Want to improve administration of your clients’ benefit plans?
Here’s a suggestion: Help them pick administrators who agree to meet performance standards and offer financial guarantees.
That might sound like revolutionary advice, but demands for standards and guarantees are typical negotiating points in most markets.
Performance standards and guarantees address employers’ needs to simplify the benefits administration process and reduce unexpected costs while consistently managing compliance requirements. Adherence to performance guarantees may also increase employees’ satisfaction with their benefit.
Think, for example, about employees who are using flexible spending accounts to pay for health care or child care. They need prompt reimbursement of the monies already deducted from their checking accounts.
Using performance guarantees can also help the employer’s benefits personnel focus on achieving current business objectives rather than complying with COBRA, HIPAA, the flexible spending account rules and all of those other complicated, rapidly changing regulatory schemes.
Finally, effective performance guarantees can cut costs related to violations of federal benefits laws. Penalties for failures to comply with COBRA, the law that governs continuation health benefits for departing employees, can run as high as $500,000, or 10% of group health plan costs.