Employee benefits are integral to the success of small and midsized businesses. Without comprehensive benefits, it becomes much more difficult for employers to attract and retain highly qualified employees. A competitive benefits package includes a number of plans, including health, dental and vision insurance, life insurance, disability insurance, a retirement plan, and potentially even more options.
Now, imagine trying to execute the administration of these plans both efficiently and effectively—all while absorbing potential risks associated with each one. It’s a daunting and complex task. Here are three common challenges we see employers struggle with:
Common Challenges Employers Face With Benefits Administration
There are minimum standards companies must meet when offering certain benefits. For instance, The Employee Retirement Income Security Act of 1974 (ERISA) has pages of reporting and disclosure requirements on topics pertaining to retirement, health, and welfare benefits.
On the other end of the spectrum, the Affordable Care Act has provisions that impact businesses in different ways. Compliance is a beast to contend with. There is no room for error—and if you make a mistake, you could end up on the IRS’s radar or invite possible litigation.
2. Time Management
Running a benefits program is time intensive. Businesses may have five or more vendors to manage for things like onboarding, termination, life changes, employee questions, annual renewal reviews, and voluntary and required communication. Additionally, systems and processes need to be in place in order to manage all the information effectively. If benefits plan administration isn’t your company’s forte, then you will have a steep learning curve.
3. Healthcare Cost
Healthcare costs are rising every year, and you have many things to consider. Do you share more of the cost with employees, lessen the benefits, reduce your workforce, or choose cheaper options? Or perhaps you’re considering adding wellness programs and health savings accounts. No matter what you’re faced with, thoroughly vetting all of your options and finding the right insurance that doesn’t hurt the bottom line is challenging.
How To Handle These Challenges
These are the most common challenges in benefits administration, but they are by no means the only ones! When it comes to facing these issues, my advice is simple: Outsource as much of your benefits administration as possible. Depending on the size of your business and your location, there are a number of potential partners who can help with some—or all—of the issues you face.
- A PEO (like Genesis) can help you take all of this off your plate so you can focus on your business.
- If PEO isn’t the best fit for you, there are other HR providers who can help fill in the blanks.
Either way, you should seek help in these complicated areas and avoid wasting lots of time and money.