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Rx for the Besieged HR Department: Benefits Administration Services

December 9, 2014  |   General
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ast_benefitsBy Robert Trobe, Crystal & Company


Human resource professionals have important roles in their organizations managing talent, improving leadership development, recruiting & staffing, and changing the culture of their organizations. Pressure remains high for HR Professionals to create more value in these areas, yet they have seen little or no increase in resources available to them. Often, the consequence is that there is less time to improve efficiency as they are preoccupied with transactional matters, rather than aligning their efforts with the overall business strategy of their organization. A solution that could improve effectiveness in critical HR functions can be found in benefits technology and benefit service centers, which could free up HR to create, plan, and implement new strategies and programs that meet the needs of their employer and employees.

The implementation of a benefits administration system, including online enrollment, communications, benefits service center, and compliance support, can free up HR staff and improve employee understanding and buy-in to the organization’s benefit program. The costs for benefits administration can be offset by certain services provided by the vendor, including and not limited to dependent eligibility verification and invoice reconciliation. These services are generally available to organizations with 200 or more employees.

The following are some important factors in selecting a specialized benefits administrator.


A quality benefits administration program has three components:

  • Enrollment Technology 

 -Online paperless enrollment

-Eligibility files to carriers

-Payroll feeds

-Mobile ready

-Easy to use

  • Employee Communications 

 -Employee Benefits Portal with all forms and plan summaries

-Benefit guides and announcement memos

-Enrollment confirmation statements

-SARs, compliance notice distribution

  • Benefit Service Center

 -Answer all employee & dependent calls and emails

-Resolve claim issues

-Provide monthly billing services

-Complete carrier invoice reconciliations

-Complete quarterly activity reports

-Perform dependent verification and audits

-Create digital personnel folders for all employees with access for HR

-Conduct COBRA administration


A full benefits administration program including all of the service elements outlined above should cost between $6 and $9 per employee per month, depending on the size of the employer. These costs can be mostly or totally offset by savings generated by:

  • Dependent Eligibility Verification and Audit— Employees sometimes claim dependents who are not eligible for coverage. Elimination of errors and ineligible dependents can save from 1%-3% of the total benefits cost.
  • Invoice Reconciliations—Carriers make mistakes and overworked HR departments often don’t have the resources to check. A quality benefits administration firm will reconcile all carrier invoices against the enrollment system and seek repayment for any errors. The savings can be substantial.

In addition to program cost savings, a quality program will enable HR staff to focus on strategic initiatives, such as implementation of consumer driven health plans and incentivized wellness programs.

How to Select a Quality Benefits Administration Service Vendor

Selection of a quality benefits administration vendor requires careful due diligence, since a poor choice can create employee dissatisfaction, compliance oversights, and unanticipated costs. Employers should create an evaluation scorecard which compares the technology platform, services, costs, and reputation of the competing companies. In addition, some vendors partner with broker/consultants which can provide extra accountability.

Will this Benefit My Company and What should I do if Interested?

Benefits administration and service support are likely to be of value to companies with 200 or more employees that do not currently have such a solution in place. For an initial assessment of the feasibility and value of such a program or for questions on this article, please contact Robert Trobe ( or 212.504-5960).

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