Tag Archives: Mikel Gray

HR fatigue: Outsourcing solutions and private exchanges

Gray-MikelMost sales pitches about private exchanges position them as a game-changing way to cut benefit costs while offering employees more choices. While the market will determine whether the private exchanges can deliver on their cost-savings promise over time, they may prove to be appealing for some organizations even if they are cost-neutral, given their other attributes.

The prospect of spending several months forecasting health and benefit budgets, and then either gaining approval or spending even more time refining the budgets by tweaking the plan design, can exhaust a weary human resources (HR) benefits staff. Here are four questions for your organization to consider.

1. Is the HR team keeping up with all of the latest requirements of the Patient Protection and Affordable Care Act (ACA), including the new reporting requirements?
2. Does HR spend more time reviewing budgets and plan designs annually than makes sense?
3. Are the number of vendor contracts and meetings still manageable?
4. Does HR have the support of the management team to hire staff to effectively deal with all of the above?

If you answer no to any of these questions we recommend evaluating an outsourcing solution, or an outsourcing upgrade. In addition, you could also consider a private exchange. Below we show a comparison between outsourcing and private exchanges:

Feature Outsource Private Exchange
Manage Enrollment and Vendor Data Feeds Yes Yes
ACA Reporting Yes Yes
Member Services Yes Yes
Outsource Vendor Renewals No Yes
Rate and Budget Setting No Yes

While the private exchange solution offers a couple of key advantages, it also comes with some downside. Once your organization is committed to exploring either of these options, we encourage you to also consider the following:

• To what degree is your organization’s culture consistent with the change?
• Is there a risk to your organization’s reputation for making this type of change?
• Will your new vendor improve the employee/dependent experience in dealing with enrollment and issues?
• Will the cost of the additional administration be offset by decreases in soft dollars within your organization? Will you be able to show that to decision makers?
• How long is the contract? Are there early termination penalties?
• What if, two to three years down the road, the private exchange decides to evolve to a platform that you are no longer comfortable with? Can you take it back in-house?

Milliman is here to help you work through issues with HR fatigue to find the best solution for your organization.

HR fatigue in relation to the ACA

Gray-MikelWhile the human resources (HR) community continues to adapt to changes caused by the implementation of the Patient Protection and Affordable Care Act (ACA), we wonder if HR professionals are experiencing job fatigue in relation to ever-increasing responsibilities created as a result of the ACA? Here are just two of the many additional responsibilities facing HR professionals post-ACA:

• HR professionals are tasked with additional reporting requirements under the ACA, including Section 6056 Reporting for applicable large employers to demonstrate they have met their shared responsibilities by providing affordable coverage, as well as 6055 Reporting (required starting in 2016) to provide documentation about which employees and dependents are covered by minimum value coverage month by month.
• HR professionals are seeing increased scrutiny from management as benefit budgets expand, which is due to the high and rising cost of coverage, potentially compounded by excise tax implications. These costs are gaining exposure at the top levels of organizations. More and more, HR departments are being asked, “What are we doing to control these costs?” That can be a difficult question to answer in meetings that demand encapsulated answers.

As a result, HR professionals are being asked more and more to take the lead in considering plan design changes and technology improvements to gain efficiencies and appeal to younger employees, but only when compared with the cost and feasibility of successful implementation. Finding a solution to these issues can be an exhausting process, especially for those HR professionals who have traditionally concentrated much of their efforts on other areas of the business.

We will be writing two follow-up blogs regarding what employers can do to solve the fatigue. The first will be on outsourcing, and the second will be on private exchanges. Stay tuned.