Benefits administration exceptions carry a hidden HR labor cost

What counts as an exception?

Mostly routine cases: eligibility disputes, reimbursement requests that need follow-up, reconciliation errors between payroll and the account provider. Someone in HR or benefits administration ends up resolving each one, and a single case might take five minutes.

Across a growing market those minutes add up. Devenir counted 41.7 million HSAs holding nearly $174 billion at the end of 2025, and account numbers were up 6 percent from a year earlier.

Employers are also watching benefits spending more closely than usual. In Gallagher’s 2026 Benefits Benchmarks survey of 3,717 US organizations, 36 percent reported health plan premium increases of at least 10 percent at their most recent renewal, even after making plan changes, as HRD reported in its coverage of how employers are tightening benefits spending this year. A separate MBWL International survey found 36 percent of global employers are prioritizing automation of administrative processes, according to HRD‘s report on why rising benefits costs are forcing HR to rethink its approach.

Three benefits administration numbers for the next vendor review

Fees and service-level agreements cover only part of what an HSA, FSA or HRA administrator costs. The rest shows up in three internal figures: how many transactions or accounts need manual handling each month, how long each case takes, and why they happen.

The third gets the least attention. Recurring eligibility-file errors tend to point to a data feed or integration problem. Heavy reimbursement volume may reflect plan design, or employees who don’t understand their accounts; 57 percent of HR professionals surveyed by InComm Benefits said they already use artificial intelligence in benefits education, according to HRD‘s report on how HR is turning to AI for that job. Reconciliation failures and broken data transfers are more likely to trace back to the administrator.