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What employers ask when considering outsourcing benefits admin

September 20, 2023

If you’re an employer, is your in-house benefits administration team struggling to juggle the multitude of complexities behind running a successful benefits administration program? Are you spending too much time and resources trying to keep up to date with compliance changes and providing the technology and services your employees need for a positive benefits experience? 

If you answered yes to either of these questions, you may consider outsourcing your benefits administration. Luckily for you, we’re sharing our insights on the top four questions employers ask when considering outsourcing benefits administration. And you can check out our Benefits podcast episode with Steve Carroll, senior vice president of client services at WEX, below.

Does my staff have the time or capability to handle all benefit administration tasks?

Unfortunately, an internal benefits staff often does not have the time or experience required to fully support all areas of benefits administration. “In today’s world with the battle for talent retention, a lot of people who have their benefits administration in-house have small teams,” said Carroll on our Benefits podcast. “They’re working on a system that’s outdated and doesn’t have the latest features and functions that a lot of our clients who are outsourcing do. So, they’re really challenged with just getting the day-to-day work done. Outsourcing helps teams be more productive and strategic, because they can rely on experts to help the run the day-to-day processes.”

In addition to being experts in benefits, an internal benefits staff’s skill set needs to include technical knowledge of systems and the downstream impact of changes, change control management and testing, and regulatory changes. To meet all of these needs, many companies hire additional staffing, especially when there’s high levels of turnover.

Working with a full-service benefits administration partner will give you and your employees access to benefits service from experts in this space, which frees up more time for your HR teams to focus on other business needs. . Any challenges around enrollment, eligibility, plan comparison, dependent verification, and more are shifted from your internal team to your extended team without impact to your daily lives.

Does our technology make it easy for employees to engage with their benefits?

When your benefits administration is all in-house, advanced technology features such as chatbots, mobile apps, AI, decision support tools, and individual customization are usually unavailable or limited. Without these benefits technology tools at their disposal, employees receive limited support in their benefits decision-making and benefits communication. 

A full-service benefits administrator should invest in research and development to continually drive technological advancement. Enhanced features, customizations, and options will be a focus to encourage participation, reduce employee questions, and provide an easy-to-use experience for employees. Your benefits team will give you full visibility into how and when new technology features will be available and how those enhancements will benefit your company.

Are your benefits compliant?

Ensuring your company is staying compliant is an incredibly important and often difficult task. Unfortunately, without a benefits administration partner, you’re on your own to navigate these waters. That means you may have to hire additional legal staff or counsel to monitor, decipher, and provide actionable steps to maintain benefits compliance.

On the other hand, a seasoned benefits administration partner will monitor and decipher current regulations and ever-changing legislation. When things change at lightspeed, it is imperative to have team members who understand what you need to do to stay in compliance, but also develop a detailed plan to execute, predict and account for downstream impacts. Your benefits administrator may also offer non-discrimination testing, which is required for flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and more. 

Do our employees understand and value their benefits?

In-house benefits administration makes it more challenging for you to provide a customized and valuable employee experience. Customization options such as naming conventions, relationship types, enrollment navigation, and custom messaging may not be available. Without customized communication available, employees may not connect with all of your benefits updates or have the tools they need to make confident and educated decisions about their benefits.

If you choose to outsource, you can turn to a benefits administrator that gives you complete control over the look and feel of your benefits site, resources, and educational materials. Your benefits team will work with you to customize your benefits process so your employees will be provided with a personalized experience and the ability to take control of their benefits. Customized benefits communication strategies such as mailings, emails, SMS notifications, custom verbiage, and educational documents and videos will leave your employees feeling secure and satisfied with their benefits decisions.

Would you like to learn more about the perks of outsourcing benefits administration? Check out our handout. 

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.

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