October 4, 2022

7 Questions to Consider Before Choosing a Benefits Administration System

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Tags: HR

Benefits are a critical part of talent acquisition and retention, and so is the ease with which employees and HR professionals can manage company benefits. What good is your benefits administration tool if it creates more work for your HR team?

Having the right benefits administration tool can make a difference in employee and HR personnel satisfaction, so when choosing benefits administration software, it’s important to keep the following questions in mind:

  1. Does the solution have essential functions?
  2. How does the solution fit into our current app and software ecosystem?
  3. Does the solution help employees help themselves?
  4. How does the solution help us align benefits with company strategy?
  5. How does the solution facilitate communication with insurance carriers?
  6. How does the software secure data and help us remain compliant?
  7. How does the provider support the implementation process?

7 Questions To Ask About Your Benefits Administration System

Consider the following questions to guide you to the right software solution.

1. Does the solution have essential functions?

Evaluate and prioritize vendors based on whether and how they facilitate non-negotiable benefits administration processes. 

Employee data management: Secure, accurate, and thorough benefits record and document management will keep your company compliant in an audit scenario.

Insurance carrier integration: This is important depending on how many carriers are in your network for benefits like medical, dental, vision, and pet insurance, to name a few examples.

Self-service benefits portal: Employees can easily enroll in and manage their benefits online and view their own use history in the benefits dashboard, so they don’t need to contact HR staff members.

Analytics and reporting: HR professionals, management, and outside federal agencies need to know how and how often employees use benefits. 

Automation: Small and big companies alike benefit from a solution that automates manual, repetitive tasks like data entry and open enrollment reminders.

2. How does the solution fit into our current app and software ecosystem?

Since benefits and payroll often come together like inseparable twins, you’re more likely to end up choosing an integrated HR platform. This especially makes sense for small businesses, since bundling core HR functions together saves money and eases the implementation process.

Solutions like Zoho Payroll and Namely bundle benefits and payroll in one. TriNet Zenefits gives customers the option to use their built-in benefits tool or BYOB (bring your own broker) for a fee.

If you do opt for a more patchwork-style ecosystem, you’ll need to know if the benefits software readily integrates with current tools, such as accounting software or an ATS, or if manual API (application program interface) configuration is required. API configuration prolongs implementation and increases the likelihood of data transfer glitches and security issues.

3. How does the solution help employees help themselves?

According to the Businessolver 2022 Benefits Insights Report, 86% of employees on average don’t understand their benefits. In fact, many don’t even know what benefits their employer offers beyond insurance and retirement planning. Employees want to know what benefits are available to them and how to opt-in or out as their life changes. 

When choosing benefits administration software, look for a user-friendly, intuitive self-service portal where users can:

  • View and adjust benefits
  • Report life-changing events, such as marriage or childbirth
  • Print ID cards
  • Find in-network care providers
  • Track reimbursements, FSA/HSA balances, and submitted claims

The software should offer a mobile app that allows users to do all of the above anywhere, anytime.

Choosing a benefits administration tool, like BambooHR, that empowers employees to manage their own benefits will result in fewer questions directed to HR.

Read more: Best HR Apps for Mobile

4. How does the solution help us align benefits with company strategy?

Analytics and reporting features help HR and management make strategic decisions about benefits administration. 

Claims data and information about the number of people enrolled in benefits shed insight on what benefits employees prefer. Low enrollment and/or use signals to HR that employees either don’t know the benefit exists or don’t know how to use it. HR leaders can act on this insight by spreading awareness of the range of employee benefits and educating employees as to how they can take advantage of perks. 

Analytics dashboards give HR leaders a clear understanding of what each benefit costs the company. For continuously under-utilized benefits in spite of awareness and education, this can inform decisions about which benefits to cut as a cost-saving measure.

Some software systems, such as Plansource, even offer plan modeling, so HR can test out different scenarios. For example, if an organization wants to forecast the effect of altering an insurance deductible amount, users could model this change in the system to predict how many employees will change their plans in response.

