THE COMPREHENSIVE GUIDE TO EMPLOYEE BENEFITS MANAGEMENT

The Comprehensive Guide to Employee Benefits Management

What is Employee Benefits Management?

With so many benefits and combinations of benefits for employees available today, managing that additional compensation is critical. Employee benefits management ensures benefits are appropriately determined. Other roles are adding and removing benefits programs, educating employees on benefits and helping them enroll, and ensuring employee and benefit information is up to date.

List of Common Benefits

Workers’ Compensation (Legally Required)

Workers’ compensation is a non-negotiable benefit, primarily state-based. In nearly all cases it is compulsory for employees to offer, with many optional policies extending beyond the compulsory coverage. If employees are injured on the job, workers’ compensation covers the company’s obligations.

Health (Medical, Dental, Vision)

Medical benefits are one of the most common employee benefits. This covers all or some of the cost of medical care even if it is unrelated to work. It may include an employee’s dependents, and employees may pay a percentage of the monthly cost. Dental and vision work similarly, covering the cost of care and treatment for employees and sometimes dependents.

Commuter

Commuter employee benefits compensate for the cost and challenges of commuting to work. This can include passes for local transportation, employer-paid parking, reduced parking fees, or reimbursed fees, or providing transportation through the company. Fuel cards and discounts, reimbursement for bicycle repair and maintenance, and toll payment cards are less common but additional commuter benefit options.

401K & SIMPLE IRAs

A 401K plan collects employee contributions to a retirement account, and earnings are not taxed until that money is withdrawn. Employers may match contributions. SIMPLE IRAs, standing for Savings Incentive Match for Employees, are a similar concept for small businesses. Employers match contributions or make contributions at a flat fee.

FSA/HSAs

Flexible spending accounts and health savings accounts are tax-advantaged benefits helping employees pay for medical costs. HSAs are available to those with high deductible health plans, while FSAs are specifically part of an employee benefits plan. FSAs are connected to the employer while HSAs can move with the person using a high deductible health pan.

Other (Dependent, Life, Disability)

Insurance of various kinds can apply to an employee’s dependents. There is also the option for life insurance for employees through workplace benefits, and disability coverage even if the disability does not stem from the workplace.

Small Brokerage vs. Large Brokerage

What is a Small vs. Large Firm?

When purchasing employee benefits, a broker can help find the best deal based on a company’s needs. Brokers work for their clients, not for a specific company. Large and small insurance firms and brokerages both have advantages and disadvantages. Smaller firms generally employ the same number of people as a small business, with 100 people or less, while larger firms operate more like an enterprise and may have global reach.

Pros/Cons of Using a Small Firm

Often small employee benefits brokerages are boutique, focusing on a specific industry, specialty, or business size. Small firms are a natural fit for small and medium businesses, as they have the time and flexibility to work closely with HR and company leaders. Small firms also tend to have a closer relationship with their clients where the feeling of just being client number X isn’t as common. Small firms might not be the best fit for companies that are located in multiple states and need a brokerage team who has expertise in all their locations.

Pros/Cons of Using a Large Firm

Large brokerage firms have the extensive teams and networks that can get to work quickly for enterprises with complex benefits needs. While securing benefits for a big business could take up all of a small firm’s focus, it’s a regular day at work for bigger brokerages. These large firms have the experience and expertise to source and implement benefits plans that span multiple locations, large numbers of employees, and global complexities.

For smaller companies, a large firm may not be the best fit. Smaller companies tend to fall down the priority list when there are bigger, well-paying enterprise brokerage projects to complete. Smaller companies may not get the individualized attention they would prefer, working with a large team instead of a dedicated broker.

What to Use for Small/Medium/Large Businesses

Small businesses, startups, and early stage companies have different needs than larger or more established companies. If your company is dealing with seed round financing, SAFE notes, and other potentially costly startup circumstances, you need a broker well-versed in these areas. A smaller boutique brokerage focused on helping businesses like yours may be a better fit than a large, generalized brokerage

Alternatively, large companies may fare better with enterprise-style benefits brokerages that can leverage big buying power. Large brokerages will typically prioritize their large accounts, which is great for big businesses but not ideal for small and medium companies who equally need benefits.

Software for Employee Benefits Management

What to Expect from a Software Enabled Broker

Not all brokers are created equal and with the improvements of cloud based employee onboarding and payroll software a new group of brokers have entered the market with tools to make both their clietns and their own companies more efficient. Gusto, Zeneifts, Rippling, GoCo are platform for automating payroll, benefits, and HR, while offering support to companies in finding and implementing all of these crucial aspects of a business. When working with a software enabled broker not only will the health insurance plans being offered fit your needs but the tolls your insurance provider offers should help with employee onboarding, open enrollment, and day to day hr needs.

Gusto Pro/Cons

Pros: Easy to use interface and payroll system, various types of payroll, automation option, HR insights and templates.

Cons: US-only service, you are also required to work with Gusto as your broker (you can’t bring in your own broker on the platform).

ADP Pro/Cons

Pros: Automatic tax forms and payments, many software integrations, compliance features, mobile app, scalability.

Cons: Pricing can be confusing with additional fees, many HR features are an added cost.

GoCo Pro/Cons

Pros: Intuitive design, customization is easy, free version to test product, payroll integrations, PTO tracking. A great solution to include with ADP or Gusto so that you have a good benefits solution with a strong payroll platform.

Cons: It creates a second login for your team for benefits as it isn’t integrated directly with Gusto or ADP.

Rippling Pro/Cons

Pros: Robust automation and integration, regular upgrades and updates. Strong feature set outside of just payroll and benefits.

Cons: No phone number for customer support, pricey for smaller businesses.

Roadmap for Benefits Management

Timeline for Small, Medium, and Large Business

What Services

The employee benefits management services a company chooses ultimately comes down to which system is the right fit. Connecting with a system, brokerage, and benefits suited to the size of the business and the talent a company wants to attract and retain is key. One of the first steps should be to research options, then connect with a broker or consultant to explore what software, services, and benefits are ideal.

When Services are Available

Nearly every business, regardless of size, will benefit from implementing benefits management software as soon as possible. The faster benefits management is handled in an automated, integrated way instead of manually, the better. It means quicker error reduction, improved employee satisfaction, and greater value from benefits.

What to Avoid

Getting employee benefits management software in place as soon as possible is ideal, but companies should not rush through choosing the right software, broker, or timeline for implementing the new system. Employees need to be trained on the ways the platform will impact their benefits, and manual or legacy systems need to be carefully ported.

Concluding Thoughts —
What Can Management Do For My Company?

How does a Good Brokerage and Software
Add Immediate Value?

Employee benefits are a key recruiting and retention tool. Given the choice between top-notch benefits, easy enrolment, and expert support, and a company that offers nothing, talent will choose the benefits.

Employee benefits brokerage, and employee benefits management software ensure that your benefits are well-suited to your company. They make the most of your benefits budget, saving money and time which provides an immediate value to your business. And, the better your benefits are, the happier and more productive your employees will be. It’s win-win for everyone.

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