For Brokers and For Employers - and all of those involved in the Decision-Making Processes - providing and managing services required to support the Insurance and Employee Benefit Plans comes down to a Time/Cost/Benefit Analysis.

By definition part of the role of HR Departments and the Broker(s) is the selection of Plans and Programs to meet the Employees' needs within the "Price Points" of the Employees and the Employer. With the ever increasing number of Plans and Programs to choose from - and the regulations that often go with them - the supporting services have become more and more complex. These include:
> Enrollment Services - For Educating, Communicating, Enrolling, and Collecting the Data during the . Enrollment Period and during ongoing eligibility periods throughout the year.
> Defined Contribution Plan Supporting Services - For handling the complexity of offering multiple Carriers offering Plans, Programs, and Services on an allocated Credit/Dollar basis to different classes of employees utilizing "Benefits Bank" on a non-discriminatory basis.
> Private Exchanges for Employee Benefits - For offering Employees Benefit Choices on a Private
> Exchange basis separate from State or Federal Exchanges and in compliance with PPACA.
> Third Party Administrative TPA) Services - For handling Section 125 of the IRSC and Reimbursement (Tax-Advantaged) Plan selections - including HSAs, HRAs, FSAs, Dependent Care, and Transportation Accounts that save the Employees and the Employers Tax Dollars.
> Third Party Administrative TPA) Services - For Self-Funded Health Plan Designs and other Self-Insured Plans.
> Third Party Administrative TPA) Services - For Retirement Plans - including: 401(k), 403(b), Defined Benefit Plans, etc.
> Benefit Statements - For explaining to the Employees the Plans, Programs, and Services in which they participate prior to and after Enrollment.
> Payroll Services - For handling payroll during regular Pay Periods, the Pre-and- After Tax Deductions for the Voluntary Benefits selected by the Employees, and Reporting Requirements. 
> Federal and State Compliance Requirements - For ERISA/COBRA, 5500's, Form M-1, W2 and 1099 Reporting, Summary of Benefits and Coverage (SBC) and other Reporting Requirements.
> Managing Employee Assistance Plans (EAP), Mental Health Benefits, and Family and Medical Leave (FMLA) - For providing Employees, Individual, and Family Health and Life Style Opportunities.
> Wellness Plan Administration - For providing Employees and their Families Wellness Plan opportunities to encourage Better Health and Improved Life Styles while reducing unnecessary Health Care Costs.

To have a successful and compliant Employee Benefits Design, Plan, and Implementation back-up Services are necessary and often required. Unfortunately, the choices for Brokers and Employers are limited:
> The Employer can attempts to do all or part in-house!
> The Broker provides - or outsources) all or part of the services to obtain and/or keep the Employer Account!
> The Insurance Carriers may provide some services on a limited basis!
> Outsourced Services are utilized for all or part - paid for by the Broker and/or the Employer - some of the costs may be passed through to the Employees!

As mentioned above, for the Brokers and Employers the decision often comes down to a Time/Cost/Benefit Analysis. The Brokers and Employers decisions are based on related considerations.

The Broker - At an ever-increasing rate and cost, Brokers are being called upon by Client, Potential Clients, and Insurers to provide increased services to support the Plans and Programs they recommend and provide. Unfortunately most of these services provide little or no income. This is often in the face of shrinking 1st year Commissions and Renewals generated from the sale of Plans and Programs. When considering, recommending and/or utilizing Outsourced Services, the Brokers should ask themselves the following questions:
A) Their Organization's Internal Size and Capacities?
B) Their Organization's level of Expertise?
C) The quality of Outsourced Services available in their Marketplace?
D) The potential Income generated on an Account-by-Account Basis to off-set Costs?
E) What Services various Insurance Carriers will Provide and at what Cost?
F) The type and financial wherewithal of their Employer/Employee Target Markets -
the Employer's in-house capacities and/or willingness to pay for Outsourced Services?
G) What their Competitors are Providing and Paying For?
H) Their Organization's positioning with Clients and Potential Clients - Will the Employers take their advice? Are they willing to shift to a "Fee Based" model?
I) The Liability involved in performing the Services in house?
J) Opportunities to Joint Venture, Co-Source, or Affiliate to provide Services and retain Account Control?

While the above may seem laborious - even for the small to mid-sized Broker Markets - the answers to these questions can make the difference between a Successful Plan, an Ongoing Disaster, or Losing a Client!

The Employer - To retain and compete for the best Employees, all Employers must attempt to offer the Best Possible Benefit Plans, Programs, and Services. While in the past Insurance Carriers and Brokers offered many Services - and claimed they were absorbing the cost of the above Services - in actuality the costs were built into the Premiums, Fees, and Commissions. To contain Internal Costs and to Limit Premium Increases, Insurance Companies are Cutting Services offered to Employers and Brokers. At the same time they are Reducing Commissions to Brokers while shifting to them the responsibility for Administrative Services. To provide the Plans and Programs - and the required Services - the Employers have limited choices:
> Perform all or part of the Services In-House!
> Limit the number of Plans and Programs offered to the Employees!
> Demand that the Carriers and/or Brokers provide or pay for the Services!
> Outsource the Services to Professional Organizations who provide the expertise!

When considering the above, the Employers should ask themselves the following questions:
A) The Time and Capacities of their HR Departments?
B) The Cost and Time involved in Hiring and Training HR Staff to Perform these Services, including: Salaries, Hourly Wages, Benefits, Vacation, Sick Days, etc?
C) The Time taken away from normal HR activities - Hiring, Training, and Retaining Employees?
D) The potential Legal and Regulatory Liabilities and Penalties involved when attempting to perform the Services In-House - by Oversights, Omissions and/or Errors.
E) The availability of Quality Outsourced Services given your Location(s), the Number of Employees, and their Geographic Distribution?
F) The Cost of Outsourcing the Services?
G) What you can Afford?

From the above it should be obvious that "To Outsource or Not" when offering Employee Benefits is an involved and difficult decision! There are many factors to consider for the Brokers and the Employers. With the complexities of offering Employee Benefits - and some of the new ramifications of PPACA - many Employers are at least considering getting out of the Benefits Market. Most studies agree that most Employers will continue to offer Employee Benefits - Traditional Fully Funded (Insured) Plans and/or Self-Insured Plans. Fortunately, the cost of related Technologies Services has decreased and the Quality of Outsourced Services has Increased!

We invite you to Join our Linkedin Group, Insurance Forum, for more Discussions!
If you have questions or would like more information:
Email - Phil at max@benefitplace.biz or Call 216.577.5579