You're busy, mentally stretched, and now you're tasked with finding a solution to the "We're spending too much money ..." issue. Characteristically the easiest pain-point to identify, but one of the hardest for which to solve. Benefits are typically the second largest employee cost for an employer, after payroll. Use these three components to focus on as you tackle the costs of benefits administration.
There are a few ways to approach the management of costs related to benefits administration, including:
• Maintain and update your current database
• Deliberate with your benefits administrator
• Communicate current spending to management
Meeting various regulatory and administrative deadlines should be a given task that you're on top of — so an overlooked area we recommend looking over is covered dependents.
The benefits of conducting a dependent eligibility audit scale with company size. In our benefits administration experience, our audits helped savings in large plans with a 3-5% reduction in covered individuals.
The dependent audit will ensure you are not paying for people who are not eligible to be covered. It's not a reduction in coverage to your population — it's a filter for individuals that are not ordinarily covered by benefit plans. Read more about our eligibility audit tips for success.
Deliberating with an administrator will often leave you stuck due to the verbiage laid out in your contract. Even if your contract makes it sound like they won't budge, any administrator should still be open to communication.
While immediate financial relief isn't something that can be promised by most admins, it's still important to start the discussion. Their awareness of your issue is vital for any reaction on their end, after all. No business is going to offer any unwarranted assistance.
If you still turn out empty handed and feel your business needs are not being met, then that's when it may make sense to consider an alternative.
Depending on your relationship and decorum with executives, this may be the first step ... or more commonly, the last option. It's typically easier to work within the boundaries of an action plan than to try to change viewpoints.
Opposite maintenance and uncovering inefficiencies — what could be done when HR is running an already bare-bones budget and management still insists on additional reductions? This is when you realize you have an opportunity.
If you're satisfied with current providers and admins, try your best at communicating return on investment. Present data that supports your decision to keep the service, show how it saves your company time and money — and re-affirm how your organization would be worse off without it.
If you have even the slightest belief that there could be a better option — this is your chance. Compile some comparisons of the alternatives, calculate the short-term costs versus long-term value, and present the preferred choices. Defending your case with real data proving the ROI will be your best strategy.