In an era of increasing complexity in employee benefits, many organizations are finding that health and welfare (H&W) implementations are more than just an administrative task — they are a monumental challenge. Whether driven by a need to enhance the participant experience, improve compliance or simply stay competitive, implementing a new benefits administration system is no small feat. Yet, plan sponsors too often manage these projects internally without fully understanding the pitfalls they are likely to encounter.
Before selecting a benefits administrator, plan sponsors must carefully review the market to ensure they are receiving both the appropriate level of service and fair pricing. Running a vendor search every five to seven years is critical for fulfilling a plan sponsor’s fiduciary responsibility. It’s a bigger task than many plan sponsors realize, involving not only defining the scope of services, issuing a request for proposal and collecting responses, but also evaluating proposals, interviewing finalists and providing feedback to all respondents. Even if plan sponsors ultimately retain their incumbent provider, this exercise demonstrates that they’ve met their fiduciary duty by exploring competitive options.
