Why They Happen and How to Cure Them!

Employee benefits are a crucial asset for employees and employers alike. When you offer benefits, it demonstrates a long-term investment in your staff and provides crucial services that employees and their families may not be able to afford on their own. That’s why health, dental, life, disability, retirement and/or other employee benefits can attract and retain top-tier talent, helping your company to grow and thrive.

Benefits packages are essential to any company’s relationship with its staff, and they encourage positive ventures and commitment to the company. Taking this all into consideration, it’s really too bad that processing the billing of employee benefits is such a drag. 

Why Is It So Difficult to Correctly Bill and Manage Employee Benefits Packages?

A number of reasons contribute to why billing and managing employee benefits packages are so difficult, and the blame really falls on all parties involved. Between the employer, insurance provider(s), employees and the technology at their disposal, billing becomes a nearly impossible task to streamline. 

The whole process becomes especially complicated when a business offers insurance benefits from more than one insurance provider. It just puts too many hands in the pot and further complicates an already difficult process.

The Root of the Problem

The main issue with employee benefits billing resides in the current nightmare that is group billing reconciliation: in other words, managing and keeping accurate records of HR discrepancies between the benefits’ payment cycles and the current enrollment records. 

The Employer

Employers want to pay only what they owe to insurance providers, and employee records are almost never consistent from month to month for large corporate entities. New staff is hired, others are terminated or resign, and other employees go through big life changes (marriage, children, disability, retirement, etc.) and need to change benefit groups. 

Other major discrepancies that complicate the process for employers are:

• How employee benefits are paid
• The timeline for payroll
• The timeline for carrier dues
• Number of insurance carriers involved with the company
• Whether all the carriers bill on the same timeline
• Whether all carriers use similar billing methods
• Communication between all current carriers, the HR department/the employer, and the employees (a.k.a. the consumers)

The list goes on and on from there. Bottom line is that employers seek to make group billing reconciliation more efficient and save them from wasting unnecessary time, money, and resources. Instead, they would rather redirect these resources towards a more productive means to further their business goals.  

The Insurance Providers

Insurance providers typically hold most of the power when it comes to group billing reconciliation. They send invoices for the benefits they offer to the company, and the client has to pay them. 

However, it’s always too late when there is a change in employee statuses on the client side. The invoice is already sent for that month, so carriers can’t adjust the invoice until after it’s issued. This leaves employers frustrated, requiring their HR department to collect and document all the changes in the enrollment records during that payment cycle and attempt to reconcile the adjustments from the current invoice. 

However, insurance providers almost always defer adjustments from the current month and promise to tack it on to the next month’s invoice. This method allows carriers to:

• Simplify the process for their back-room workers 
• Prevent constant backlogs in their operations
• Continue to work and provide services to their hundreds of other clients (who will be frustrated by the same billing issues!) 
• Push the responsibility for documenting the adjustments on the client
• And maximize productivity and efficiency on their end

This sort of mindset may have worked at one time, but it actually compromises many functions and operations of insurance providers:

• If the adjustments aren’t tracked properly, then accurate payments may not be made to the carrier by the client
• Poor communication and a lack of a mutual business relationship may cost carriers their contract with the client
• Employers may refuse to pay until the adjustments for the pay cycle are accounted for in the invoice
• Forced reconciliation actions by the client will just create more work and act counterintuitive to the insurance provider’s current billing model

At this point, it starts to become obvious how the whole billing process for employee benefits can get a little messy. And without a willing cooperation from both the insurer and employer, it won’t be possible to achieve a meaningful solution to this problem. 

Technology

Technology is also a large part of the reason group billing reconciliation has been so difficult. Until recently, HR departments from the client couldn’t just seamlessly share their data with the carrier’s financial department. Adjustments were simply called in, emailed or attached via a sticky note to the original invoice. 

Current database and accounting programs couldn’t communicate to transfer all changes in employee statues in one fell swoop. Rather, HR would have to connect with each and every department of the company to verify the right changes were made and were consistent to the current enrollment status of the business. This creates an incoherent series of communications that places an unnecessary burden on HR accountants and benefits administrators who always seem behind in their work, creates greater error for inconstancies and inaccuracies in enrollment records and produces significant waste in productivity. 

The irony is that this technological issue is an old one. Clients and carriers can now overcome a lot of these efficiency problems through a comprehensive cloud-based platform. But we’ll get to that in a bit.

The Employees

When comparing the three aforementioned parties with group benefit billing and reconciliation, employees seem to have a small stake in what can be done to rectify these issues. And this is part of the problem. 

Too often, the employee has to rely on their employer (or a designated claims representative/benefits administrator) to manage, collect, or inquire about their benefits package. Employees are left out of the loop and are often left helpless at times while the company tries to work and communicate with the insurance provider. 

This creates further strain on the middle man (the employer) at times when the employee can take charge of certain situations. 

What Steps Can We Take to Make Group Billing Reconciliation Easier?

By taking a step back and observing all that’s involved in employee benefits administration and invoice reconciliation, the only answer seems to be a complete overhaul of the systems currently in place. This is a HUGE and intimidating prospect to consider. 

