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Micah Fairchild Open Enrollment Software is Evolving. Is Your Organization?

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 By Micah Fairchild

Employee Enrollment Evolution is Causing a Software Sea Change

It's "open-season" for open-enrollment, and organizations seem to be realizing that this age-old human resources process is evolving in front of them—and it's turning out to be only as good as the HR software being used. Like so many other business processes, forward-thinking companies are seeing that decision-making in open enrollment is shifting to the employee.

As products and services emerge onto the market, two major things are happening: 1) The HR administrative burden from open enrollment is looking to be reduced, and 2) Employees are saying that they must have access to speed on their benefits plans. Open enrollment is becoming more strategic. Says Guardian Life Insurance's Elena Wu, "We [are moving] away from the idea that enrollment is just an administrative process to sign people up for their benefits plans". In fact, employee self-service portals, decision support tools, carrier data feeds, and more are just some of the new "key" features being touted with this new brand of open enrollment. Further, by making common file formatting available for the laundry list of regulatory reports (like COBRA and FSA), efficiencies abound with new enrollment software systems.

Trends with Benefits in the HRIS Market

As can be seen, with the Human Resource Information Systems (HRIS) software market evolving, less and less barriers stand in the way of even small employers taking the plunge into open enrollment automation. Indeed, by automating open enrollment with technology, it has been estimated that companies can cut dedicated HR staff time in half; drop error rates from over 5% to less than 1%; and save close to $500K versus similar paper-based processes. Granted, these figures wholly depend on the industry, company size, and specific situations, but an incredible dividend can be expected for even the smallest employer's switch. This is due in no large part to the fact that automating these types of HR transactions increases accuracy, improves tactical efficiency, and allows for real-time reporting and auditing.

Employers seem to be catching on with 2011 Towers Watson data pointing to a drop from 14% to less than 9% of employers that still base their open enrollment processes on paper. Along with this precipitous drop in paper-based processes, organizations are also increasing their use of the cloud and decreasing the number of business systems that are on-premises. Indeed according to Tower Watson's Rich Nicholas "these employers [who] do not outsource but do use technology…no longer buy and install it on their premises". Rather, increasingly, organizations are turning to the software-as-a-service (SaaS) model to work out open enrollment, says Nicholas.

This Ain't Your Momma's Open Enrollment Software

First generation platforms for open enrollment only took care of the most basic transactions and workflows. The basic problem was simple: How do you get a large number of employees efficiently and accurately enrolled each year in "core" employer-sponsored benefit plans? The platforms that house open enrollments today are far more sophisticated. For one thing, interactive features have been taken to a whole new level in an effort to increase the level of communication with employees. Blogs, videos, mobile access…all of these interactive techniques are part of a concerted effort to get information right into the hands of employees.

I "Like" My Benefits Software

Getting that information out on the road is working too, as it would seem that interest is certainly growing for using technology as a communications device for benefits—especially open enrollment. In fact, a 2010 Towers Watson study found that 84% of respondents were using email as the main communication venues for benefits news compared with 60% face-to-face. Web-based "chatting", podcasts, and videos were also on the rise, making up a combined 33% usage according to survey participants. Further, while still small, the adoption and usage of social media tools was up to 4%. Still, perhaps the most intriguing efforts for open enrollment currently are coming in the form of "mobile"—with innovative companies using ranking features for employees to "grade" their benefit providers. These changes are reflective of what companies are thinking about given the results from the latest Annual Benefits Enrollment Survey. Specifically fully 69% of employers aren't satisfied with their enrollment technology—citing that, along with employee communication, "inadequate technology" is the most important issue to be faced this year.

Open the Door for the New Open-Enrollment

Though the annual rite of passage of annual enrollment has been in a bit of software wasteland for some time, it seems as though the stars are finally aligning for this process. After roughly 10 years as a solely logistical application, the economy, health care reform, strategic workforce management, and software innovation have collided to make the perfect storm. Open enrollment has evolved. The question is…has your organization? End

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Fully 69% of employers aren't satisfied with their enrollment technology—citing that, along with employee communication, "inadequate technology" is the most important issue to be faced this year."


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