One often overlooked cost driver to your employee benefits plans is administrative errors and oversights that are the result of sloppy record-keeping and a lack of checks and balances among your account and human resources teams.
If you are not diligent in keeping up with outgoing employees, are not paying enough attention to admin details and checking billing for errors, and are not reviewing accounts regularly, you could be leaving money on the table unnecessarily and overpaying for your group health insurance and other employee benefits you offer.
The following are some of the most common administrative mistakes that could lead to overspending on your group health plan.
Failing to keep up with staffing numbers
If your human resources and accounting are not talking to each other, you risk failing to account for personnel that leaves and continuing to include them in the health insurance roster and paying their premium.
Obviously, this is typically not an issue in a small organization of 10 to 15 employees, but the more workers you have, the easier it is for one to slip through the cracks after they leave.
Consider having HR review personnel numbers monthly and updating your files to avoid this happening.
Failing to check for ‘age-outs’
Workers who have turned age 65 may not require your company health plan anymore, since they are eligible for Medicare. You can reduce health care administration and benefits costs substantially by keeping an eye out for age-outs each year.
Missing changes to plans
Before and during open enrollment it’s important to review all of the benefits plans that you offer — health, dental and vision coverage — to make sure there aren’t any changes that will increase the cost of any of the plans.
Sometimes a plan will introduce additional coverage that your employees may not need and, if you are not staying on top of changes, you may miss the opportunity to move them to another plan.
Admin mistakes by insurers
Administrative mistakes made by the insurers you contract with can be overlooked, forcing you to overpay for your employees’ coverage.
Your accounting and HR teams should regularly audit your insurers’ billings to check for errors and ask the companies to correct any that are found. One of the most common mistakes is for an insurer to have an incorrect employee count. But the carriers can make other mistakes in billing, too.
If you notice an increase in your monthly bill with no new staff additions, you may want to delve deeper.
The takeaway
By putting in place administrative controls and a regime for regular billing and personnel-count auditing, you can avoid mistakes that add to your employee benefits costs.
Keep an open line of communication with your insurers in case you need to work with them to address any issues that arise.