(by Andres Rojas)
Although employee benefits were already a big issue before COVID, the pandemic has skyrocketed their importance. Indeed, offering a benefits package is an easy way to attract and retain talent. Managing benefits, unfortunately, is a whole different story.
With so many responsibilities to handle, it’s not easy for HR departments to run their fringe benefits programs effectively without putting other critical tasks – such as recruitment and payroll processing – on the back burner.
Fortunately, there is a more cost-efficient alternative than taking the do-it-yourself route. The solution is to outsource your benefits management to professional administrators.
Which Companies Should Outsource Their Employee Benefits?
Outsourcing benefits management can help companies of all sizes. It’s particularly useful for small businesses that lack the staff and deep pockets needed to manage a benefits program independently.
Without the trouble and risks that come with managing their employee perks, small businesses can focus their HR department’s energy towards recruiting top talent, meeting performance goals, and building a solid corporate culture that both their workers and clients will admire.
Why Are Companies Using Outsourced Management Services?
Outsourcing benefits management has many advantages – particularly for smaller businesses. Some of the reasons why businesses outsource their benefits include:
- They lack the expertise: Managing employee benefits isn’t as simple as crunching numbers and paying the bills. In fact, just keeping pace with the constantly evolving tax and labor regulations is enough to keep many administrators busy. While most benefits are voluntary, failure to comply with regulations can cost your company a hefty fine and any tax benefit you have enjoyed until then.
- It saves time and money: Insurance brokers have the know-how and business ties you need to get the best deals for your employees. Since brokers are knee-deep in the industry, they are in an excellent position to research and negotiate the most advantageous deals with both carriers and health providers.
- They want to streamline their processes. Small companies don’t have the manpower needed to sign-up and update their employee benefits during the open enrollment period. Benefits managers, on the other hand, can use web-based tools and customized videos to simplify your open enrollment period.
Though so far we have talked about the benefits of benefits management, we haven’t yet addressed the elephant in the room.
Most Employee Benefits Are Outsourced by Default
Although many companies specialize in managing benefits, the idea of outsourcing your benefits administration isn’t as new as it sounds. Indeed, the truth is that health insurance is rarely an internally owned and operated service. Take group health plans for example.
Companies providing employer-sponsored managed care plans often rely on carriers and third-party administrators to fund and manage them.
With these plans, employees get medical services from either an HMO or a PPO for a discounted price. But rather than paying for their care and then billing their plan’s carrier – as the old fee-for-service plans do – managed plans are paid in advance.
This means that any bills generated by a company’s employees are processed by the HMO or PPO, so the company’s HR department doesn’t have to deal with heaps of paperwork on their own.
The popularity of outsourcing isn’t limited to fully insured group health plans. Even companies providing self-insured benefits buy stop-loss insurance to protect themselves against unexpected costs. They also outsource much of their paperwork while they take care of paying the claims.
Hire Expert Employee Benefits Management Services Today
Congratulations if your HR Department made it this far on its own. However, just because your staff has somehow managed to struggle through doesn’t mean it’s the best way to go forward – not when the best benefits experts are just a phone call away.
At Zupnick & Associates, we have a solution to your HR’s benefits’ pains – one that takes the never-ending pencil-pushing work of managing your benefits off their hands.
Whether it’s streamlining your benefits education or handling the paperwork and billing, our staff has the skills and resources you need to design, implement, and manage your employee perks on your behalf.
So don’t go another day wasting your valuable HR resources. Instead, let us administer your employee benefits with complete transparency while you focus on meeting your business goals and improving your bottom line.