What are the impacts buyers should consider when weighing the pros/cons of a standalone benefits administration (Ben Admin) solution versus an “all in one” HCM solution for benefits administration?
Certainly, some HCM providers have made a commitment to the benefits administration area of their system, a few making this a focal point for enhancements and better functionality. Some HCM and standalone Ben Admin providers have focused on ways to improve data integrations, mainly through APIs and similar methods. Specific to deciding between an HCM vs standalone Ben Admin provider, focus tends to be on a client’s benefit strategy including complexity of their benefits program, use of decision support and education tools for employees to understand their benefit options, the need for an employee benefit call center, the use of services like dependent verifications, QMCSOs, direct bill for leave of absence, to name a few. Clients should also consider a system being able to manage their voluntary benefits strategy, access to dashboards to help monitor objectives, reporting capabilities, and the general amount of benefits knowledge the vendor/provider possesses through their support models and approach to managing a client. Lastly, client size, scale of their own Benefits team, and available budget are always variables which need to factor into the decision in deciding which option is best for them in evaluating an HCM vs a standalone Ben Admin provider/vendor.
– Ron Conine, Lockton Companies
Specifically this speaks to the tradeoff between functionality and one database. The key to functionality in standalone is that it has to sufficiently improve the ROI of going all-in-one. The key to all-in-one is to make sure that payroll interactions are seamless, and not too much of hit is taken on interfaces to carriers.
– Jeremy Ames, Workforce Insight
Sophistication of users. Service associated with it. can it be maintained in-house or do we need the vendor still.
– Vincent Pinto, NFP
The all-in-one HCM provider is becoming a fierce competitor to stand-alone benefits players - mostly because data integrations between payroll & benefits technology has not kept pace with modern consumer expectations. However, benefits are becoming increasingly complex and all-in-one solutions are having their own challenges developing their proprietary benefit modules to keep up. Clients should consider their total HR technology strategy when evaluating which lane to take. Can the long-term success of that strategy endure a less than ideal employee experience, or lack of robust functionality for benefits decisions, hybrid plan models, or complex voluntary plans? Or should a niche provider take this on, and the appropriate governance of a separate relationship be put in place?
– Corrina Nation, BTR
For many SMB clients, the native ben admin within the HCM solution is fine. However, it never hurts to take a good look at any manual processes or bottlenecks and understand why those exist. If the benefits structure is complex (examples: varied benefit classes with a lot of movement in and out of classes, stacking life insurance plans); or if there is a need for enhanced services like strong decision support or consolidated billing functionality; these services are more often found in stand-alone benefits administration solutions rather than a holistic HCM solution. We also take into consideration what the integration of the ben admin with payroll will look like. It is important to identify how the systems will share information and the costs to build out any integrations. Although costs should not trump efficiencies gained, it is a component that cannot be ignored. We recommend clients consider all costs, including soft costs (time and resources) that will be impacted with any change like this.
– Anne Burkett, USI Insurance Services
The complexity of a clients business structure, especially those in M & A mode; Benefits and ACA and the nuances in benefit plans, benefit and contribution structure, and the data used to identify and determine eligibility rules should be considered. Consider: Carrier billing; self-bill/ list bill, and reporting capabilities to assist w/reconciliation or remittance statement generation for self-bill coverages. The audit trail and visibility into all elections/waivers/approvals/denials/changes/terminations (think DOL audit).
Remember the ACA, eligibility and ineligibility as the information needed may live in multiple systems and what will be involved from a data exchange and resource perspective to stay compliant. Carrier connectivity and understanding if the process is native or outsourced, further if the data is transmitted via EDI or API, and any established EDIs/APIs with carriers are important to know. For established connections/APIs in existence, this can save weeks or months on a production timeline. The same would be true for data exchanges between HR/Payroll/ACA and Benefit systems outside of the HCM Suite or Ben Admin Solution. Fees associated with items like system modifications, change in language, pricing, contribution, carrier, plan/EDI structure changes, cost per EDI/API,SSO and change orders in general, are important to understand and weigh options. Lastly, clients should consider how much they want to manage and own internally vs outsource.
– Pattie Zappone, Alliant Insurance Services
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