The Problem With the Premium Reconciliation Process
Group insurance premiums are constantly changing. You can onboard new hires, terminate employees, and accommodate employees with qualifying events, all within the same week. With the constant change, how do you keep a record of it all while ensuring the information regarding bills, benefits enrollment, and eligibility remains accurate? Read on to learn how you can best maneuver benefit reconciliation.
What is Benefit Reconciliation
Benefit reconciliation, or premium reconciliation, is a process where the premium invoices are reviewed in relation to an organization's payroll deductions. Organizations use this process to check for discrepancies.
The primary goal of benefit reconciliation is to ensure all payments are correct. This means not having payments that are over or under the correct amount. Organizations are also looking to see if all employees are enrolled in the correct plans, which includes paying for employees who are already terminated from said organization.
What Are the Concerns over Premium Reconciliation?
The largest concern regarding manual benefit reconciliation is obviously cost. When you consider that the average turnover rates prior to COVID were 22% per a study by Mercer, it is clear why proper termination is so crucial. If employers do not correctly terminate all employees from their benefits plan, then they could be stuck with fees.
Another crucial aspect of any organization is the satisfaction of its employees. If employees are impacted by a qualifying event and choose to change plans, it is up to the employer to ensure the transition happens seamlessly. Should an employee discover they are not correctly enrolled as they believed they were, the employee satisfaction can falter, and even affect overall company culture.
When an organization is spending time and energy on manual benefit reconciliation, it is often losing money by ignoring other areas that might greatly affect business. These opportunity costs can be a factor in considering alternative options.
Some businesses have begun offering premium reconciliation services or software solutions as a way to avoid these hindrances and give organizations more time and energy to contribute elsewhere.
Should You Automate The Process?
Automating the process can provide organizations with more time and energy to utilize in areas where it is more beneficial. This is a huge relief for smaller businesses that lack enough time, to begin with.
As discussed, the use of manual processes can inadvertently lead to more errors than if a process were automated. When we automate, we streamline the process and create a system that will calculate results, while quickly recognizing errors. This can especially be true for larger companies that are handling many different employees. Errors will be inevitable while working manually, but utilizing a software approach will save you from inadvertent errors, and also save you time in the process.
What is the Best Solution for Benefits Invoice Reconciliation
The best solution is to act proactively rather than retroactively. Don’t just fix incorrect billing, but eliminate it altogether. Select carriers partner with BerniePortal to offer BernieBill. Using BernieBill, carriers can issue bills directly from BerniePortal for no additional cost to employers. Because carriers use benefits data already in BerniePortal when issuing bills, employers can eliminate the extra ‘correction’ stage and ensure up-to-date billing.
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