Voluntary benefits enable employees to self-insure against their unique risks. These products, which can include accident, critical illness, hospital indemnity and ID theft, just to name a few, in the past have existed outside a company’s standard health, disability, or life insurance packages. And that’s a problem.
A disjointed and inefficient voluntary benefits strategy can mean employees miss out on critical benefit offerings, and HR professionals face a process that’s laborious and rife with opportunities for error, which could lead to compliance issues.
Smart Business spoke with Gallagher Benefit Services Area Vice President Voluntary Benefits Suzi Tamborelle and Central Ohio Market Leader Vince Giacalone about a more efficient, streamlined, and cost-effective way to rollout voluntary benefits.
What issues exist in the way voluntary benefits are typically rolled out?
The way voluntary benefits have typically been rolled out at companies involves an insurance representative talking individually with employees and enrolling those that are interested. HR is given a payroll deduction list that shows how much should be deducted for each employee for the products they selected and HR inputs those deductions into their payroll system. The process is not in sync with the normal health benefits cycle, the benefits are not communicated in the same manner and often imes it cannot be hosted on the company’s existing insurance administration system. It’s haphazard and inefficient, leading to low adoption and a very disjointed administrative process for HR.
Today, these voluntary benefits implementations can and should be set up to sync with a company’s existing payroll and benefits administration module. So, when a new hire comes on board, they can enroll in voluntary benefits in exactly the same way they do all of the standard benefits. And because these modules are rules-based systems through a single point of entry, the process becomes more compliant, effective, and efficient for the HR department to administer and bill those products.
How does this system help employees?
When voluntary insurance products can be accessed through an employer’s existing benefits administration system, it becomes easier for employees to explore the different product offerings — for instance, they can watch explanatory videos and review benefit summaries that could help them make purchasing decisions before they self-elect on the system.
In today’s workforce, there are five generations at work. Voluntary benefits have products suited to someone who’s nearing retirement, and others for someone who’s in their 20s and starting to plan their family. Employees can pick and choose what works best for their personal needs and situation.
How might HR benefit?
From the HR side, incorporating the voluntary benefits onto their benefits system eliminates paper processe and streamlines administration while eliminating errors through a rules-based system. On a benefits administration system, once an employee makes an election, the election data can be automatically sent to the carrier while also sending the information directly to payroll so that deductions can be made. Incorporating all these automated steps improves overall efficiency, makes HR more compliant, and will reduce mistakes that can lead to penalties or errors in elections or deductions. It also means rather than HR spinning their wheels collecting paper applications, submitting them to an insurance carrier, and reconciling bills, they can spend their time on strategic organizational initiatives.
These programs can be used by companies with as few as 20 employees. And the bigger the company, the more economies of scale come into play. A similar processes can be rolled out to employers that only have a payroll system, but no benefits administration module.
Brokers who champion this holistic approach can help companies diagnose where the inefficiencies currently lie, and offer solutions to create an integrated strategy that can leverage employers’ existing system to maximize efficiency. ●
INSIGHTS Insurance is brought to you by Gallagher