Why Struggle With Paper?

Too many employers continue to manage benefits with paper. Those employers are spending an average of about $1,000 per employee per year on human resources and benefits administration.

Here are arguments you can use to convince employers that automation will help their bottom lines by improving compliance with their rules, carriers rules, and a long list of laws and regulations.

1. Manual benefit enrollment and administration processes force brokers and human resources staff to spend an inordinate amount of time deciphering illegible handwriting and correcting erroneous benefits elections. When mistakes slip through, employers and plans may face big, unexpected claims.

2. The consultants who set up a well-designed benefits administration system can incorporate the clients business rules for eligibility, enrollment and program options.

That means the electronic enrollment form itself can help show employees whether they are eligible for the medical plan or whether they can cover 23-year-old children as dependents. The people who set the systems can further improve the quality of the benefits information by loading employee data straight from the employers payroll or human resources systems.

3. An automated system can simplify the process of conducting plan audits.

Hiring outside firms to conduct plan audits can cost more than $7,500, even for a small employer, but using an automated system to do an in-house audit may be a good way to cut plan costs. Studies have shown that the typical audit finds that about 5% of plan members are ineligible for coverage.

4. An automated system can help employers avoid the fines and other penalties imposed by the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act and other federal laws.

S. Stuart Spector is vice president and general manager of Vertafore Benefits, a unit of Vertafore Inc., Windsor, CT. He can be reached at sspector@vertaben.com


Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.