When a benefits administration tool makes analytics easy to access and interpret, it can significantly aid in decision-making about which benefits to keep, drop, or add in order to remain competitive. 

5. How does the solution communicate with insurance carriers?

Benefits administration systems usually communicate with insurance carriers in one of three ways, depending on the carriers and what software you use.

Form enrollment: Very small companies often submit enrollment forms to carriers for processing. To make this process as seamless as possible, some benefits administration systems auto-populate PDF forms with employee information and benefits selections.

Census enrollment: Census enrollment exports data from the benefits administration system to a spreadsheet, which then gets transferred 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 or “carrier feeds”: This method of data transmission is the most secure, convenient, and least prone to error. When evaluating benefits administration vendors, ask about electronic data interchange (EDI) implementation costs and timelines and how the vendor communicates with its carriers. Everything Benefits by UKG, for example, features Carrier Connectivity which streamlines communication between your benefits admin system and insurance carriers.

6. How does the software secure data and help us remain compliant?

You should expect a benefits administration vendor to enforce tight security, stay current with shifting government legislation, and keep customers compliant. HR is, after all, one of cybercriminals’ most coveted targets.

Ask the vendor what measures they take to prevent cyber attacks and other types of security breaches.  

The software should also keep up with legislation — such as Consolidated Omnibus Budget Reconciliation Act (COBRA), Health Insurance Portability and Accountability Act (HIPAA), and the Affordable Care Act (ACA) to ensure your company is handling benefits in a legal manner. 

Most solutions include compliance features, at least for ACA. GoCo, for instance, includes ACA, HIPAA, and overall benefits compliance features. TriNet Zenefits even has alerts to notify users of changes to external regulations.

Read more: Don’t Trade on Privacy When Building an HR Data Policy

7. How does the provider support the implementation process?

Your level of necessary implementation support will depend on in-house technical expertise. Small businesses will likely need to rely more heavily on vendor implementation support than larger companies that have more IT staff.

A full-featured benefits administration system or HCM suite must be configured to your company’s needs and synced with existing data. This involves uploading current data related to benefits, payroll, employee income, and more. You’ll also need to set up different levels of employee access, employee groups, and locations.

Before you commit to a vendor, gather feedback from internal IT personnel on their ability to set up and maintain the software. Specific questions to raise are:

  • How long does implementation take?
  • What information are you as the customer responsible for providing?
  • Does the provider offer training, documentation, or both?
  • What does support look like after implementation?
  • Do higher levels of technical support incur an additional cost?

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. Namely, for example, provides a dedicated account rep for every customer.

Ready to Pick Your Benefits Administration Software?

The right benefits administration system —usually packaged within HR platforms— will save your HR team substantial time and effort while empowering your employees to make better health and wellness decisions. These questions will help you find the solution that fits your needs. 

Read next: Best HR Software for Small Businesses

Top Human Resources Software Recommendations

1 Paycor

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Paycor’s HR software modernizes every aspect of people management, which saves leaders time and gives them the powerful analytics they need to build winning teams. Paycor provides a full suite of HCM solutions with a single source of truth for employee data, so users never have to switch platforms, log-in to multiple systems, re-key data or open multiple spreadsheets. Everyday processes become simplified, allowing organizations to focus on their most important work.

Learn more about Paycor

2 GoCo

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GoCo is modern HR, benefits, and payroll, built for flexibility and ease-of-use in mind. Manage records, performance, time off, onboarding, benefits, and more all in one place. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Unlike other HRIS platforms, GoCo is built to be flexible enough to support existing processes, policies, and providers, so you don't have to change the way you work just to adopt a modern HR system.

Learn more about GoCo

3 Rippling

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Rippling is the first way for businesses to manage all of their HR, IT, and Finance — payroll, benefits, computers, apps, corporate cards, expenses, and more — in one unified workforce platform. By connecting every business system to one source of truth for employee data, businesses can automate all of the manual work they normally need to do to make employee changes.

Learn more about Rippling

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