Corporate benefits departments are shifting, growing, and responding to the needs of their employees by outsourcing more time-consuming benefits functions, according to a new survey conducted by the International Foundation of Employee Benefit Plans.
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The survey, Corporate Benefits Departments: Staffing and Operations, revealed that companies report outsourcing 40% of their benefit functions, most commonly for:
- Employee assistance programs (EAPs): 77%
- Flexible spending accounts (FSAs): 69.4%
- Consolidated Omnibus Budget Reconciliation Act (COBRA): 63.6%
- Retirement benefit payments: 56.3%
- Pharmacy benefits administration: 52.5%
Outsourcing is growing, the survey data show: More than one-third of companies experienced an increase over the past 2 years. The number one reason companies outsource is to tap into more specialized expertise (47.8%). Other companies cite technology (17.2%), costs (12.2%) and risk (11.4%) as their main reason for outsourcing.
"An outsourcing increase is a positive thing for benefits departments," says Julie Stich, CEBS, research director at the Foundation. "Benefits staff are working smarter and more efficiently by choosing the mix of outsourcing, cosourcing, and insourcing that's right for them." Stich adds that more benefits departments are adding staff members, creating balance and strategic focus among departments.
What’s still handled in-house? A majority of companies handle annual enrollment (62.4%), Family and Medical Leave Act (FMLA) administration (59.5%) and benefits communication/education (53.9%) fully in-house. Additionally, only rarely do companies fully outsource benefits strategy/design (6.7%) and benefits communication/education (1.5%).