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Pennies Count

Pennies

As the first paychecks in 2016 have been issued and the new benefits plan year has commenced, many HR folks are going to get calls from employees saying, “My payroll deduction isn’t right.”  I would submit that this is a very big deal. Even if a payroll deduction is off by pennies, it is like a broken promise and can have a much larger impact than what you may think at first blush.

When an employee sits down with a counselor and makes a decision on a benefit, they don’t get a widget or anything tangible for that decision. Instead they receive a promise the coverage they have elected will be there for them if they should ever be in the unfortunate position of needing it! 

The first sign of trouble for an employee that the promise is not on the up and up could occur when payroll deductions begin and they are “not right.”  Even if it eventually gets corrected, the trust that was initially established is tarnished, and the employee can have second thoughts on whether they really need the benefit after all.  When making financial decisions down the line about what expenses they can keep or cut, this rough start can have a subconscious effect.

Those in the insurance industry speak often about persistency.  The long term financial viability of a voluntary benefit depends on people maintaining their coverage.  Some aspects of persistency are not within our control, but we can control the confidence level employees will obtain by receiving accurate payroll deductions, starting with the first one.  Get it right the first time.

We believe investing in data integrity is critical for many reasons, but most importantly because it is the fulfillment of a promise to every employee who elects a benefit.  Univers has a billing and administration team of 10 very seasoned administrators who run every single deduction through a rigorous process to ensure accuracy.  They come from the carrier world and understand the nuances of legacy billing systems that could have slight rounding rule variances.

The bottom line is this –In our business, we often talk about premium in aggregate.  Big numbers annualized over the hundreds of thousands of employees enrolled each year represents millions of dollars in premiums.  But the sum of that total is comprised of employees who spend an average of $4.20 per week on voluntary benefits, and every single penny counts.

By: LOU PANTALONE

Lou Pantalone is the Co-Founder and Executive Vice President at Univers Workplace Solutions.

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