By Donna Marshall, MBA
CEO, Knowledge Benefits
Who administers contracts for billions of dollars each year and covers healthcare benefits for over 150 million Americans? Health benefits administration managers and executives do. A study just published by the International Foundation of Employee Benefits Plans cites that benefits account for an average of 32% of payroll costs with the largest amount spent on health insurance, a total of 8% of payroll. Companies like Starbucks and General Motors report spending more money on healthcare than beans and steel respectively. Employers are in the healthcare business and need the expertise to administer healthcare benefits.
Salary and skills
A recent salary guide published by Ajilon shows the Bureau of Labor Statistics recorded 547,000 jobs for human resource specialists in 2016 and forecasts an annual growth of 7% each year. A significant number of these jobs are for health benefits professionals. According to the salary survey, a benefits professional at the director level can expect an average base salary of nearly $150,000 in 2019, among the highest compensation within HR specialties. So how does one get from HR specialist to benefits director?
Skills that job seekers can expect to find in postings for top benefits administration jobs include the ability to evaluate benefit plans to ensure they are cost effective, competitive, and meet the needs of the company and employees. Enlightened employers also seek candidates who make recommendations for new vendors, plan designs, and funding strategies. But the most effective health benefits executives know about population health and analytics, contract negotiation with performance standards, and quality and safety in healthcare. Demonstrating expertise in these areas will enhance your impact and influence in your organization.
In addition to the skills and number of years’ experience, many employers prefer candidates for top positions who are SHRM Senior Certified Professionals (SHRM-SCP). Such credentials show competency that employers value, with at least one study citing a $20,000-per-year differential for managers with SHRM certification.
Moving up the ladder
So, how do job seekers get the experience they need to move to that next job? Do current certification courses allow for specialization in the skills that make a successful health benefits administrator?
We conducted a small focus group of experienced health benefits executives two years ago. We found that half of the group did not have a SHRM or Certified Employee Benefits Specialist (CEBS) certification. They learned “on the job” and cited a lack of specific training in their specialty, noting a reliance on seminars, co-workers, and benefits brokers as sources of new information. They were satisfied managing cost increases to the middle of the pack and following latest trends in health benefits design without analyzing the health impact on their specific population.
The cost of not having a health benefits expert
What is the opportunity cost for lack of strategic health benefits executives? One clear example: Estimates of waste in the healthcare system show at least 30% of spending goes to services that are overpriced, not needed, and sometimes actually cause harm. Yet, few employers seek to intervene in this system of health care that features unwise care and out-of-control costs.
Tenacious employers can lead the way in saving dollars on behalf of their employees and their own bottom line. Employers can seek health benefits executives and managers who have the education and the skills to be effective in this specialized arena. But where is this exceptional, well-qualified group of health benefits executives? We need to build that cadre now with a career ladder of expertise and competency in the specialized area of benefits administration.