that "they ensure compliance with eligibility rules for hundreds of thousands of employees".

Online support for issue resolution is a missing link: More than 55 percent of respondents' organizations do not provide online issue resolution support. Again, this finding is made more compelling by the large percentage of respondents who cite administrative cost reduction and increasing the use of employee self-service technologies as top concerns.

There's no denying that web-based systems will have to be given greater consideration as HR departments are forced to maintain high levels of productivity with static or dwindling resources. In addition to helping reduce costs and administrative strain, online support technologies are valued for giving employees the ability to perform tasks such as enroll in programs, update personal information, find the answers to frequently asked questions at anytime day or night.

Mediocrity appears to abound among benefits enrollment systems

Forty-two percent of respondents rate their enrollment system's ease-of-use poor to average. Fifty percent rate their system poor to average in terms of reporting and analytics and the system's ability to be customized. Nearly 40 percent rate their system's response time poor to average. And more than 36 percent rate their system's reliability poor to average.

These ratings help to explain why 40.7 percent of respondents say they have a high level of concern regarding updating and automating their benefits administration systems and why another 47.8 percent cite a high level of concern when it comes to ensuring the accurate and secure exchange of data.

Given these results in conjunction with the scope and complexity of health care reform, the increased intricacies of administering benefits, and the ongoing need to better manage costs, it appears as though many organizations need to move quickly to identify ways to enhance their benefits administration systems' overall effectiveness and bridge crucial gaps in ease-of-use, reliability and dependent eligibility management.

About

Venkat Tadanki the CEO of Secova, provides customized solutions that drive down costs for employers health and welfare benefit offerings for both the public and private sector, including many Fortune 500 Companies.