Managing the financial aspects of employee benefits is a complex task for employers. Two common methods for handling employee benefit payments to a carrier are list-billing and self-bill.
In this article, we’ll answer the following questions about list billing and self-billing for employee benefits.
- What is list billing for employee benefits?
- What are the differences between list billing and self-billing for employee benefits?
- How are invoices generated for employee benefits?
- What do invoices for employee benefits include?
- Who has to fix discrepancies with employee benefits billing and how are these identified?
What is list billing for an employer benefits plan?
List-billing is a method used by employers to receive and manage their employee benefit invoices. Here’s a breakdown of what list-billing entails:
List-billing is a process in which the insurance carrier sends a detailed invoice directly to the employer, summarizing the cost of various employee benefits such as health insurance, dental coverage, and retirement contributions.
How is the list bill sent from the carrier?
The carrier typically sends the list bill invoice on a regular schedule, often monthly. It includes itemized charges for each enrolled employee, listing their coverage details and premiums.
What does the list bill include?
List bills includes a wealth of information, such as employee names, coverage types, premium amounts, and any changes or adjustments made during the billing period. This detailed breakdown helps employers understand and reconcile their benefit expenses.
What is self-billing for an employer benefits plan?
On the other hand, self-bill is a method that empowers employers to generate their own benefit invoices and send them to the carrier. It’s essentially saying, “Carrier, here’s what we think we owe you.” The employer also provides backup documentation for validation. Here’s a closer look at self-bill:
What is Self-Bill?
Self-bill is a process where employers take on the responsibility of generating invoices for their employee benefits and provide them, along with a payment, to the carrier. Instead of relying on the carrier, the employer calculates and issues the invoices themselves.
How is Self-Bill Generated?
Employers typically use their own payroll and HR systems to generate self-bill invoices. They must accurately calculate premiums for each employee based on their benefits selections and any changes that may have occurred.
What Does Self-Bill Include?
Self-bill invoices generated by employers include similar information to list bills, such as employee names, coverage details, and premium amounts. However, the key distinction is that employers have full control over the accuracy of the information.
Comparing List-Billing and Self-Bill
Now that we understand the basics of list-billing and self-bill, let’s compare these two approaches:
List-billing places the responsibility for generating invoices on the carrier, which may lead to inaccuracies if there are discrepancies in employee data. Employers must closely review list-bill invoices and follow up with the carrier to rectify any errors.
In the case of list billing, employers may find discrepancies in the carrier-generated invoices, such as missing or incorrect employee information. It is then the employer’s responsibility to closely scrutinize these invoices and promptly follow up with the carrier to rectify any inaccuracies. This process can be time-consuming and may lead to delays in resolving issues related to premiums, coverage, or benefit adjustments. On the other hand, with self-bill, the employer maintains greater control over the accuracy of the invoices from the outset, as they are responsible for generating them based on their internal records. This can reduce the likelihood of discrepancies arising from carrier errors and streamline the reconciliation process, ultimately saving time and ensuring the correct allocation of benefit costs.