5 Things to Consider When Choosing A New Benefits Admin Vendor or Evaluating Your Incumbent Vendor
Decisions, decisions, decisions. Why do you have to make so many critical decisions in your employment role? Can it never be easy? Isn’t there a place you can go to guide you and answer your most pressing questions when making significant decisions? Well, today I have good news for you because this piece will make it easier for you to make one of the most consequential decisions of your professional career--selecting a new benefits administration vendor. Wait, how did you know a new benefits administration vendor was in the offering? Quick answer: it is always in the offering because almost all benefits administration vendor relationships involve three-year agreements meaning you have to always be on guard for a prospective search for a new vendor as the term with your incumbent vendor expires.
Now that we have that out of the way, let us examine the five things you should be considering when searching for a new benefits administration vendor, or evaluating your current vendor. First among those things for you to consider is whether the benefits administration vendor is the same entity as your benefits consultant. This may sound glib, but when those two entities are not the same organization your company is losing vast synergies that can be gleamed from having the same entity perform the tasks. Both economic and administrative efficiencies are gained when the same group is your benefits consultant and your benefits administration vendor. When the groups are disparate, they often times don’t effectively communicate with one another such that seemingly simple tasks like redesigning efficient benefit plans is left to suffer. When the same group is your benefits administration vendor and consultant, all advantages weigh in your organization’s favor.
The second element to consider is the employee experience when in the enrollment environment. Do employees have access to decision support tools? Do your employees have access to online literature and videos to assist in the challenging enrollment experience? Do they have the ability to use online calculators and estimators to determine appropriate levels of certain benefits such as life and disability insurance? Without these basic resources, employees will become unengaged during the process, overly rely on you and your team to assist them when enrolling and very likely disvalue the very expensive benefits your company offers.
The third factor to consider is the employee experience when outside the enrollment environment. That is, do your employees have access to outside support, other than you and your team, when seeking answers to important benefit and insurance questions? There two basic types of employee benefit service centers when discussing benefits administration platforms—rudimentary and complex. Rudimentary employee service centers are service centers that exist to help employees find passwords and navigate the online platform, and that is about the extent of their value. Complex employee service centers are staffed with licensed benefit counselors so that employees can gather real advice, enroll in their benefits and stop causing you and your team to abandon your “day jobs” in favor of acting as a call center. In effect, complex employee service centers act as an extension of your team.
Fourth among the components to consider is the existence of artificial intelligence. Five years ago, this element would have been a non-starter. Times have changed to the extent that employees expect artificial intelligence to be a part of their online benefits enrollment experience because they are accustomed to AI with their retail shopping experiences. Just about every online shopping experience now involves some form of AI and shopping for benefits should not be different.
Finally, and likely most importantly, take into account the cost for the benefits administration vendor and the platform your company engages with. If your organization is cost-conscious, the axiom of you get what you pay for rears its ugly head. By taking an overly frugal approach with a benefits administration vendor, your employees will lose out on resources such as decision support and online educational tools and a robust, complex employee service center. This in turn will lead to unengaged employees and a total lack of appreciation for the benefit program offered by your employer. In addition, when seeking a new benefits administration vendor, or simply evaluating your incumbent vendor, ask for financial modeling exhibiting the gross cost of the platform. That is, ensure your cost estimate can take into account any savings generated by the platform and vendor. By simply asking for the per employee per month fee, you may be shortchanging your eventual analysis.
Searching for a new benefits administration vendor, or evaluating the efficacy of your current vendor, does not have to be a Sisyphean task. Indeed, if you follow the five essentials outlined above you will be able to rest easy in knowing you picked the best vendor for your organization and its employees causing your employees to value the benefits offered.