How to Avoid Surprises With Benefits Administration Pricing

January 14, 2021

Pricing is one of the many factors to consider when choosing the right partner for your employee benefits. And even pricing isn’t that simple, because there are a variety of fees that can emerge throughout a plan year that weren’t top of mind at the point of sale. Transparency is coveted. So what should you look out for when judging a vendor’s pricing?

Benefits administration pricing

Account maintenance fees

Just as banks charge monthly fees for checking account maintenance, so do health savings account (HSA) administrators. These HSA account maintenance fees are often not disclosed as clearly because they’re not an employer fee. The fee is applied to the participant. And, in many cases, the fee might be waived if the participant has a certain balance in their account. 

Do we charge this fee? We do in some cases. 

HSA transaction and investing fees

HSA participants may also be charged a variety of fees specific to activity within their HSA. Some administrators may charge transaction fees for distribution of funds or for re-allocating funds to and from an HSA’s investment account. The latter fee could discourage participants from investing, which is one of the biggest perks of having an HSA. 

Do we charge these fees? Not at this time, although there is a custodial management fee (which is a standard in the industry).

Additional debit cards

When a participant enrolls in an employee benefits plan, they may need additional debit cards for a spouse or any eligible dependents of the plan. Or the participant could need a replacement card if their debit card is lost or stolen. When this occurs, some administrators may charge the employer of that participant a fee when they request additional debit cards. That fee could then be passed onto the participant. 

Do we charge this fee? Not at this time.

Paper notifications

Due to the cost of paper, administrators will often charge a fee to employers who request their employees receive hard copies of certain types of documents or notifications (rather than digital versions). These could include, but are not limited to:

  • Tax documents

  • Account statements

  • Reimbursement notifications

Do we charge this fee? For some paper notifications, we do. Digital versions for the above are free.

Check reimbursement fees

Participants in an HSA, flexible spending account (FSA), and other types of benefits may prefer to be reimbursed for out-of-pocket expenses by check rather than direct deposit. An administrator may charge the participant a fee for sending a check. 

Do we charge this fee? Not at this time.

NDT fee

Non-discrimination testing helps to make sure there isn’t discrimination between highly compensated employees (HCEs)/key employees and other employees at a company. Some administrators may charge a flat fee for testing, while others may charge for each time a plan is tested.

Do we charge this fee? Our base testing is free. However, employers can pay $500 per year for unlimited testing of their plans. 

We provide our full fee schedule and buy-up fee schedule with every proposal. If you have a client interested in our administration for any of the products mentioned above, please reach out to us!

And if you’d like to learn more about the client or participant experience with Discovery Benefits, get your free Guide to a Positive User Experience by submitting this form.

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