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Finding Balance In A World of HR Technology

2/28/2017

1 Comment

 

Author

Grant Ameel

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In nearly every industry there’s always been an emphasis on advancing technology to make providing a service or product more efficient and cost effective.  
The HR administration industry is no exception – if not a textbook example. For those of us that remember the days when employee personnel files, FMLA cases, COBRA annals, etc. were managed and maintained using physical paper files, we can attest to the rapid growth of HR technology in recent years. The development and implementation of human resource information systems (HRIS) or human resource management systems (HRMS), has and will forever change how company HR departments and third party administrators (TPAs) operate on a fundamental basis. Long gone are the days of large metal filing cabinets full of manila folders organized either alphabetically or chronologically.  As the responsibilities of HR departments have continuously progressed in complexity, HR technology systems have advanced equally to meet the demands of this ever-changing landscape. The recent advancements in HR technology were not only predictable, they were inevitable. After all, HR departments are non-revenue generating sectors – reducing overhead and achieving long term cost reduction tactics are often the top priority for most company executives when it comes to human resources management. However, is it possible that this increased reliance on HR software could potentially lead to, for lack of a better term, a “compliance bubble”?

​In this post we’ll examine the industry’s push towards “Automated COBRA” and the dangerous notions we caution our clients and brokers to be aware of when it comes to streamlining their COBRA.

Our Philosophy

“Based on our 2016 research, CobraHelp is one of the few COBRA vendors that continues to audit every single IRN and QE request that is issued, whether it be sent from a payroll company via file feed, or submitted via our website. The reason that we do this is that we have found that most file feeds issued by third parties still require data clarification and correction.  By issuing accurate notifications and maintaining current data on file from the get-go, we are reducing risk for all parties involved and expediting the process as a whole. Being that COBRA is so time-sensitive, a streamlined, intuitive, yet safe COBRA process is key and eliminates the dangers that delays can impose upon employers and agencies.” – Heather Underwood, CobraHelp Vice President
​
To be clear, by no means are we against the progression of HR Technology; we pride ourselves on staying current with all aspects of the industry - whether it be changes in legislation or technological developments. However, we do not believe that COBRA should be [can be] completely hands-off for plan administrators. While our file feed options and website features do allow for a much more modern approach and come close to full-automation, we will never offer a service that simply issues notices without someone validating the data. In recent years, more than ever, there has been a swell of lawsuits for compliance issues related to COBRA, which can be very costly (for more on that, see our previous post HERE). With that being said, we just can’t justify placing that much trust in a machine—not when it can impact an entire company or negatively impact an individual’s health benefits. 
Are we saying that modern HRIS systems and advances in HR technology are all wrong? Certainly not!  There are many positive aspects in keeping up with modern technology when it comes to employee benefits and human resource responsibilities, no doubt. In this article, we’re simply shedding light on some of the often over-looked aspects of HR Technology, and talk about why finding a good balance between human involvement and technology is crucial to operating a successful COBRA program for any employer (or insurance agent).
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Pitfalls of a Fully Automated COBRA Service

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​The Domino Effect
Recently developed COBRA administration software aims to fully integrate with a company’s HRIS so that it can auto-generate all aspects of the COBRA notice timeline. Ultimately, the goal here is that an employee’s information only needs to be entered once upon hire. When a new employee enrolls in benefits they’re entered in the HR Portal and the system automatically generates the Initial Rights Notice. Conversely, anyone that is terminated in the portal, the system will automatically generate the QE notice. It’s a great concept in theory, but it’s also contingent on the initial data being entered accurately.  If any information entered into the HRIS for a new hire is inaccurate, then anything that system - or any system connected to it - generates will consequently also be inaccurate.  For instance, let’s say an employee misses more than 3 days of work for a medical reason, they are sent the FMLA/ADA paperwork, it’s not returned within the time frame, and the employee is thus terminated and sent COBRA paperwork.  If that employee’s address, for example, was entered incorrectly in the HRIS at the time of hire, then the automated notices the system generated and sent for that employee’s IRN, LOA, and COBRA would not have been received by participant. Therefore, that initial data-entering mistake could lead to multiple compliance issues stemming from any number of notices the system auto-generates. 
​Lack of an Audit Process
As nice as it would be to not have to bother with the minutiae details of COBRA, the fact of the matter is that the risk of non-compliance is too great to an employer to have a totally hands-off approach.  One might make the assumption that a fully automated COBRA system will operationally eliminate or reduce the risk of error. We at CobraHelp would strongly caution against making that assumption. It has been our experience that a great deal of the third-party file feeds we receive (mostly generated from a HRIS) still require data clarification and corrections.  If those same files were fed into a fully automated COBRA system where the data wasn’t manually checked, chances are there would have been a number of compliance vulnerabilities. The issue with having a COBRA administration service that has no manual audit process is that by the time a problem is realized, it could be too late.
​Over-reliance
In this day and age, technology is heavily involved in nearly everything we do. As with most things in life though, too much of any one thing can be problematic. Which is almost certainly the case when it comes to our increasing dependency on technological automation. Even more so in the HR industry when the consequences could lead to costly lawsuits and fines. Pulitzer Prize Finalist author Nicholas Carr wrote a ​book titled The Glass Cage: Automation and Us and in it he identifies what researchers call the levels of automation. Essentially there’s 10 levels, ranging from humans making all the decisions and actions to computers making all the decisions and actions. Carr argues that the ideal system in any industry for any task is smackdab in the middle of the spectrum, Level 5: The computer executes the suggestion after human approval.  HR administration should be no exception.  COBRA software is only as good as the data that is put into it, which is why even checks and balances between humans and machine are essential.  Becoming too complacent or reliant on automated COBRA systems leaves the door open for error, oversight, and negligence.
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Take Away
While change is inevitable, and even more so with the exponential advancements in technology, some things should remain true. One such thing in the HR industry should be checks and balances. Even if systems allow for higher automation than ever before, there should at least still be a rigorous audit process to insure continuity and accuracy within those systems. The reason for that is quite simple – there’s just too much of a risk not to. The Human Resource department for any company is unlike any other part of the business: it’s a non-revenue generating sector, and yet, it’s vulnerabilities through litigation and government fines could potentially lead to the demise of the whole establishment. That being said, employers should use caution when considering the idea of having a completely hands-off approach to, not only COBRA, but any HR process. After all, you can’t take “human” out of “human-resources”.  
1 Comment
Targeted Legal Staffing Solutions link
12/21/2019 10:41:31 am

Anything that makes works easier, faster and advance would make the task effective and more productive.

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