Digital Benefits Administration Platforms: Improving HR Processes

Streamlining compliance, open enrollment, and employee experience

By Matt Kim, SureCo

Benefits administration is a significant pain point for HR professionals—and a major source of inefficiency for businesses. A September 2022 Insurance Journal article reported that of 1,000 employers surveyed, 37% said administering employee benefits involved moderate to heavy paperwork, while one-third spend 80 hours yearly on compliance. But for all the time invested in benefits management, employers typically have limited options when it comes to offering affordable group health plans.

As a result, many companies are switching from traditional group health insurance to the individual market. They’re also turning to digital benefits administration platforms to ensure compliance, lower costs, and provide comprehensive support to their employees as they select and enroll in their individual plans. This transition to the individual health plan market for employers began in 2020 when changes in federal regulations brought about the Individual Coverage Health Reimbursement Arrangement (ICHRA). ICHRAs allow employers of any size to use tax-free money to reimburse workers for the plan of their choice on the individual market.

While ICHRAs are the next level of benefits customization, the need for a digital platform to enable them is critical due to the increased availability of plan options.

Managing Open Enrollment

Even when using the limited options available with traditional healthcare benefit plans, managing open enrollment is a significant time commitment. Before it begins, HR staff spend hours negotiating better rates with health carriers and brokers, sending out Requests for Proposals (RFPs), and then building the selected plans into the company’s payroll processing system.

According to the Boston Consulting Group, best-in-class companies have boosted productivity in the HR value chain by more than 20% by deploying targeted HR tools, including digital benefits administration platforms.

Those platforms specializing in ICHRAs can further boost productivity by allowing HR teams to skip the lengthy renewal process entirely. Because ICHRAs permit employees to choose their own plan rather than settling for a designated option, HR departments don’t have to review claims or negotiate and build annual health benefits packages. The time savings means employers can focus on business-critical objectives like hiring, retention, and onboarding and training programs instead. Time savings mean teams can focus on talent enhancement strategies, not keeping up with busy work.

Leading digital platforms specializing in ICHRA administration utilize powerful tools and capabilities such as:

● HR dashboards

● HRIS and payroll integration

● Plan selection assistance

● Census management

● Robust reporting

Ensuring Compliance

A powerful platform also features enhanced data reporting and employment eligibility tracking capabilities, so businesses can better avoid Affordable Care Act (ACA) compliance penalties.

Beyond that, manual errors decrease. For instance, without a robust digital solution, an HR manager might forget to cancel an employee’s coverage during the offboarding process. But with a digital benefits administration platform, these mistakes are less likely to occur.

Streamlining the Benefits Experience for Employees

“Over the past decade, Employer-Sponsored Insurance (ESI) premiums have risen above the rate of inflation and have outpaced wage growth,” according to the Center for American Progress, an independent, nonpartisan policy institute.

As premiums increase, however, employees’ plan options do not. Employers customarily offer two or three traditional group healthcare plans for employees to opt into.

HR departments can leverage digital benefits administration platforms in tandem with an ICHRA to streamline the benefits experience for employees. Workers have more control over premiums and the ability to choose a healthcare plan that aligns with their personal needs. For example, employees can specifically pick plans where their existing doctor is in-network. Employees also have the option of maintaining the same plan year after year or upgrading their coverage based on changes in their health.

A simple and easy-to-use benefits platform improves transparency and visibility for employees. That translates to better employee satisfaction rates and an alluring benefits package for potential new hires.

Freeing Up Time to Focus on the Company's Top Priorities

Free of the time-constraints that come with renewing traditional group health plans, HR teams can spend their working hours developing plans and programs that will more directly contribute to company revenue.

Turnover is also a costly business for U.S. companies. With more time to bolster retention rates, HR teams can reduce that expense for their employers.

Human resources may also have an expanded budget thanks to the more affordable premiums of ICHRAs. Those supplemental dollars could go toward new hiring and training programs that will bring in top talent. In 2020, consulting firm Deloitte stated that “companies with high-maturity talent acquisition functions have 18% higher revenues and 30% greater profitability per employee.”

In today's competitive labor market and uncertain economy, a digital benefits platform offering employees more plan options and significant cost and time savings for companies has never been more essential.

After helping launch SureCo as a co-founder, Matthew Kim grew into his role as Chief Executive Officer in a non-traditional way. Unlike many of his professional peers, Matthew began his career in insurance sales at HealthMarkets Inc, a Blackstone Group Company. He also built and led his own healthcare agencies prior to his current iteration of SureCo. A CEO with an open-door policy, Matthew has no qualms about rolling up his sleeves and getting in the trenches. He works closely with every department across SureCo, helping support, leverage, and advance our products and mission.

Would you like to comment?

There’s more opportunity to drive higher employee engagement rates, and according to a 2022 Gallup poll, businesses with high employee engagement have 23% higher profitability.