Not long ago, the main reason employers weren’t converting to online-based benefits enrollment was the cost. Now, because of more competition among vendors and other factors, the opposite is true.
“Nearly three-quarters of U.S. companies have moved their benefits administration online because of the cost savings. But to get there, it’s important to look for a vendor with high-touch service to help show you the way,” says Ryan Smith, a sales executive with eBenefits Solutions, a part of UPMC Health Plan.
Still not convinced this high-tech benefits admin approach is the way to go?
Smart Business spoke with Smith about seven great reasons to switch over now — and every single one leads to cost savings.
Reason No. 1: Online self-service benefits administration costs less.
According to a recent CFO.com survey, the average cost for an HR staff to manually enroll an employee in benefits is around $110. The average cost for an employee to self-enroll online is just under $22.
Reason No. 2: Online self-service takes less time for HR staff.
An industry survey found that when employees do their own benefits administration online, it results in a 15 percent time savings by HR staff.
Reason No. 3: Online benefits administration can cut in half the time needed for open enrollment.
Among other things, a self-service site frees up HR staff to focus on more strategic tasks and initiatives, such as wellness or employee engagement programs. These help to create a healthier workforce and reduce overall health care costs.
Reason No. 4: Online benefits administration saves on paper, printing and postage.
Printing and mailing benefits packets can be costly and time consuming. When you convert to online, costs for these ‘three Ps’ can be eliminated altogether.
Reason No. 5: Online benefits administration cuts down on premium payment mistakes.
One recent study found that manual benefits administration could significantly increase the likelihood of monthly premium billing errors — leading to higher employer admin costs.
Reason No. 6: Online benefits administration can lower the number of ineligible employees who are enrolled in coverage.
A recent study conducted by a large benefits consulting firm shows that the cost of ineligible employees and dependents (age 26 and older) who receive benefits is between 2 to 8 percent of the total medical premium cost. When electronic data feeds and system eligibility rules are used, this unnecessary cost is virtually eliminated.
Reason No. 7: Online benefits administration is just plain easier.
Online enrollment means employees can sign up 24/7 from home or office, and can check their selections and benefits any time. It’s also much easier for employees to compare plan options and benefit details when everything is online. Clearly employers benefit from this ease of access as well.
If an employer does decide to switch, what’s important to look for when picking a vendor?
To ensure your online benefits administration runs smoothly, it’s more important than ever to look for a vendor with deep HR experience and a high level of technical expertise. This vendor must be able to offer high-touch customer service to your HR staff as well as individual employees.
And by the way, employees will applaud the switch to online the loudest. It turns their benefits selection process into an easy, retail-like experience akin to an Amazon.com visit. Many online benefits admin platforms even include decision-support tools that help employees determine in real time which products and services are the best fit.
Insights Health Care is brought to you by UPMC Health Plan