Our company food service area always has classic rock music playing. Today's selection included Paul Simon's "50 Ways to Leave Your Lover." Since I was thinking about this article what I heard was "There must be 50 ways to mess up billing." Or more...
In fact, in an article in the Winter 2009 issue of LIMRA's "MarketFacts Quarterly," Ron Neyer observed "Producers feel that the efficiency and accuracy of a carrier's billing system is the most critical factor in their decision process." Why is billing such an important issue for producers and the carriers they represent? Let's discuss a few of the drivers behind the issue, and then consider some ideas to help minimize problems.
The major reason that billing is a sore spot for employers is it is consistent (benefit billing tends to be at least as frequent as monthly, and voluntary coverage is usually billed based on pay periods). Let's face it, other important service areas like certificate issue and claims processing primarily affect employees. The issue process only happens at the time of plan inception, and claims issues only occasionally are escalated to employer attention.
Billing, on the other hand, is the area where consistent service can quickly turn into a chronic problem. Common sources of billing problems include:
- Timing of change management - how frequently do employers say: "I deleted Employee A on last month's bill and she is still listed?"
- Timing of paid premium cash application with billing processes - employers become frustrated when the current bill shows a balance carried forward from the preceding month.
- Processing of new hire enrollments, coordinating them with the ongoing billing.
- Bills that are not delivered to the employer on the expected time schedule.
Since billing is a home office function, you might just be wondering what you can do to avoid billing problems or issues. The role of an employee benefit professional in this area can be referred to as "right time billing." Describing the billing processes related to voluntary benefits this way will not change the way home offices bill the programs, but it might help mold the employer's perception and expectations. First of all, the employer needs to be educated in the timing issues related to change and process management. Even in the best of real time billing systems, it is possible to have bills generated while the change register and/or premium payment are in transition. The employer's expectations should include realistic time standards for transit and processing. Second, if an employee requires a refund for cancellations or coverage declined in underwriting, the employer should be aware of the time the employee should expect for processing the refund.
For example, deductions in the employer's payroll system may not reach the carrier before they issue a refund. This is clearly an area where upfront communication can head off later issues. Switching billing media from paper to electronic methods also can cut down on problems, reducing transit and processing time.
My colleague Rachelle Bruning, who is in charge of policyowner services here, which includes billing, observed, "For voluntary benefits, the most efficient billing is to have complete integration with the employer's payroll system on a real time basis." While this ideal billing environment may not always be possible to achieve, whether due to employer or insurer shortcomings, it represents the goal. That will help minimize employer pain. Then we can change the Paul Simon song that reminds us of billing to "The Sounds of Silence."
Marty Traynor is vice president ofvoluntary benefits at Mutual of Omaha. He can be reached at
marty.traynor@mutualofomaha.com.
