Out of curiosity I Googled “employee benefits administration” the other day. To my surprise, the search returned 24,500,000 results in .54 seconds. That’s a lot of benefits administration options in barely the blink of an eye.

While I’m sure there aren’t 24.5 million unique alternatives for benefits administration, there are probably hundreds of vendors available to employer groups who need assistance with annual enrollment and ongoing management.

How do you determine which of these many alternatives best meets the needs of your business and your employees? Well, the answer starts with you. Before you proceed, know thyself. Or rather, know your business.

When an organization needs to change processes or procure a new technology system, it always makes sense to start with a readiness self-assessment. Taking stock of administration needs, current assets and areas of deficiency will help the employer to avoid purchasing systems and vendor processes before they are fully ready to implement them. 

Also see: 5 things employees would rather do than enroll in benefits

Organizations with successful employee benefit administration implementations (whether it’s technology or human support provided by a vendor or a combination of both) know how to do a self-assessment. They have a good understanding of their desired end-state and they understand their team’s available bandwidth to take on a new project.

They accurately assess the level of expertise they have on staff and understand their organization’s appetite for change. They solicit and receive buy-in from all stakeholders and help each person involved understand how both the business and individual will win.

They also know the direction their organization is heading. Are they reducing staff? Are they expanding? Are they acquiring another business entity or moving operations? These are critical factors due to their potential impact on the project and the bottom line.

Company strategy is also important to consider. What’s the long-range business plan? Will the technology or business process outsourcing solution fit the business three to five years from now?

Once you complete your self-assessment and know your desired end-state, assemble criteria to help guide your conversations with different vendors. While most large businesses have professional on-staff procurement teams and formal Request for Proposal processes to solicit and review proposals, smaller organizations are left to their own devices.

If you go the path of an RFP, you can request that a proposed vendor supply you with a generic RFP document with standard question that you can then supply to all vendors who are competing for your business. This way you will ask the same questions of each vendor and can more easily compare their responses.

Also see: 20 characteristics of successful worksite wellness programs

Before distributing a generic RFP, make sure the questions address your business’s particular requirements. It’s common for an organization to personalize a standard RFP before distributing it to several vendors.

Vendor financial stability, staff experience and flexibility are key areas to review and verify with a potential partner. If you’re considering a technology platform, what kind of implementation and ongoing service and support can you expect to receive?

What happens if the system encounters issues in non-business hours during your open enrollment period? Will your vendor step in and help, or wait until Monday at 8 a.m. to answer your distress call?

I recommend visiting the vendor’s headquarters or the office location where the majority of the servicing of your organization will take place. Meeting key executives and service contacts are also crucial in determining if the vendor is going to be a cultural fit with your firm. Ask for case studies.

It is important that you select a benefits administration vendor who will be an advocate for your employees. There are many great systems and outsourcing providers that can provide cost-effective ways to streamline benefits administration and automate your transactions. While generating efficiencies and driving cost control are definitely important, it becomes more of a ticket to play when you start evaluating vendors.

Since there tends to be a large amount of vendor interaction with your employees, you want a partner who can help them understand their benefits and advocate on their behalf when they have problems. This requires a combination of a formal employee education program and ongoing support provided by an employee advocacy support center.

 If your vendor doesn’t provide both, you miss continuing opportunities to educate your employees about benefits and to help them help you control health care costs. In this age of consumerism, employee choice and the competition among businesses for talent, it is more important than ever to choose a benefits administration solution that can address the needs of employees and drive home the value of your contribution toward their health and well-being.

Health care reform has added another layer of complication to existing ERISA, HIPAA, and COBRA requirements, and government agencies are dedicating more resources to audit and enforce those regulations. Non-compliance can cost your organization major fines and penalties and even subject your HR staff, officers and executives to criminal penalties.

Your vendor should have the resources to help determine your compliance readiness and the capabilities, both human and technological, to bring your organization into line.

If not done properly, benefits administration can be an error-prone and expensive process for your business. There are many factors that go into selecting a partner to help you with annual and ongoing administration. It starts with understanding your organization’s needs and ends with selecting providers who can drive value for both you and your employees.

Andrew Brickman is director of benefits administration for Corporate Synergies, a national group employee benefits consulting firm.

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