Case Study #2

The Critical Importance of Benefit Reconciliations

 

Case Study:

Client
Third party management company in business for 43 years (107 employees)

Background
A new client was worried that benefit deductions had been mishandled by their previous  payroll provider. Among the causes for concern: employees would lose trust in the employer, the business could face possible discrimination during an audit and loss of money for unrecoverable benefit deductions.

Approach
NEMR conducted an audit that revealed multiple errors by the previous vendor. Employees who worked at more than one location had each been overcharged hundreds of dollars over a period of six months. Other staff members had not been charged at all for coverage so the client was paying a disproportionate amount for employee benefits.

Our HR team coached the company owners and managers on how to correct the errors swiftly and smoothly and communicate the issues so all employees remained happy. Ultimately, the owners decided to forgive the employee underpayments, and those employees who were overcharged received a large credit much to their surprise and delight.

To ensure ongoing accuracy and compliance, NEMR’s benefits department established proper procedures including monthly reconciliations.

Results

  • Employee morale is protected.
  • Communication has improved with owners, managers and employees all having a direct point of contact for benefit questions .
  • Executives and supervisors have more time to focus on running the business.
  • The benefit contribution formula is compliant and monitored

Reconciliation of Benefit Plans
The benefit accounting process is complicated. Brokers have to invoice clients correctly, pay insurance companies the proper amount and ensure employees are contributing the exact amount towards the coverage they elect. There is no room for error.