Virgil, the ancient Roman philosopher, said that the most significant wealth is health. There is a lot of wisdom and truth in these words. Large and small businesses invest heavily in resources to attract and retain talented employees and provide benefits that keep them and their families happy and healthy.
According to a survey conducted by the SHRM, an increasing number of companies are focusing on offering a broader benefits package to their employees. Also, one-third of the companies surveyed said they had increased their benefits offers over the past year months to better compete for talent.
It can be difficult for employers and HR teams to handle rising benefits costs and keep track of all regulatory requirements and deadlines. Offering and managing benefits feels like a costly and challenging task for many organizations.
With all the third-party administrators, carriers, and vendors involved in offering benefits, errors and omissions are relatively common. To minimize mistakes, many companies conduct a benefits reconciliation procedure monthly to make sure carrier invoices match employee enrollments and pay deductions.
But, the process is a majority of the process is done manually, and naturally, it is time-consuming and does not always catch all errors.
A common mindset among profit benefit administrators is that manual benefits reconciliation is better at all. Still, sadly, the manual method of benefits reconciliation can carry hidden risks that companies will do better to avoid.
In a perfect world, when employees sign up for benefits, all of their choices are accurately reflected on their carrier invoices, and those choices are aligned with deductions in payroll. Regrettably, this is not the case, and costly mistakes can occur regularly, causing headaches for employers, HR staff, and employees.
At least twelve to fifteen percent of all benefits carrier invoices have errors, according to a study conducted by the Aberdeen group. This means that for a company where two-hundred-fifty employees receive benefits, the errors could amount to a quarter-million dollars.
Several issues can be challenging to address when benefits reconciliation is done manually.
For instance, some employees could be enrolled in a particular plan but not show up with the insurer. This means that employees believe they have coverage and their premiums are being deducted. However, when you match the deductions and the carrier invoices, errors can be seen.
Carrying out a manual of benefits reconciliation, matching employee benefits and payroll deductions. For companies with more than a handful of employees, a monthly reconciliation might be possible. Still, it can take several hours to complete, with no guarantee that the process will be accurate.
Some companies, owing to a lack of resources, do not even try to do so. However, it would help if you reconcile benefits to ensure errors are caught and resolved, but a manual audit is highly inefficient and labor-intensive.
Regulatory compliance is a genuine concern for companies when it comes to benefits administration. For many companies, reconciling benefits manually can compound the problem and risk regulatory fines if specific errors are overlooked or promptly corrected.
Benefits reconciliation is necessary to ensure that enrollment, payroll data, and benefit receipts are accurate and consistent each month. Fortunately, with advanced automated reconciliation software, time-consuming manual processes are no longer required.
Carrier invoices, payroll data, and employee entries can be reconciled swiftly with a few mouse clicks. Check out this reliable software at https://tabulera.com/technology/benefits-reconciliation.
Automatic benefits reconciliation is a great way for HR organizations to support businesses of any size. This eliminates benefits contribution and other costly mistakes, provides peace of mind, and helps everyone experience improved benefits delivery.