Benefits Payment Exceptions Cost Employers 62.5 Hours Monthly

The Hidden Cost of Benefits Administration

Employers administering health and wellness benefits face a substantial but often overlooked operational expense: the staff time consumed resolving payment exceptions. For a benefits program serving 5,000 active accounts, manual intervention on eligibility disputes, reimbursement requests, and reconciliation issues can consume more than 62 hours of employee time each month.

According to research from PYMNTS Intelligence produced with SoFi Tech Solutions, when 5% of accounts require manual attention monthly—a conservative estimate for many programs—the resulting 250 exceptions demand roughly 15 minutes of staff attention apiece. At a loaded labor cost of $45 per hour, that translates to more than $33,750 in annual capacity that could be redirected through automation.

Why it matters

Benefits technology decisions are typically framed around features and compliance. This analysis reframes the conversation around operational efficiency, quantifying the ongoing labor cost of platforms that generate frequent exceptions. For benefits executives, the metric shifts from "what does this system cost?" to "how much staff time does this system consume after deployment?"

Where Exceptions Originate

The volume of manual cases stems from how benefits infrastructure handles routine transactions. Programs relying on batch processing, manual file transfers, or disconnected systems between enrollment, eligibility, and claims create friction points where transactions stall and require human review.

Category-level spend controls can enforce eligibility rules at the point of purchase. Real-time authorization systems can approve or decline transactions based on current balances and program rules. Direct API connections between systems eliminate manual data handoffs. Each capability reduces the likelihood that a transaction will require staff intervention after the fact.

Measuring the Exception Rate

The PYMNTS Intelligence report, titled "Making Health and Wellness Benefits Perform: What Modern Card Infrastructure Changes," suggests benefits administrators track several operational metrics: the number of transactions requiring manual handling each month, the average time per exception, root causes, and whether exceptions can be prevented upstream rather than simply processed faster.

The 62.5-hour monthly figure may carry more operational significance than the dollar cost. Benefits organizations rarely eliminate positions when exception volumes decline. Instead, they redirect capacity toward program monitoring, participant support, and administering additional benefits—activities that improve the employee experience rather than simply keeping the system running.

Straight-Through Processing for Benefits

The operational model mirrors straight-through processing in other financial services contexts: maximize the share of activity completed without human touch and reserve staff judgment for genuinely complex cases. Platforms that centralize administration give benefits teams a unified view of exceptions and program performance, making it easier to identify patterns and address systemic issues.

For organizations evaluating benefits infrastructure, the calculation extends beyond licensing fees and implementation costs to include the ongoing labor required to operate the system. Automation returns value not by eliminating staff but by freeing capacity for higher-value work.

The findings were first reported by PYMNTS Intelligence in collaboration with SoFi Tech Solutions.