In-house Benefits Administration or Outsourced: Which Is Better?

3 min readAug 9, 2021


To keep the business going better, the executives keep brainstorming over how to mitigate the unwanted costing factors and finding efficiency-increasing approaches all the time. One of the experts from a renowned corporate organization has stated over healthcare specifically that if there is something healthcare business that consumes the most time, money, as well as manpower, it is benefits administration.

If we are to define benefits administration for the healthcare business, it is to collect information regarding the benefits and the beneficiary itself and report to the claim provider. This very easy-to-write thing is not so very simple to execute due to the presence of very probable discrepancies and confidentiality required simultaneously.

A smart benefits administration software is incorporated for this very purpose because it helps in mitigating the most common issues in the healthcare sector through EDI solutions. The common issues are-

  1. Standardization of formats
  2. Manipulation or losing of data
  3. Delay in exchange of crucial information
  4. Poor decision-making due to delayed exchange of information, etc.

Make sure you make a list of necessary functions in the benefits administration software. As far as in-house and outsourcing of benefits administration are concerned, that is a subject of choice, and EDI solutions would be taken into use in both cases.

Let us figure out some crucial points that support and some that would speak against the ways of administering the health benefits-

Factors in favor of In-house Benefits Administration

  1. The best thing about keeping benefits administration managed in the house is that we can enjoy comparatively more customized services. The reason is, the benefits management team knows who they are providing benefits to and would have a better inter-communication band.

In-house administration can handle things better and does not let things go over-board due to mistakes which could be quite troublesome in the case of outsourcing.

2. When we manage benefits by own, we would obviously not delegate the responsibility to any other manager. This allows us to have complete control over the benefits administration which we would not have in the case of outsourcing.

3. In this case, we can keep our employees stick to their desired and one-time assigned policy provider. However, in outsourcing, the services provider could change the policy provider giving the same benefits but without your consent.

Check on the main ingredients of benefits administration software that favors in-house benefits administration.

Factors in favor of Outsourced Benefits Administration

  1. Despite the fact that outsourcing of benefits administration isn’t favorable for every scale of a business, there are some tasks that are better outsourced irrespective of the business scale. And those complex functions are-
  • COBRA Administration
  • FSA administration
  • 401(k) administration

2. Due to frequently changing compliance requirements and regulations, it is desirable to have it outsourced so that maximum time could be given to the niche or other business requirements.

3. When you outsource benefits administration, you are open to hiring more than one health benefits provider. However, in the other case, managing with one provider is complex, two or more than that isn’t a sweeter cup of tea.

4. Paperwork, claim to process, maintaining the compliance issues, and being available for employee inquiries are some things that consume a lot of time, but that would not be the case in outsourcing.

These are some of the aspects in favor and against of both the ways in which benefits administration can be managed. It is up to the business owner’s take on overall aspects whether it is suiting with the business needs or not? Whether the budget is there or not? Does the team have enough skill to handle the same or not?

You may get the consultation done from professional IT services as the above-mentioned aspects are some of the very crucial to be analyzed before adopting a strategy for benefits administration.




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