Managing your employee benefits can be a huge and complicated task, and one that can be especially problematic if mistakes happen. Federal assistance and guidelines are available through the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor. While benefits administrators can get guidance and information from this government entity, they also provide a channel for employees to get information and report any problems or inequities with their company benefits.
Effective benefits administration is crucial to keeping your company compliant and your employees happy. Here are five important steps to help you with effective benefits administration.
Choose the Benefits You Will Offer
In today’s marketplace, employees place a significant value on benefits beyond the basic salary. Greater importance is attached to benefits that allow for more family time and provisions. This can include:
- Dental and Vision Insurance
- Retirement Savings / Pension Plans
- Student Loan Assistance / Scholarships
- Financial Wellness Planning
- Critical / Long-term Illness Insurance
- Pet Insurance
A strong and flexible benefits package is a critical tool for recruiting and retaining quality talent in your employee pool. Long-term employees routinely cost less to retain because of their maturity and experience, and the key to keeping employees longer is to provide attractive and valuable benefit packages.
Other common benefits that cost little but are highly valued by employees include bonuses, wellness programs, flexible work hours, and options for working from home. A benefits specialist from Payroll Managers can help you determine the best combination of benefits to offer your employees, customized to your business size, needs, and budget.
Manage the Costs of Benefits
Of course, choosing benefits for your employees depends largely on your budget. Benefits must be cost-effective while being an attractive motivation for your employees. The Bureau of Labor Statistics released a report in December 2021 detailing the average costs of employee compensation. The average cost of employee benefits is $11.82 an hour, while wages and salaries cost employers $25.91.
There are numerous ways to manage the costs of benefits to keep them affordable. The Society for Human Resource Management (SHRM) recommends negotiating bundled medical, dental, and vision plan payments to save on costs for your company and employees; offering a variety of benefit options, including voluntary benefits; adopting nursing advice 24-hour phone lines and telemedicine options; and case management services to manage care.
Administer Employee Benefits with Precision
Manually handling all the tasks of employee benefits administration is a nightmare. Fortunately, many options exist for automating tasks that can increase efficiency, secure personal data, provide better information to employees about their benefits, and help ensure compliance with applicable regulations. This can save your benefits management team hours of time, cut costs, remove reams of paper use, and streamline the entire department.
You should strive for complete transparency about your company’s benefit offerings and how these benefits are administered. Employees should receive complete information about what is available to them, and when, the benefits they have chosen, and the details involved with each benefit. Payroll Managers can work with your existing HR team to improve employee benefits administration and suggest software and other tools that can help. We can also provide complete PEO services providing professional help with handling vital HR, payroll, and benefits administration chores.
Ensure Compliance with Federal Regulations
Administering employee benefits requires a deep dive into understanding all the regulations for compliance with federal mandates, including:
- COBRA – Companies with over 20 employees must offer COBRA benefits.
- FMLA – Companies with over 50 employees must offer FMLA benefits that allow eligible employees to take unpaid, job-protected leave for specified family and medical reasons.
- HIPPA – This federal law provides extra enrollment opportunities for group health plans in the event an employee loses health coverage, gets married, or adds a new dependent. There are also protections against discrimination over health factors or when changing enrollment.
- ACA – Affordable Care Act provisions include determining eligibility for coverage and ensuring employees are provided with options for health insurance coverage.
All companies with over 50 full-time employees are required by law to offer a group health insurance plan or risk a steep tax penalty. You must offer coverage to at least 95% of your employees and their dependents.
Match Benefits to the Needs of Your Employees
Just as your workforce changes over time, your benefits package should also. The demographics of your employees can change, requiring new benefit offerings to maintain attraction. For example, an older workforce may not place value on student loan repayment or paid leave for new parents. They typically want a healthy retirement plan, opportunities for improved wellness, and long-term care or disability insurance.
Research what your employees want and offer a benefits package that resonates with the majority of your employees’ needs and the current state of their lives. Look at your current benefits package and evaluate which benefits are used most, used least, their effectiveness, costs, coverages, and the current trends in what is currently offered elsewhere. These factors can all help you tailor a benefits package that is very attractive for getting and keeping the best employees.
Payroll Managers has benefits specialists who can help you with a review of your current offerings, budget, and administrative chores, with a view to improving your benefit offerings while saving you money. Contact us today to schedule an employee benefits review with one of our specialists.