However, a greater number of large employer groups are sending RFPs out for insurers who can demonstrate a standardized billing and enrollment system that will streamline the billing process. And in order to compete with other insurers and rake in those big client groups, insurers have no choice but to comply. 

The Move Forward to Consolidated Billing Systems

Consolidated billing systems are the first wave of changes being put forward to streamline benefits administration processes. Also referred to as single-point billing, this system collects the dues of all insurance providers and consolidates it into one comprehensive invoice for the employer group. 

This effectively reduces the amount of waste in managing various finance documents and can help ensure that all benefit providers are getting paid what they owe. Consolidated billing is often a part of a larger online portal for benefits administration where clients and carriers can allocate, share, revise, and manage their enrollment records and benefit packages. We’ll touch on this more below. 

Shifting Benefits Administration Toward a Better Customer Experience

The next big change towards improving benefits administration is by altering the platform in which it is done. Insurers used to communicate and do business with clients in a way that was “me first and you second.” 

Employer groups now demand a more mutual relationship with benefits carriers. They’re asking for more control through an online group-to-provider communication system where they can more directly manage their benefits administration processes and help minimize reconciliation procedures.

Insurers, in light of this new trend, are now shifting their business models to embrace a marketplace that places more power in the hands of consumers—something that was unheard of until the last couple decades. 

Installing a New Online Portal for Comprehensive Benefits Billing and Reconciliation Management

And finally, the largest influence in standardizing and streamlining employee benefits billing is installing a cloud-based system for comprehensive benefits administration. This system includes a means to reduce and/or simplify the billing and reconciling of invoices between clients and providers. 

This system works by dumping enrollment records, benefit administration files, relevant employee and financial data, and other relevant data into one platform that everyone can access. By consolidating everything related to benefits administration into one cloud-based platform, employers are able to:

• Consolidate benefits packages into one all-inclusive invoice
• Be able to manage and keep a electronic paper trail for tax and audit purposes
• Input changes in enrollment records in real-time for insurance and benefit providers and help curb the need to reconcile invoices
• Communicate directly and more effectively with insurers in benefits administration procedures, policy, and costs
• Make adjustments to invoices as they come in and deliver them in a way that deters misunderstanding, inaccuracies and exploitation on either side
• AND MORE!

For insurers, this platform will:

• Limit the resources needed to manage the reconciliation process
• Encourage more forward and frequent communication with the client
• Have access to the same enrollment data that the client has for their employee benefits packages
• Keep accurate records on their end as they work with tens to hundreds to thousands of other client groups
• Simplify and automate the billing process 
• AND MORE!

This system is the means to curing the headaches known as employee benefits billing, benefits administration, and invoice reconciliation. 

BenefitSimply Leads the Way for Your Business in Consolidated Employee Benefits Billing

BenefitSimply is the leading benefits administration company for clients searching for a comprehensive solution to their billing and invoice reconciliation woes. We already have gained the trust of over 2500 employer groups and are more than capable of adding your business to our client network. 

BenefitSimply makes benefits administration easy by consolidating all your insurance and benefits packages into one invoice. We keep it simple and give you and your employees the power to manage your benefits and have a direct line to us whenever you need it. 

We Connect Employers and Agents through Shared Services and an Online Benefits Administration System

Our shared services offered through our online benefits administration system make it easy for your HR department to communicate changes in your enrollment records so that we can implement adjustments to your invoice before it’s delivered to your inbox. 

Everything stays electronic on a cloud-based platform that your company can rely on. It does almost all the record keeping for you and provides an accurate and reliable digital paper trail that you can pull from at any time. 

Take Control with Consolidated Enrollment and a Committed Customer Support Network

Our benefits administration platform also consolidates your enrollment records from your various departments into an organized database for you to use. And with a committed customer support network that can be accessed via the web, email, or over the phone, you and your employees can always stay informed on the latest inquires about your billing and benefits package.  

Connect with BenefitSimply Today!

For over 25 years, we have worked with employers, insurance carriers, vendors and brokers to benefit employees. BenefitSimply was formed to help employees better understand and utilize employee benefits, while easing administration and controlling costs for employers. When you choose BenefitSimply you gain a partner with experience; from small employers to Fortune 500 companies.

BenefitSimply’s Mission & Purpose: The BenefitSimply purpose is to positively impact people. Our mission is to benefit the physical, financial, and spiritual well-being of those we serve. So don’t hesitate to upgrade your employee benefits billing process with our streamlined and standardized system. 

As it already stands, your changing enrollment records will only continue to add strain to your billing process. And we both know that your billing will only stay accurate for a limited time. In fact, in the time it took you to read this article one of our clients has already terminated two of their employees and hired two more. Not to mention that all the employees from last month just now got enrolled in their benefits. 

You’ve seen and experienced the problem. BenefitSimply provides the solution. Contact us today!

Keywords: single point billing, consolidated billing, employee benefits billing, invoice reconciliation, benefits administration, employee benefits administration, enrollment technology