Benefits administration is one of the most common elements of an HRIS solution. For some companies, benefits administration is the main reason for purchasing an HRIS. In fact, many companies opt to purchase and install HR software every year right before open enrollment time because of the potential cost and time savings that benefits administration features can provide.
Companies may quickly see a favorable ROI on a new HRIS during benefits open enrollment.
When an HRIS with benefits administration functionality is introduced into an organization, it allows HR and benefits professionals to take the complex, time-consuming process of benefits enrollment and administration and automate it. While HR and benefits professionals may still need to provide assistance for the processes, automation can take much of the burden away while empowering employees.
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Benefits Administration Customization
Most HRIS solutions offer customization options for benefits open enrollment and management. This allows employers to set up rules like auto-enroll, tax percentages, dependent types, and benefits tiers. The benefits available and the permissions to make changes may also be customized by employee job code.
New Hire, Open Enrollment, and Life Events
Paper enrollment forms are time consuming and hardly the way HR Professionals should be spending their time. That’s why many HRIS vendors offer electronic enrollment through their benefits modules. Some HRIS solutions even generate emails to alert employees that it’s time for benefits enrollment. The system then guides them through the enrollment process and has them elect or waive benefits.
Permission levels make it possible for employees to only see what they are eligible for. For example, employees will be eligible for all benefits as new hires but may only be able to change certain benefits during periods such as open enrollment or if they experience a qualifying life event. There will only be options to take actions that are available when employees log on.
Employee Self-Service and Benefits
When employee self-service portals are linked to benefits through the HRIS, employees have greater control over and access to their own information. This reduces the need for employees to connect with HR professionals in order to find out information about their insurance plans, 401(k) plans, pension plans, and other information.
Employees can also make changes to their information as those changes occur.
If a qualifying life event such as a marriage or birth of a child occurs, employees can immediately initiate the changes through the HRIS self service portal. These changes will then filter into the benefits administration module and open up new insurance options. Depending on how the HRIS is set up, initiating life changes may also automatically prompt changes to dependency status and other relevant areas.
Connections to Benefit Carriers
When benefits administration is handled manually, it can be a monumental task to move all employee data regarding benefits selections into the benefit carrier systems so that coverage can begin and cards can be generated. Using HRIS for benefits administration can simplify this process, too.
Many vendors offer carrier connectivity that allows Electronic Data Interchange, or EDI, between the HRIS and benefit providers. The EDI will occur automatically on a set basis like once or twice per week depending on the size of the organization and the volume of enrollments, cancellations, and changes that occur during a particular period.
Carrier connections can dramatically decrease the number of human keying errors and most of all help you to focus on the parts of your job that bring value to your organization. The amount of time saved by automating data transfers can be substantial, which could help to save on labor costs and boost productivity.
Many HRIS vendors offer reporting through standardized or customizable benefits reports that help to streamline the benefits audit process. Whether you need to run a report to detect the number of benefits changes during a particular payroll period or audit the monthly medical insurance bill to make sure you are not getting double charge, benefits reporting will assist you.
Being able to quickly and easily generate and share reports related to benefits management can assist with informed decision making and ease compliance worries.
When benefits enrollment is done manually, it can be very difficult to keep employee information secure. Forms must be filled out with employees’ social security numbers, addresses, and other personal information and it can be tough to keep all of those forms away from the eyes of other employees. An HRIS keeps personal information secure by only allowing employees to see data that is relevant to them.
When employees submit benefits requests for approval, every step of the process is traceable and viewable by HR and other relevant entities within the organization. Any decisions or communications initiated by the benefits provider are accessible by the employee and those in charge at the organization.
This type of transparency allows employees to anticipate payroll deduction amounts and employers to view benefits contribution requirements. Since this information is easy to find and review, HR may also have an easier time spotting errors and working through any misunderstandings with employees.
Benefits management is a difficult task that an HRIS can help to simplify. By automating benefits administration using an HRIS, your company may save time while reducing the number of errors. HR professions, employees, and the organization as a whole may benefit greatly from this shift.
Authored By: Dave Rietsema