Benefits Administration Outsourcing

How to Find the Right Path for Your Business

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Introduction

Human Resource executives face a never-ending variety of evolving and often overwhelming challenges when it comes to their benefits administration and enrollment. As employee benefits become increasingly more complex, business-critical, and subject to regulatory compliance requirements, employers must accurately assess their team’s capacity when it comes to managing this important aspect of their success.

Whether you are considering outsourcing your benefits administration and enrollment for the first time, or you’re a seasoned outsourcer searching for a better-fitting technology solution, this At-A-Glance will take you through common considerations and best practices to find the right path for your business and help you make benefits matter every day.

Consider your responsibilities and goals alongside your current capabilities. Is the status quo meeting your expectations and your employees’ demands? Benefits move fast – so be sure to think one, three, and even five or more years down the line. Is your benefits team prepared to continue managing all future tasks as you do today – even as your organization evolves?

Insourcing: In-House Administration

Often, businesses that insource their benefits administration do so because they do not feel comfortable relying on a third-party to manage and automate such crucial functions. This discomfort is understandable: Employee benefits remain high-visibility stakes all year round, and any errors in your benefits data and execution can spell disaster for employees and quickly diminish confidence in your HR team.

Given this perspective, it’s no surprise that insourced organizations include those that have never-before outsourced their benefits administration, as well as those that suffered with a previous outsourcing experience due to a subpar solution or ill-fitting vendor.

Some decision-makers also believe that insourcing is more cost-efficient than adopting an outsourced solution. However, insourcing presents its own costs, risks, and inefficiencies that may not be immediately apparent – while the right outsourcing partner will minimize risks, eliminate inefficiencies, and provide solutions that drive high returns on your investment.

In fact, one report found that HR teams spend 25% less and utilize 30% less labor than their peers when aided by the right processes and technology.1

Insourcing requires a continual internal investment in technology development, ongoing training in the use of this technology, and constant vigilance and legal expertise regarding regulatory compliance and changing requirements. For a best-in-class outsourcing provider, benefits enrollment and administration is the sole focus.

When insourced, the requirements of benefits administration can easily overwhelm teams that are often confined by strict budgets, the availability of outside departments (such as IT), and limited time. Eventually, these demands can drain resources and drag HR’s focus away from other important priorities, leave employees feeling dissatisfied and unsupported, and even lead to major compliance risks that increase the risk of hefty penalties.

If your benefits administration is currently insourced, or if you are thinking of moving processes back in-house, take time to honestly evaluate your team’s bandwidth and consider the true costs and impacts of insourcing on you, your team, and your employees.

Co-Sourcing: A Collaborative Middle-Ground

Co-sourcing is a collaborative approach to benefits administration, where select processes remain in-house (most commonly, call center services), while the remaining responsibilities are outsourced to a trusted provider.

This approach enables organizations to minimize the impact of burdensome administrative tasks – such as enrollment and regulatory compliance – while maintaining control over more employee-facing services. Co-sourced clients may have reservations about how outsourcing might affect employees’ perceptions of their company culture and HR’s effectiveness.

While protecting your company culture is a valid concern, you should know that outsourcing does not have to mean relinquishing control of your culture or lowering your service standards. In fact, a proven outsourcing partner will actually enrich the way employees view their benefits and your company’s commitment to their wellbeing.  More »

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About Empyrean
Empyrean manages employee health and welfare benefits programs, combining the industry’s most modern, client adaptive, and configurable benefits technology platform with expert, responsive service to deliver Hi-Touch Benefits Administration. With Empyrean, you can drive customized strategies, increase employee engagement, achieve ACA compliance and more – all on one secure system.

Talk to one of our experts and learn how Empyrean can help your business.