Here are five key questions to ask the voluntary carriers you partner with to make sure you're bringing clients the options and services they need.

1. Does the carrier offer flexible billing options?

Most carriers in our recent "Billing Practices of Voluntary Carriers" SpotlightTM Report don't mandate bill types by group size, although 10 require larger groups to use self-billing, and one also offers web-billing as an option. The majority of carriers also allow third-party administrators to bill for their products after completing a due diligence process. Usually, the third party must be licensed at a minimum.

2. Does the carrier offer employers multiple ways to pay their bills?

Many carriers we surveyed say they prefer ACH/auto-draft or online payments, but most employers still pay their bills by paper check. It's important for your carrier partners to offer the payment methods your clients want to use.

3. Does the carrier make it easy for employers to determine their payroll deduction amount?

Our study shows fewer than half of carriers provide an electronic payroll deduction file to employers. Instead, most say employers are responsible for determining payroll deduction amounts, and don't provide a payroll deduction file or calculation instructions. Carriers that provide a way for employers to determine their payroll deduction amount — either through an electronic payroll deduction file or with calculation instructions — will improve their customer's billing experience. It'll also help improve billing accuracy and reduce the amount of follow-up when the amounts they pay don't match the amounts on the bill.

4. Does the carrier incorporate a tolerance amount in the premium reconciliation process?

The majority of carriers surveyed have a tolerance level when employers remit differs from the billed amount. The most common tolerance level is within 10% of the amount due, but it can range from 3% to 25% or $.03 to $100 of the amount due. Carriers should identify a tolerance amount they'll accept so your clients aren't regularly fielding inquiries about small premium differences, improving the overall voluntary billing experience.

5. Does the carrier maintain individual employee records for self-billing customers to simplify the claims process for employees?

Claims processing is likely to be delayed if the carrier's claims team has to verify coverage with employers. One way to improve claims processing for self-billed clients is to choose carriers that require a regular eligibility file from employers. This keeps the billing process simple and also provides a way for carriers to verify eligibility at the time of claim. About half of carriers that offer self-billing receive a regular eligibility file from employers, third-party administrators or benefit administration platform, while some carriers require an eligibility file only for specific products.
Focusing on billing up front may seem like putting the cart before the horse, but it's important to talk with your clients early in the process about their preferences and expectations for voluntary billing. That way you can help match them with the best carrier to meet their needs, and create the best possible customer experience for your clients and their employees.

Instant Insights /

Voluntary benefits billing: 5 key questions brokers should ask

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