Although the costs incurred by employees dealing with insurance issues may not be visible to a company's bottom line, it still makes sense to reduce these administrative burdens.
A new study from Stanford University finds that the time employees spend with insurance administrators clearing up questions and issues—called "sludge" by researchers—has costs in the tens of billions annually. The study, led by Jeffrey Pfeffer, a researcher and author, found that the direct cost of time spent by employees on health insurance administration was approximately $21.57 billion annually, with more than half (53%, or $11.4 billion) of those hours spent at work.
The study noted that excessive time spend on managing benefits can have several negative outcomes. "Red tape can exert significant compliance burdens on people's accessing rights and benefits, thereby imposing time costs and depriving people of resources or services to which they are ostensibly entitled."
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