The true costs of managing employee benefits

One analysis shows that account managers can spend up to 60% of their time on manual processes that could be automated during the busy season. The true costs run well past the time itself. Here's how manual processes compound through each phase of the benefits lifecycle and create cascading inefficiencies for agencies and the employers they serve.

Pre-renewal requires careful analysis and thoughtful preparation, but account managers often face strategic planning challenges that shape the year ahead. Over 52% of the 375 employers interviewed in Zywave's 2024 Broker Services Survey said they wanted trusted advisors, not "insurance salespeople," to keep them abreast of compliance trends and help them understand various forms of insurance and risk transfer strategies. Despite that, many account managers spend the pre-renewal phase on administrative work:

• Market analysis and benchmarking become time-consuming exercises in data gathering
• Claims analysis requires manual compilation and review of multiple data sources
• Plan design recommendations arrive late because of time spent on administrative tasks
• Funding arrangement evaluations lack the depth of analysis needed
• Compliance reviews can miss critical details because the review is manual

Account managers end up playing catch-up before the cycle begins, which compromises their ability to think strategically. That means missed chances to improve plan design and reduce costs for employers and their employees.

Time is what runs short during the renewal phase. Account managers have to balance the detailed analysis renewals require against the pressing demands of current employers, and both usually suffer.

• Account managers struggle to pull renewals while managing current workload
• Alternative carrier marketing gets rushed because of administrative backlog
• Quote comparisons take longer, and the best fit for a client can be missed
• Cost projections require extensive manual calculations, increasing error risk
• Executive presentations are delayed by time spent on manual tasks

These bottlenecks force account managers into rushed decisions or a weaker fit for the client. The pressure to finish renewals on time while staying accurate creates an environment where strategic thinking gives way to administrative necessity.

Open enrollment is the most visible period in the cycle, and the point at which employees make their decisions. Manual burdens set off a cascade of operational problems. The workload delays response times on urgent employer needs, and time pressure raises error rates across every process. A few of the tasks that stand between account managers and consistent service:

• A typical case build for a mid-sized employer with multiple plan offerings can consume up to 20 hours
• Benefits administration system set up stalls while documents and information are tracked down
• EDI connectivity issues take longer to resolve
• Employee communication materials get rushed or simplified
• Decision support tools go partly unused because setup takes too long

The consequences reach past the enrollment period. A poor experience here damages employer relationships, creates ongoing administrative headaches and generates employee dissatisfaction that persists through the year. These impacts are felt most at small and mid-sized businesses (SMBs), where human resources (HR) employees often handle multiple responsibilities. According to The Hartford's Future of Benefits Study, HR leaders at SMBs manage an average of eight different job functions, from recruiting and benefits administration to compliance and technology integration. With that much to carry, strategic planning takes a back seat to daily operations. This is where trusted brokers become essential partners. Benefit decision-makers at SMBs rely on their brokers to build and run competitive programs.

Post-enrollment and ongoing administration may seem less intense than open enrollment, but the phase demands consistent attention to detail and prompt response. Employers expect quick answers, and when they have questions or concerns they turn to their brokers. Zywave found that 57% of employers identified prompt, effective service and timely answers to questions as the most important criteria for selecting a broker. Nearly 83% wanted to hear from their brokers weekly (38.83%) or monthly (44.15%) on certain insurance topics. Manual administrative burdens drain agency resources through this phase:

• COBRA administration faces delays and potential compliance issues
• Dependent verification becomes a bottleneck
• Billing reconciliation consumes excessive time
• Claims advocacy gets delayed by administrative overload

At one California-based general health insurance agency, account managers struggled with eligibility processing, particularly mid-year changes.

"Account managers spent about 50% of their day pulling forms from our benefits administration platform, verifying the correct information, submitting to health insurance carriers and following up," said a senior vice president of benefits consulting at the agency. The agency's efficiency challenges increased when the COVID-19 pandemic forced employers to reduce staff headcounts.