As the definition and number of benefits have changed, HR executives are spending more time than ever on administrative tasks. New centralized solutions can help free up time and offer better benefits to your employees.
Historically, employees have enrolled in medical insurance, life insurance and other benefits once a year during annual open enrollment—except for qualifying life events, such as starting a new job, having a baby or adopting a child. But more recently, how and when employees choose benefits has changed as employers add myriad voluntary benefits, such as auto insurance, pet insurance and financial wellness programs. Indeed, recent data from Aon found that the number of employers offering voluntary benefits increased 27% during the previous enrollment period. As a result, employees are moving on and off plans more quickly than ever, leaving employers to administer benefits outside of open enrollment season, nearly 365 days a year.
Although this is a great benefit to employees, the burden for HR and payroll teams administering benefits has consequently ballooned — so much so that HR professionals now spend nearly 73% of their time on administrative activities, according to one survey. This is likely due to the need to engage many new vendors on a weekly basis as they assess new voluntary benefits while also managing existing benefits and payments. For example, if an employee goes on leave, employers need to ensure they still pay premiums to keep their benefits active, and ensure they update payroll and carriers on any eligibility changes. With benefits administration consuming many company resources, more centralized solutions are starting to crop up.
This type of platform solution offers employers the following four key benefits:
1. The Ability to Offer More Benefits
The addition of voluntary benefits has been a win-win for both employers and employees. Although adding these benefits has had little to no budgetary impact for employers, there has been an increased demand from those employers to offer lifestyle benefits that fit their workforces’ needs. The pandemic brought benefits such as identity theft protection for remote workers and supplemental health insurance (including accident and critical-illness coverage) to the forefront, according to Aon’s survey of employers.
But having more options also means HR is spending more time and resources on assessing new benefits, selecting the right vendors and then administering these benefits. To help handle the burden, some employers are turning to a third party to provide a centralized benefits platform. These vendors have purchasing power to get best-in-class pricing for many benefits that would be more expensive and time consuming for an individual employer to select and purchase à la carte.
2. Time Savings for HR
Perhaps the biggest benefit of a centralized solution, though, is that it frees up HR departments for more strategic recruiting and employment-retention tasks. On the front end, HR teams don’t have to spend time researching and negotiating rates for specific benefits. On the back end, solutions providers such as Aon take over all the monthly premium reconciliation and bill payments so HR personnel no longer need to send out and track countless payments to an array of vendors every month.
3. Keeping Pace With Trends
Another worthwhile benefit of using a centralized solutions provider is that it tracks emerging trends and can quickly adapt to the market to bring popular benefits to the workforce. Certain companies also use back-end consumer analytics tools to measure the value associated with a given benefit so employers can adjust their offerings. For instance, if an employer offers identity theft insurance, it can track how that benefit is performing and how much is being driven to the employee by way of claim value. These analytics also allow employers to benchmark against competitors in their industry. In addition, a centralized solution helps employers manage employees who are on leave to ensure the necessary voluntary-benefit deductions are made to keep policies in place.
4. An Employee-Centric Approach That’s Easy to Use
With a centralized solution, employees experience a simple and streamlined approach to enrolling in voluntary benefits. Employees can go to a virtual, central location to enroll in and review their options, saving them time. They can also opt to have their benefits options offered through an app. Providing cutting-edge benefits that employees seek, and in the manner they wish to access these benefits, helps companies recruit and retain top employees.
By offering a broader variety of benefits through a third-party vendor, employers can help attract and retain top talent, while also freeing up their HR teams to focus on higher-value work. Doing this can create better work environments not only for HR teams but also for employees who value a centralized, streamlined approach.
 “Voluntary Benefit Offerings,” Aon