What is Employee Benefits Reconciliation?
When it comes to employee benefits, data is constantly on the move. Consequently, it is widely known that that carrier invoices and enrollment system data rarely accurately reflect one another in real time. This may include terminated employees that remain enrolled, confusion with dependents, census demographic errors or worse, active employees who are believed to be enrolled but are currently without coverage. Employers need to intercept these issues as soon as possible to proactively take the corrective action that brings much needed accuracy back on target.
Employee benefits reconciliation, or premium reconciliation, is the monthly process of comparing an employer’s carrier invoice data to the enrollment data within their benefits administration system or payroll system to identify discrepancies that may exist between each system. Employers do this to ensure they are paying exactly what they owe with the underlying objective of minimizing the risk of over or under premium payments. This serves to reduce financial liabilities both positive and negative as well as to confirm benefit elections of employees.
The truth of the matter is that carrier invoices and enrollment system data are rarely an exact match. Inaccuracies found with carrier charges, membership adjustments, complex human resources information systems, complex benefits administration systems, overwhelmed human resource departments all point to the ever growing necessity of a systematic and consistent benefits reconciliation process. These inaccuracies can add up and they can prove to be very costly in monetary capital and time capital alike.
How does employee benefits reconciliation work?
To reconcile employee benefit charges to enrollment data, each carrier invoice must be audited. This task has historically been done manually with highlighters and rulers. Not fun nor efficient. Most accounting and human resources personnel know firsthand that this is a very rigorous process. With the volume of other critical human resource responsibilities, benefits reconciliation is not always performed on a regular basis nor as meticulously performed as it should be. Depending on the size of an organization, this task can be painful and very taxing on organizational resources.
Is there a better way to oversee benefits reconciliation?
We are glad you asked! Yes, of course! Like many of the necessary administrative tasks that confront employers in every aspect of their operations today, tech is often times a favorable solution. Software to accomplish the task of benefits reconciliation does exist and often times a far more efficient and reliable means to accomplish the task. Benefits reconciliation software can alleviate the manual, rigorous and repetitive accounting processes associated with benefits reconciliation tasks. These software programs consolidate carrier invoices, digitally audit benefits billing data against enrollment data and identify discrepancies that exists for corrective action. Quickly and painlessly. These discrepancies can save thousands of dollars in time and tens of thousands of dollars in costly billing discrepancies.
Please contact us at Charton Financial Group if you would like to learn more about software solutions for benefits reconciliation.