Congrats! You’ve decided to implement online benefits administration software to attract and retain clients for your agency. A few questions to consider as you get started: 

  • Who will onboard and manage your clients on this platform? 
  • Do you use an internal senior customer service representative who understands employee benefits but has never implemented software? 
  • Do you go with your IT person who has software implementation experience but does not know the intricacies of employee benefits administration? 
  • Do you use a third-party partner that is solely focused on the implementation and management of online benefits administration? 

Say your best internal choice is one of your senior customer service representatives ― how will these new tasks affect their current responsibilities? Have you considered the internal cost of having them do both or transitioning their current responsibilities to someone else?  

For example, let’s say their salary is $45,000; add in taxes, benefits, etc., and their total compensation is closer to $60,000, equating to $28.85 per hour based on a 40-hour work week.  

Now, let’s look at the time it takes for a one-time benefits administration system implementation and ongoing support. On average, you will have eight benefit plans ― medical/prescription, dental, vision, life, disability, FSA/HRA, COBRA and voluntary life. Using 100 employees for this example, here are the average annual hours per function: 

One-time setup (importing employees, creating plans, adding rates, HR documents, adding employees to current elections, etc.)  14 hours 
Renewal process after first year  4 hours 
HR training  2 hours 
Ongoing HR/employee support  3 hours 
Open enrollment setup and monitoring  6 hours 
Eligibility processing  18 hours 
Affordable Care Act items  7 hours 
TOTAL  50 hours first year; 40 hours for each subsequent year 

 

In the first year, your internal labor costs will be 50 x $28.85 = $1,443 and $1,154 for each subsequent year.  

For fixed costs, let’s assume your agency is implementing the online benefits administration system with 10 groups, so each group’s annual cost would be: 

Annual software license fee  $8,000/10  $800 
Electronic Data Interchange transaction fee  $0.45 per month x 100 employees x 12 months  $540 
Total per group    $1,340 

 

After the first year, the total labor and fixed costs ($1,154 + $1,340) are $2,494 for one group; 10 groups will be $24,940 per year. 

And don’t forget the potential opportunity lost cost ― an online benefits administration system is a highly rules-based, complex system. If your staff is not using it consistently every day, the potential for errors is high. This could result in unhappy or lost clients. 

At GRA Benefits Group, we provide unique technology solutions to ease the implementation and management of benefits administration. 

We will provide you with ONE source of reliable support for comprehensive and cost-effective solutions. GRA works with companies of all sizes to provide customized support and streamlined workflow for employee benefits administration. 

Contact us today to see how we can help you!