The billing process for benefit programs has pitfalls for employers of all sizes. Why? Billing is a monthly process for virtually all benefits, whereas enrollment and service changes are not always as frequent. Further, claims may be very frequent on some products, such as medical plans, but due to HIPAA privacy concerns, employers are generally uninvolved in the claims process unless there is a significant issue.

During my career, I have personally experienced some of the issues that can lead to problems. For one employer, the payroll deduction amounts for one of our products were loaded correctly based on payroll frequency, but set up incorrectly to interpret them as monthly premium rates. Employees were delighted by how affordable the product was during enrollment! However, things changed when the insurer sent a bill for twice the amount the employer had deducted and employee deductions had to be increased. Get it right the first time.

Today's benefit administration systems make the process of setting up deductions much less error-prone, but they aren't infallible. For example, school systems often have complex payroll modes, with deduction options that relate to a 12-month payroll year as well as paychecks based on a nine-month school year. We encountered a system which offered teachers the opportunity to change from a nine-month billing cycle to a 12-month cycle on an annual basis, but this wasn't a situation the ben admin company could handle through their normal process. Every fall, we had to scramble to fix deduction issues. It is essential to review the capabilities of any system before locking it in for an employer.