Outsourcing to the Cloud: The End of Painful Benefits Administration

By PayNorthwest in collaboration with EverythingBenefits

Benefits administration is taking its toll on small to mid-sized businesses. The figures speak for themselves – according to CFO.com, the average annual cost for human resources (HR) to manually enroll an employee in a benefit plan is $109.48, which amounts to an annual expense of over $3,000 for a company of 30 employees. A survey of employer-sponsored health benefits conducted by Kaiser and Health Research & Educational Trust (HRET) reveals that employer benefits premiums have increased by 61% while employee contributions for family coverage have risen by 83% over the past 10 years.

Average Annual Health Insurance Premiums & Worker Contributions for Family Coverage (2005-2015)Benefits administration cost diagram

Source: Kaiser / HRET Survey of Employer-sponsored Health Benefits (2004-2014)

We all know the drawbacks of manual benefits enrollment and administration. Many HR professionals still prepare and print plan details, benefits information, and enrollment forms before distributing them to their employees. This involves a slew of enrollment communications, meetings, and deadline reminders, enrollment form collection by email, hand, or mail, as well as tracking analytics – who’s enrolled vs. waived vs. not responded, what plans are enrolled in, etc. Not to mention the high risk of human error when enrollment data is manually keyed in on the carrier site or faxed to the benefits broker. Forms need to be faxed to the payroll company for deduction set-up after calculating deductions. Benefits enrollment paperwork needs to be filed and stored on premise in employee files as well as updated to accommodate employees’ life change events. This list of tasks never ends.

So what are employers to do to alleviate the pain? Outsourcing to the cloud can provide immediate relief with regards to cost, labor, and time. Partnering with an outsourcing company on a cloud-based platform offers novel ways to connect your HRIS solution to benefits carriers and brokers while automating manual enrollment processes. Your HR department will spend less time sifting through paperwork and become more proactive in satisfying your compliance requirements. The time it takes to process open enrollment will be reduced, the costs of producing and storing paper documents eliminated, and the risk of human errors mitigated. Your employees – including your HR professionals – will overall be a lot happier. In summary, cloud-based outsourcing will enable your business to:

  • Drive employee accountability
  • Collect missing information
  • Pinpoint data errors proactively
  • Track historical transactions
  • Drive transparency and visibility
  • Simplify and automate

For any questions about how cloud-based outsourcing can help relieve your HR department and streamline your benefits administration processes, please contact a PayNorthwest specialist toll-free at +1.866.729.6920.

Our sincere thanks to our business partner EverythingBenefits for their contribution to this blog post.