It can be complicated for HR leaders to manage increasing benefits costs while staying up to date on the latest compliance regulations. And in many cases, when benefits are managed manually, it can lead to costly errors. In fact, a study from the Aberdeen Group found that 12-15 percent of all benefits carrier billing contains errors.
Many employers waste time and risk errors manually comparing benefits invoices to a list of covered employees line by line. Rather than taking benefits reconciliation into your own hands, your team should enlist the help of an integrated hiring and payroll partner that can automate benefits reconciliation for you. Doing so will benefit your team in the following ways.
Completing manual, line by line comparison of employee benefits against benefits provider invoices each month can take hours, if not longer. And as your team grows, manual benefits reconciliation will only take more time each month. Ultimately, this takes your HR staff away from other important tasks to help the business move forward – such as hiring, onboarding and training great employees.
By instead partnering with an integrated hiring and payroll provider, you can review an automated benefits reconciliation report with each payroll run, adding back hours of productivity for your HR team.
Avoid Costly Errors
When reconciling benefits manually and line by line, it’s easy for your team to accidentally overlook critical information, which can ultimately be costly for your team. For example, if a team member quits or is terminated and the news somehow doesn’t make it to the HR team, your company might end up continuing to pay for their benefits for months – or longer.
The same goes for employee life changes. If an employee gets married, divorced or has a child, among other major life changes, their benefits coverage will likely change. But the larger your team is, the more time consuming these changes are to track. But with automated benefits reconciliation, if an employee opts to change his or her benefits, it will be seamlessly reflected in the upcoming payroll run, helping you avoid errors.
In other instances, an employee might unknowingly not pay for benefits because they’re not being deducted from his or her paycheck for one reason or another, which results in your business covering the costs. For employers without a benefits reconciliation report, these errors are time consuming to identify – if they are even identified at all – and if they’re overlooked, the mistakes end up being costly over time.
Not only are benefits reconciliation mistakes costly, but they can lead to your company facing fines, lawsuits or other compliance-related consequences. If your team faces a compliance audit and it turns out a mistake led to employees not receiving required medical coverage, for example, your team could potentially be in violation of the Affordable Care Act (ACA).
Ever-changing compliance regulations make it challenging for your team to keep up with the latest updates to ACA, paid parental leave, FMLA, COBRA and more. According to a study from Guardian Life Insurance Company, 60 percent of employers feel overwhelmed with the increased complexity of managing their benefits programs, and 70 percent struggle to keep up with evolving compliance regulations. And manual benefits reconciliation makes the whole process even more complex. An integrated hiring and payroll provider not only offers automated benefits reconciliation capabilities, but also tracks the latest compliance updates for you.
Benefits reconciliation is one of many ways partnering with an integrated hiring and payroll provider can help your team save time and money while avoiding errors. For more information on what to look for in an effective payroll provider, read our resource, “The Hireology Payroll Buyers Guide.”