Determine Your Needs And Budget
Any search for a benefits administration partner starts by determining what’s in-scope. First, break down your benefits administration processes into their component parts. Most organizations can identify around 20 separate tasks in health and welfare administration, in addition to ancillary benefits services.
Then, ask yourself whether you want to retain any of those services in-house. For example, some organizations may wish to handle their employee service activities themselves while outsourcing the technology, especially if they have a robust and secure customer service call center they use for their own business operations. An arrangement like this is commonly referred to as co-sourcing.
Most organizations can identify around 20 separate tasks in health and welfare benefits administration.
As benefits grow in complexity, organizations with more than 500 employees are less inclined to insource or co-source their benefits administration technology and services, preferring instead to outsource them. The more services you outsource, the more predictable your budget becomes. That is, you have more control over the cost structure and the total cost of ownership is lower.
That said, the total cost of ownership also varies widely among outsourced benefits administration vendors. This is most evident in change requests, where you can feel like you’re getting nickel-and-dimed all the time, especially if you have a customized solution. Platforms like these require special coding and/or some form of implementation that is unique to your organization and benefits options. Even if your year-to-year changes stay within the confines of the original build, you may still have to pay a specialist to make those changes.
Unlike “customized” solutions, those that are “configurable” rely on native tools within the system to change its behavior or features. Single-source software as a service (SaaS) platforms tend to be more configurable and are therefore less costly when adding plans, processing active vs. passive enrollment, updating rates, etc.