November 4, 2016

6 Questions to Consider Before Choosing a Benefits Administration System

Written by
Nolan Waterfall
Tags: HR

Over the last few years, we’ve seen a huge shift taking place in benefits administration systems. While paper forms and fax machines used to be the norm, there are now hundreds of ways to streamline how you manage benefits at your company. But like many other technology solutions, some are better than others. As you shop and compare products, it’s important to consider how each one aligns with your needs and objectives.

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Pay close attention to these seven key areas:

1. Features and Capabilities

Benefits administration systems come in many shapes and sizes. Some only cover benefits, while others expand into payroll, core HR, and onboarding. Typically, companies that focus on solving one particular problem will have the strongest solutions in that category.

For example, Maxwell Health focuses on the benefits administration and certain related tasks like compliance reporting, wellness, etc. This helps them maintain a very high-quality system, while integrating with other providers for peripheral HR functions. Similarly, Bamboo HR is particularly focused on “core HR” features. As a result, they have one of the best HR solutions for small and mid-size companies.  

Then again, if you’re looking for broader functionality, you might prefer an integrated HRIS (human resource information system) or HCM (human capital management) suite, which will include benefits admin as a feature of a larger platform.  

2. Integrations

Chances are, you can’t run your entire human resources operation from a single, best-of-breed benefits tool. That’s why many benefits administration systems integrate with various payroll providers and HR platforms. The question is, how does that integration actually work?

If a benefits administration tool syncs with payroll software, for example, is the communication “bidirectional,” or one-way push? Is it real-time, or does information update at scheduled intervals?

You also need to know whether the integration is plug-and-play (i.e. you enter login credentials and click a couple of buttons) or requires manual API (application program interface) configuration. APIs are the industry standard for securely connecting two system, but they do require a little work.

3. Mobile Access

According to the Pew Research Center, 72 percent of American adults now own a smartphone of some kind, up from 64 percent in 2015. With a percentage that high, we can assume people aren’t just using their phones for personal communication.

The smartphone revolution gives businesses an opportunity to extend productivity and visibility beyond the walls of the office, and benefits administration is no exception, especially when it’s part of a larger HR management platform.

A native mobile app lets employees organize and access their work and benefits information, track activity, and make adjustments from any location. That means less visits to the HR office and faster approval workflows.

4. Communication with Insurance Carriers

Benefits administration systems usually communicate with insurance carriers one of three ways. This will mostly depend on your particular carriers, what technology you use, and your maturity as a company.

Form enrollment: This is the most common way to submit enrollment for most companies under 100 employees, because it’s cheap and low-tech. To make this process as seamless as possible, some benefits administration systems auto-populate PDF forms with your employee’s information, benefits selections, etc. Of course, the forms still have to be  submitted to the carrier for processing.

Census enrollment: Census enrollment is basically a data dump from the benefits administration system to a spreadsheet, which can then be pushed to the health insurance carrier. Not all carriers accept this method, but it’s a fairly common transfer method when switching to a new provider.

EDI connection (A.K.A. “carrier feeds”): This method of data transmission is the most secure, automated, and least prone to error. If you haven’t already, as your benefits admin provider about EDI (electronic data interchange), and whether it’s available for your particular carrier(s). If it is, ask about implementation costs and timelines.

5. Customer Stories

Beyond the features and capabilities of a given solution, it’s important to look for a proven track record of success, and the best way to find that is by talking to current/past customers.  

Asking for referrals reveals two major things. First, it gives you the opportunity to hear a “real world” use case and see how the system actually works. Second, it demonstrates the vendor’s ability to serve and satisfy customers. Customers who are willing to talk to a new buyer and give a recommendation only do so if they’ve had a great experience.  

6. Implementation Process

Getting started with a benefits administration system is more complex than clicking a button and creating a username.

A full-featured benefits administration system (or HCM suite, if that’s the route you take) must be configured to your company’s needs and synced with existing data. This involves uploading current and future benefits information, payroll, employee income data, etc. You’ll also need to set up different levels of employee access, employee groups, and locations.

Before you commit to a vendor, ask what their implementation process looks like:

  • How long does it take?
  • What information are you responsible for providing?
  • Is there a training process to help you get acclimated?
  • What does support look like after implementation?
  • What is the total cost to get started?

Ideally, following implementation, you’ll have a dedicated account manager or service rep who’s an expert on the platform and understands the needs of your business. There’s nothing more frustrating than repeatedly explaining your problem to an assortment of random call center reps.

The right benefits administration system will save your HR team substantial time and effort, while empowering your employees to make better health and wellness decisions. With this list at hand, you’ll be a step ahead as you decide on a solution that fits your needs.


Nolan Waterfall is a partner at SCI & Associates, a technology-driven health insurance brokerage based in Los Angeles CA. He’s passionate about helping SMB’s find the best employee benefits and technology solutions to drive efficiency and growth.

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