As companies grow and people shed the 'multiple hats' for greater specialization, best practices for effective employee benefits plan design includes all c-suite or senior leaders. A previous blog identified the role of the CEO or owner (3 Ways CEOs Can Support Benefits). Since quite often the champion for employee benefits is the Chief Human Resources Officer (CHRO) or HR team, the extensive planning, implementation, coordination, and communication can be a heavy lift. When one individual or team shoulders a responsibility this complicated, seeing the forest through the trees can be difficult.
Enter the Chief Financial Officer
(CFO or other finance professional)
Given the training, experience, and position within the company, CFOs can support benefits as the ideal internal peer-reviewer of the benefits design and vendor relationships by engaging these three skills:
Generally a given when talking about CFOs; however, can be under-utilized as it relates to benefits. By applying the high level of financial literacy a CFO deploys to other areas of the organization, CFOs can effectively and efficiently:
- Identify any gaps in products. Think relationships between short term disability, long term disability and life/ADD products.
- Identify and comprehend the various healthcare finance options available to the company, including self-funding and captives.
Financial Performance Evaluation
Effective brokers are engaging their clients in claims evaluation. But what do those reports mean looking backwards and forwards? CFOs have the tools to consume that information, articulate interpretations to the team, and provide projections; or, at a minimum, double check the assumptions of the vendor-partners providing their analysis.
Contract Review and Negotiation
In many situations, and particularly as companies unbundle the plan's service providers (see To Bundle or Unbundle), there could be a number of financial commitments, contracts, and vendor-partners engaged. For example, in self-funded plans the relationship between a third-party administrator (TPA) or stop-loss carrier and the company; and/or, the relationship between the TPA and stop-loss carrier are critically important to have a clear understanding of roles, responsibilities and risks. As companies take more control, the leaders may want language or benefits that require customized summary plan descriptions (SPD).
The decision around bringing more people into the tent has less to do with whether the primary champion can perform a specific task. Rather, it shifts the focus to how the champion employees can leverage each person's high-level competencies. Building a strong coalition within the top leadership of the organization ultimately serves the employees.