Clinging to paper-based administration hinders potential wellness savings

All those reams of paper in your office — documents to enroll new hires in benefit plans, disenroll ineligible dependents and the like — are costing your company money. A lot of money.

According to a new study released today from bswift, an HR solution software and service provider, 22% of companies have not automated the new hire enrollment process and only half of employers have an automated dependent “age out” process for cancelling coverage. Sticking with paper-based processes is costing organizations $1 million for a 4,400 employee company (or $19.07 per employee per month) that could be saved by switching to automation, bswift concludes.

The slow shift to automation among these employers, bswift CEO Rich Gallun says, “comes down to two reasons: inertia and lack of management attention and budget. People get used to doing things a certain way and many benefits people believe when they personally process the administrative paperwork well they are doing a good job, so rather than automating the process they continue to do it ‘like it’s always been done.’”

However, Gallun says that for the “laggards,” the switch to automating HR/benefits administration “it’s only a matter of time, because benefits automation is becoming a standard way of doing business.”

It also can help employers maximize the savings from wellness programs, which according to bswift are in place at 100% of companies with more than 500 employees. The study shows that among these employers, 62% use health risk assessments and biometric screenings.

“HRAs in themselves do very little to reduce health care costs or change employee behavior, but they are a step to identifying health conditions and risk factors,” Gallun says. “Biometrics are even more accurate in identifying health conditions and risk factors.”

And more companies are utilizing wellness incentives for those screenings — 65% use premium discounts or credits — compared to a year ago by almost 20%.

“A typical wellness incentive today is a … credit of $10 per employee per pay period if he or she completes biometric testing once a year,” Gallun says. Alternatively, employers charge the employee a surcharge of $10 per pay period if (s)he fails to take the tests. “More aggressive companies are charging surcharges or offering credits based on the employee’s ability to manage controllable risk factors, like blood pressure, within acceptable levels.”

While only 88% of small companies (less than 500 employees) offer wellness programs and lag behind larger companies, Gallun doesn’t think that will be the case for long.

“Smaller companies just haven’t had the resources, time and motivation to invest in wellness programs, because these programs and incentives require staff time and money to get started,” he says. “But with both automation and wellness, the trend is moving ‘down market’ so that we’re likely to see more automation and wellness in smaller companies as well over the next few years.”