The Key Differences between Benefit Administration and Open Enrollment Tools

Using electronic tools for benefits open enrollment and benefits administration is and has been the wave of the future for many years now. Employers have steadily been ditching paper enrollment forms for electronic submissions to streamline processes and improve organization.

A study by Guardian Life Insurance Company in 2017, found that about half of employers expect to increase their spending on benefits-related technology.

Electronic elections are beneficial for many reasons including:

  • Eliminating manual premium calculations−system calculates premium based on employee elections, age-bands, etc.;
  • Ensuring employees cannot continue the enrollment process without completing required fields;
  • Provides an opportunity for an employer to distribute required notices electronically;
  • Gives more time back to HR teams; and
  • Eliminates thousands of papers distributed for open enrollment.

However, if you choose to move from paper to an electronic system or are considering a tool to use, you should be aware there are differences between an online enrollment tool and a benefits administration tool.

An online enrollment tool is a way to capture benefit elections electronically through a portal for annual open enrollment as well as perpetual new hire elections.

Online enrollment tools work best for employers with:

  • Less than 100 employees.
  • Low turnover rate.
  • Consistent eligibility guidelines.
  • Consistent benefit offerings.
  • Uniform payroll deduction schedules for benefit offerings.
  • Uncomplicated security access.

A benefits administration tool is a more robust system that not only captures elections electronically but streamlines processes. The time savings comes with integrations such as that of payroll which allows an organization to see employee data, election updates, payroll deductions, etc., all in one place. It can also be an access point for EDI 834 Membership Files that creates one source of truth.

Benefits administration tool works best for employers with:

  • Greater than 100 employees.
  • High turnover rate.
  • Varying eligibility guidelines and benefit offerings.
  • Ability to offer more complex insurance products (accident & critical illness).
    • Qualifying Questions
    • Issue Age vs. Attained Age
    • Annual/Perpetual Enrollment
  • Multiple payroll deduction schedules.
  • Multi-level accessibility structure for security access.

Choosing the right electronic tool takes time and research plus the consideration of multiple factors based on your organization’s size, structure and needs. Knowing the difference between an online enrollment tool and a benefits administration tool is the first step toward making the best choice.

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