Offering employee benefits is no longer optional. Today, it’s essential for attracting and retaining top talent, but it’s also one of your company’s largest and most overlooked expenses.
Yet despite the cost, most employers don’t actually reconcile their benefits bills.
Instead, they trust HR or accounting to “eyeball” invoices. And that’s where the hidden payroll leaks begin.
The Cost of Eyeballing vs. Reconciling Health Benefits
Here’s what usually happens:
- HR receives the carrier invoice
- They glance at who’s been hired or terminated
- They check if names match. Sally retired. Jack was added. Done.
- Accounting checks if the total bill was paid. Debit done
But no one checks the details of what’s inside the bill.
That’s not a true benefits reconciliation. It’s just surface-level review.
What a Real Reconciliation Should Include
A proper benefits recon goes deeper than headcount. It answers key questions like:
- Is each employee enrolled in the correct plan
- Does the benefit billing match payroll deductions
- Are STD, LTD, and life insurance premiums calculated accurately based on wages and age
Without this level of review, you could be leaking hundreds or even thousands of dollars per employee each year.
Example: One Wrong Plan = Big Cost
Let’s say:
- An employee enrolls in a high deductible plan, but the carrier bills you for the PPO
- That PPO plan costs $125 more per month
- If the error goes unnoticed for 6 months, that’s $750 lost
- Most carriers won’t issue a refund after 90 days. That clause is likely in your contract
And that’s just one mistake. Multiply it across several employees, and the numbers grow quickly.
The Hidden Hazards of Payroll Deductions
Recon errors aren’t limited to insurance invoices. They often hide in payroll deductions too.
Common issues we see:
- Hourly employees out on leave miss deductions entirely
- Salaried employees on unpaid leave still accrue benefit costs, but no deductions are taken
- Missed weeks (even just one) result in lost dollars that go unchecked for months or even years
$75 missed in one week multiplied by multiple benefits and multiple employees equals thousands lost over time.
These aren’t one-time errors.
They accumulate. They compound. They drain your profits.
Why Systems Alone Aren’t Enough
Benefits technology helps. But it’s only part of the solution:
- Tech is only as accurate as its setup
- Enrollment feeds often introduce errors
- No system is foolproof without human auditing
A real solution requires both:
- Technology for automation and scale
- Human oversight to verify accuracy and catch what tech can’t
Don’t Assume. Audit.
Think this isn’t happening in your business
Ask your team:
- Do you have a reconciliation spreadsheet
- Does it go beyond “who’s on and off the plan”
- Are payroll deductions, plan types, and premiums compared line by line
If the answer is no or if the process is unclear, you’re likely losing money.
Final Thought: Small Errors Add Up Fast
Benefit billing mistakes and payroll deduction gaps are common. And in most companies, no one is catching them. If you don’t have the capacity to perform monthly, line-by-line audits, that’s okay. We do this work to the penny every month for every client.
You don’t have to go it alone.
If you want clarity and confidence that your payroll and benefits are aligned, we’re here to help.
