Health plan administration can be a significant drain on your HR and administrative staff. If the in-house staff is burdened with administrative tasks, it can’t make progress on strategic initiatives. That’s one of the reason why the outsourced plan administration is on the rise in mid-large sized companies all over the country. The other reasons include more specialized expertise around compliance, access to benefits administration technology and desire to reduce costs and liability risk.
Traditionally such outsourcing was limited to middle and back-office functions such as member intake, open enrollment, SPD, claims processing etc., recently the role of vendor is evolving into complete benefit administration including direct interactions for all things benefits, with employees and family. This strategy can be risky without proper planning. The more hands-off and distant the in-house benefits staff is, the more difficult it will be for them to effectively intervene and control when some things don’t work.
Here is a list of some of the practices that may help HR obtain more value from their outsourcing relationships in health plan administration:
Focus on Employee experience
No matter how great the time or monetary savings you can achieve with an outsourced provider, the employee experience should be the first thing that you should focus especially when the provider is going to engage with employees in personalized two-way communications.
This requires that the provider should try to integrate into your corporate culture. Their team and systems should be flexible to adapt to your culture and your employee’s expectations.
Document your processes
Many times, new providers are lost because they don’t know your processes. It is important to document your “As is” and ‘To be” processes. This documentation should spell out what activities should happen at each stage of the benefit process lifecycle, as well as the escalation process, when there are issues. You should share any updates made to this documentation with relevant partners.
Define Objectives Clearly
Each outsourced relationship in benefit administration should have well defined quantitative and qualitative metrics. If cost savings is the goal for a certain partnership, how would you measure it? Do you have the baseline numbers to start?
If you are expecting qualitative benefits such as improved response times and increased employee job satisfaction, how will you be able to demonstrate value?
Get Consensus from key management
All key members of management should be aligned with the goals and objectives. Internal issues should be resolved prior to engaging a provider. Otherwise there is a significant risk if provider getting caught in the middle, which may lead to delays as well as the risk to the overall project.
Without a clear sense of accountability, the space between HR and the outsourced provider could grow to a level where no one seems accountable.
Most employees still need a personal touch, guidance from someone with their best interests in mind, someone within their own organization. The HR should make an internal person “accountable” for each outsourced front-office function, to step in, when an issue is escalated until it is resolved.
Create Service Level Agreement
Well-written service level agreements (SLAs) will enable you to measure the value from outsourcing. The SLA’s should include language on the escalation process. The SLA should also include metrics and the need for the provider to provide supporting data for the metrics.
Strive for a mutually beneficial relationship
No business can last without making profit. Getting a high discount may get you a “low cost” provider, but it may also lead to poor service. Give the provider enough room to invest in long term goals including skill development and IP creation. Their return on such investments will eventually help your organization as well.
Openly share information with the providers. Set up systems to track issues and the path to resolution. Regular sharing of information between both parties can prevent the occasional and short term issues from becoming larger problems.
The time to rely on papers or email for plan administration related activities is over. All activities related to benefit plan elections, QLE, eligibiity audits, summary documents, clinical and claims data should be in a centralized repository. The enrollment information should pass from employees to providers as well as clinical/claim data back from providers to employees.
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