The billing process and billing pains

The billing process for benefit programs has pitfalls for employers of all sizes. Why? Billing is a monthly process for virtually all benefits, whereas enrollment and service changes are not always as frequent. Further, claims may be very frequent on some products, such as medical plans, but due to HIPAA privacy concerns, employers are generally uninvolved in the claims process unless there is a significant issue.

During my career, I have personally experienced some of the issues that can lead to problems. For one employer, the payroll deduction amounts for one of our products were loaded correctly based on payroll frequency, but set up incorrectly to interpret them as monthly premium rates. Employees were delighted by how affordable the product was during enrollment! However, things changed when the insurer sent a bill for twice the amount the employer had deducted and employee deductions had to be increased. Get it right the first time.

Today’s benefit administration systems make the process of setting up deductions much less error-prone, but they aren’t infallible. For example, school systems often have complex payroll modes, with deduction options that relate to a 12-month payroll year as well as paychecks based on a nine-month school year. We encountered a system which offered teachers the opportunity to change from a nine-month billing cycle to a 12-month cycle on an annual basis, but this wasn’t a situation the ben admin company could handle through their normal process. Every fall, we had to scramble to fix deduction issues. It is essential to review the capabilities of any system before locking it in for an employer.

Timing problems can also cause the invoice from an insurer to be out of sync with the employer’s records. Product providers create invoices in advance of the due date, and transactions can happen at any time. Examples include employee hiring and termination, job changes, and changes in their personal situations.

When billing issues affect an employee, it has a magnified impact on the employer because they are managing the deduction and payment process. So what do benefit professionals need to do to minimize billing issues for our employer customers?

First, we need to play an active role in selection of a ben admin provider. Some offer more robust billing support that can be critical in maintaining happy customers. Make sure you understand the billing-related capabilities of the system before you recommend it. Engaging a third-party billing organization may be the best solution for some employers.

Second, we need to verify every element of case set-up and the initial bill.

Related: Judge on providers’ side in CMS out-of-network billing arbitration

Third, make sure employers are educated. It’s easy to be fooled into thinking that API connectivity between admin systems, product providers, and the payroll company will eliminate issues. Improved connectivity can reduce the number of timing issues, but won’t eliminate them. It is vital that the employer understand the capabilities of their administration system.

Finally, the employer needs to be confident that if any problems do arise, they will be taken care of quickly and accurately.