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Micah Fairchild The Top 5 "Must-Haves" for Benefits Administration Software

4 stars Average rating: 4 (from 40 votes)
 By Micah Fairchild

The Benefits of Benefits Administration Software

Making sure employees are paid and provided benefits; those have traditionally been the "core" tasks of Human Resource departments the world over. As such, while the tasks of driving strategic initiatives and providing organizational insight are increasingly taking up a larger portion of the HR plate, Payroll and Benefits Administration remain an ever-present challenge that companies have to contend with. In a recent Aberdeen study in fact, 76% of organizations are re-focusing their gaze on those core human resource functions as a cost-controlling measure and as a business imperative. Yet in these re-focusing efforts, organizations face a difficult set of choices: resolve to keep the process in-house; outsource the process; or use variants of HR software to deliver the process. Nowhere is this more applicable or important as in the process of administering benefits.

Is Benefits Software the Answer?

For most, if not all organizations, keeping the business process of Benefits Administration in-house is not a viable option. Largely the reason for this has to do with the overwhelming amount of time, resources, and expertise needed to run even a minimally effective (let alone efficient) operation. Likewise, for some organizations outsourcing the process of Benefits Administration may not be a workable solution either—due to negative perceptions, change management concerns, or stability questions that surround the outsourcing industry as a whole. From an options standpoint then, companies have little choice left then to look to the ever-increasing field of Benefits Administration software vendors.

But where to start? Automation of the process is one thing, but employee benefits are an attraction/retention issue; are rife with compliance concerns; and have considerable tax implications for mistakes. Further, what "benefits" are actually needed? What benefits software solution will best capture and deliver on the needs of both the organization and its employees? Never fear, this benefits administration "must-have" guide will help to answer those questions and put some much-needed clarity into the HR selection process for your employee benefits software.

Benefits Software Must-Have # 1: Event Management

Though open-enrollment is the major "event" that often drives the need for benefits software, numerous other events (e.g. childbirth, retirements, terminations, etc.) throughout the employment lifecycle are just as important. As such, a must-have for any benefits software solution is the ability to manage and analyze changes for each specific event. Look for benefits administration software that allows for:

  • Open Enrollment approvals and activations en masse
  • Open Enrollment-specific and tailored communications (both scheduled and ad hoc)
  • Event creation
  • Approval/Activation configuration
  • Notification/Process configuration
  • Passive event management

Benefits Software Must-Have # 2: Paid-Time-Off (PTO) Management

Regardless of whatever current HR system is in a place at a given organization, allocating and tracking sick, vacation, and personal time off is typically a major part of benefits administration. As such, the necessity for managing this function is readily apparent for almost all organizations. However, public sector organizations are in particular need of this solution due to the myriad forms of PTO used (e.g. Community Service, Adverse Weather, etc.) that go above and beyond general PTO banks.

Benefits Software Must-Have # 3: Compliance Management

From COBRA to HIPAA, from SOX (Sarbanes-Oxley) to FMLA (Family Medical Leave Act), the list of regulatory hurdles that organizations face in the arena of benefits administration seems to be growing by the minute. Largely this is because the function of benefits administration has become a "catch-all", dealing with medical mandates, financial rules, labor laws, and other compliance-driven activities. As such, no other area within an organization is as legally exposed and no other area needs to be watched as carefully to mitigate risk. Benefits Administration Software can not only relieve the burden of these transactions, but can also (thanks to economies of scale) dedicate resources to staying abreast of any regulations that could impact the organization.

Benefits Software Must-Have # 4: Investment & Retirement Management

One of the quickest ways to rationally engage an employee is to provide him or her with resources that deal with financial security and show that the company sees the employee as a long term investment. On the flip-side of that coin however, organizations face a serious burden given that company investment and retirement programs connect into numerous (and often complex) financial processes, especially when considering stock options, matching contributions, etc. Both of these facets contribute to why investment and retirement management is a must-have for any Benefits Administration Software solution. When considering options, look for solutions that can truly provide flexibility in plan designs, investments, and organization/employee involvement while still being effective.

Benefits Software Must-Have # 5: Payroll Process Integration

Though it should go without saying, benefits software should always be able to integrate with a company's payroll software solution. Not only will this integration save time and resources from duplicate data entry, but many benefit functions have direct bearings on employee take-home pay (e.g. pre-tax Health Savings Accounts, 401K contributions, etc.).

Special Considerations for Your Benefits Software

In looking at potential "benefits" solutions, several considerations should be noted. Namely, while negative connotations do still affect outsourcing, few outsourced business processes are as mature as those for Benefits Administration. With companies such as Fidelity, ADP, Mercer, and many other well-established vendors involved in Benefits Administration Outsourcing, far less risk exists today for any organizations that are interested in the outsourced option (In fact, a recent study by HighRoads found that nearly 65% of organizations choose outsourcing for some type of HR business process).

Also deserving consideration—organizations with operations outside of the U.S. should pay careful attention to the organization's actual responsibility and role in benefits administration as it can vary widely country to country.

Bottom-Line for Benefits Administration Software

If, after due consideration of other options, the best option for your organization is to partner up with a Benefits Administration software vendor, the above "must-haves" will help determine exactly which vendor solutions should be short-listed for further and more detailed evaluation. While benefits administration software will undoubtedly provide a more straightforward process and cut costs significantly (over manual processing), the true organizational benefit (all puns intended) to be realized is a more productive and loyal workforce. End

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From COBRA to HIPAA, from SOX (Sarbanes-Oxley) to FMLA (Family Medical Leave Act), the list of regulatory hurdles that organizations face in the arena of benefits administration seems to be growing by the minute."

 

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