Benefits costs are rising while regulations get tighter. HR and Finance leaders are asked to manage both without sacrificing employee experience. The risk isn’t just overspending—it’s fines, audits, and eroded trust if compliance slips. The good news: a handful of practical moves can improve cost control and keep your program audit-ready.
Here are four to prioritize now:
- Build a clean plan-data foundation
Fragmented plan documents, scattered vendor agreements, and outdated fee schedules make both budgeting and compliance difficult. Start with an inventory of every plan and program—medical, pharmacy, dental, vision, HSA/FSA/HRA, life, disability, and wellness—then centralize:
- Current plan documents (SPD, SBC, ERISA wrap)
- Eligibility rules and waiting periods
- Contribution strategy and affordability testing approach
- Vendor contracts, BAAs, renewals, and service levels
Turn that inventory into a governance calendar so you’re not chasing notices, 5500s, or 1095-Cs under deadline.
- Tame medical and pharmacy trend with targeted levers
Broad cost-shifting to employees creates dissatisfaction and potential affordability issues. Instead, focus on levers that improve value:
- Claims analytics to pinpoint cost drivers (e.g., site-of-care shifts, out-of-network leakage, musculoskeletal, cardiometabolic)
- Care navigation and virtual care to steer members to higher-quality, lower-cost settings
- Pharmacy oversight: formulary optimization, specialty management, biosimilars strategy, and transparency tools
- Dependent eligibility verification to ensure your plan is covering the right people
These steps reduce waste without undermining access.
- Design for compliance and behavior—together
Plan design is where compliance and cost control converge. Align contributions and eligibility with ACA affordability, and prepare for nondiscrimination testing. Conduct mental health parity comparative analyses on NQTLs (e.g., prior authorization) to validate alignment. Then nudge the right behaviors:
- Consider HSA-forward designs with employer seeding to encourage smarter utilization
- Use simple incentives tied to preventive care, not punitive hurdles
- Keep communication clear and plain-language to minimize errors that trigger appeals or complaints
Small design details can prevent costly missteps later.
- Operate on an audit-ready cadence
Compliance isn’t a once-a-year scramble. Establish a repeatable rhythm:
- Annual document refresh (SPD/wrap, SBC, plan amendments)
- Notices and disclosures (HIPAA, COBRA, Medicare Part D creditable coverage, WHCRA, CHIPRA)
- Vendor oversight (BAAs on file, SOC reports reviewed, issue logs maintained)
- Testing and reporting (ACA forms, parity analyses, nondiscrimination readiness)
- Mock audits and documentation logs so you can produce evidence quickly if asked
An audit-ready operating model protects the plan and builds confidence with leadership.
A brief example
A mid-market manufacturer was staring down a tough renewal and a patchwork of compliance tasks spread across HR, Finance, and multiple vendors. By consolidating plan governance into a single calendar, completing a dependent eligibility review, and tightening pharmacy oversight, they stabilized near-term costs and improved plan documentation. Within the year, they passed an internal readiness review and were better prepared for inquiries from regulators and carriers—without diluting their employee value proposition.
Where to go from here
You don’t need a sweeping overhaul to make real progress. Start with clean data, pick two or three cost levers with outsized impact, and lock in a compliance cadence that scales. If you want help prioritizing, Kapnick can assess your current state and build a right-sized roadmap that fits your culture and budget.
Ready to cut waste and reduce risk? Connect with Kapnick for a benefits cost and compliance review.
