Benefits management is one of HR’s most complex tasks. Your program needs to be strong enough to support talent recruitment and retention, yet building that kind of program can be time-consuming and complicated. Below are five of the most common challenges HR professionals face when managing employee benefits, along with practical ways to address each.
Staying compliant with federal, state, and local regulations is critical to any organization’s survival. Falling out of compliance in any area — for example, with the Affordable Care Act (ACA), the Employee Retirement Income Security Act (ERISA), or the Family and Medical Leave Act (FMLA) — can lead to steep penalty payments on every information return. It can also mean much larger Employer Shared Responsibility Payments for failing to offer affordable coverage.
Using a cloud-based benefits platform like Workday is one way to ease your compliance burden. These platforms often have built-in tools that provide real-time visibility into regulatory updates, industry benchmarks, and emerging risks, so you’re not learning about a change after it costs you.
It also helps to partner with a benefits provider that specializes in regulatory compliance. The right partner will not only provide proactive updates on rule changes but also offer a strategic plan for helping you stay compliant. Bonus points if that partner can deliver services directly inside your platform, as managing integrations can be another time-consuming part of the whole process.
An aging workforce, the lingering effects of the pandemic, and persistent inflation are all contributing to higher healthcare and benefits costs. Companies feel it, and so do employees. About two-thirds of U.S. adults say they worry about affording health care for themselves and their family, according to KFF (formerly the Kaiser Family Foundation), and 38% of insured adults under 65 worry about affording their monthly premium.
Digging into data analytics — things like healthcare claims, biometric screening results, group health profiles, and health risk assessments — can put your team on the path to building more targeted programs around the conditions and gaps that matter most to your workforce.
Another option is pairing high-deductible health plans (HDHPs) with health savings accounts (HSAs). HDHPs carry lower premiums than traditional plans. For employers, that means paying less toward coverage. Meanwhile, HSAs let employees set aside pre-tax dollars for qualifying medical expenses. Regardless of where those contributions come from — whether employees or employers — they’re tax-deductible and tax-free when spent on qualifying care.
Finally, you can negotiate with vendors or use group purchasing. A group purchasing organization (GPO) takes vendor vetting off your plate and lets you take advantage of collective buying power to secure discounts on premiums, medical services, and pharmacy benefits. Negotiating directly with your vendors can also yield better pricing, lower administrative fees, customized contract terms, and improved data access.
Employees often don't fully understand or use the benefits available to them, leading to lower satisfaction and wasted spend. That’s in part because of how confusing benefits can be. Not only is picking the right healthcare plan hard, but employees may also worry about misusing a plan and getting hit with a surprise bill.
One way to address this is by offering benefits education throughout the year. Collaborate with your vendors to answer the most common employee questions and incorporate those answers into your educational materials. Price-comparison tools and healthcare navigation services are also valuable as they can help answer benefits questions and guide employees through the complex healthcare system.
Another way to help is to give employees a centralized self-service platform. When employees can open an app on their phones and find answers about their benefits, they use them more often. This has the added benefit of reducing the number of benefits-related questions your HR team gets.
Manual processes like enrollment, data entry, and vendor communication eat up time. They also introduce errors and delays, forcing teams to chase down missing information or repeatedly correct the same mistakes. The costs add up, with errors leading to employee mistrust, legal penalties, and reputational damage.
You can reduce how much time HR spends on manual work by automating enrollment, reporting, and other repetitive tasks with benefits administration software. Automating those tasks can give you some of that time back for higher-value work.
For companies using Workday, a Workday-native partner can do even more to take time-intensive processes off HR’s plate. OneSource Virtual (OSV) delivers benefits services directly within your Workday tenant — not as a separate platform you have to integrate with — so benefits administration, COBRA, direct billing, and reconciliation all happen in one place. Your team gets dedicated specialists who manage the work without the middleware, the silos, or the data-syncing problems that come with third-party platforms.
Managing benefits without specialized expertise or extra help is hard. Between compliance requirements, carrier coordination, onboarding, payroll, and employee relations, the workload piles up fast.
Training and upskilling can help your team, as can bringing in outside expertise. A Workday-native partner like OSV gives you certified Workday expertise for everything from open enrollment and eligibility events to ACA compliance and employee inquiries without you having to staff up. OSV's branded employee help desk aligns with your company culture, and our embedded case management keeps HR from being pulled into every benefits question.
Finally, stay plugged into the wider benefits world. Industry publications, webinars, and peer networks are how you catch regulatory changes before they hit, pick up tactics that worked for someone else, and find people to call when you're stuck.
While these five challenges don't go away on their own, the right combination of technology and expertise makes them manageable. OSV delivers benefits administration as a Workday-native, in-tenant service — managing benefits, COBRA, direct billing, and reconciliation directly inside your Workday tenant, with no middleware required. Our certified Workday experts handle the day-to-day so your HR team can focus on strategy.
Facing one of these challenges? Talk to an OSV expert about how we can simplify benefits administration for you.