Employee benefits are one of the areas that require significant oversight in order to identify and mitigate risk. For example, you need to ensure your policies comply with a wide range of regulations and that your communications meet industry best practices. But there may be a hole in your understanding: the lag between when coverage events are reported and when that information is communicated to benefits carriers. Let's take a closer look at this important issue and the solution that may close the information gap.
How manual benefits programs cause delays
Many companies still have a partially manual or paper-based benefits enrollment and management process. Staff are handed printouts, which they fill out and return to managers, who then hand them off to human resources (“HR”). HR is responsible for data entry and sometimes even for mailing the correct forms to the insurance companies. Even with partial automation, important coverage data can be lost or delayed somewhere in the process.
What happens when data gets lost
At first glance, most issues caused by a delay may seem like an inconvenience—not a major business issue. However, there are many instances where delayed changes to coverage could be a serious challenge for both your business and employees. What happens if an employee or one of their family members becomes injured or dies while the data is still being moved along the approval process? Medical insurance coverage might not be available for treatment. Or an individual's life insurance policy may be on hold due to confusion about beneficiaries. Who is liable for the costs incurred? Even if your company is not declared liable, who bears the court costs? Miscommunications and delays can create expensive legal issues and damage trust and relationships with valuable employees.
A solution: direct carrier connections
In situations like these, HR data automation helps, but it's not enough. You should work with an HR firm that has established direct-data connections with their benefits carriers. What this means in simple terms is that when information is updated in the HR system, it's quickly automated in the carriers' systems as well. Adding a new spouse or dependent, updating mailing addresses, changing policies, and registering other life events becomes nearly instantaneous.
Direct carrier data connections can help ensure that your business isn't exposed to risk when communicating benefits information. They can also give your employees peace of mind that their coverage will take effect in a timely fashion. Together, they're important reasons to address the hole in your employee benefits process and make it whole.