Recently, myHR Partner was contacted by a small business with a stellar product, earnest leadership, and as airtight a business plan as you’ll see.
Despite all this, morale among its two dozen employees was at an all-time low. The culprit? Health benefits – and not benefits quality, but benefits administration.
With no enrollment procedures in place, there was ongoing confusion about benefits options, pricing, and related deadlines. The CFO and COO had neither the time nor expertise to sort it all out. Then, the tipping point: An employee was never told about open enrollment, missed the deadline, and had no health coverage. It ignited fury among staff that was spreading.
The business’s owner reached out to myHR Partner.
We got to work.
TO OUTSOURCE OR NOT TO OUTSOURCE: THE SMALL BUSINESS BENEFITS QUESTION
If you’re a small business, all of this might sound familiar. After all, very few small businesses have the resources for an in-house benefits administrator and are therefore left weighing: Do we outsource benefits administration…or do we wing it on our own?
We completely understand that small businesses need to carefully consider prospective line items.
We’re nonetheless emphatic in our belief that small businesses are wise to outsource benefits administration to a trusted, reputable third-party expert as opposed to piecemealing it in-house or adding it to the responsibilities of someone in leadership or accounting.
Here's why:
Benefit 1: No more confusion
Who-does-what? can get hazy in small businesses trying to handle benefits administration on their own. It’s often wrongly assumed that a broker (or another third-party administrator) will take responsibility for all related tasks. Many small businesses end up learning the hard way that they’re actually the ones responsible for aspects of new hire enrollment, open enrollment communication, COBRA, and distribution of required notices.
This was the case with another client that myHR Partner began working with recently. Before enlisting myHR Partner, this small business assumed that because they had a COBRA administrator, that administrator was entering employment terminations into the COBRA portal. The assumption was incorrect and led to COBRA complications and delays.
When you work with myHR Partner, we not only make roles abundantly clear; we’re also flexible. Occasionally, our small business clients want to keep some tasks in-house or continue involving their broker. We ensure demarcation is to everyone’s liking, is efficient, is understood, and makes sense.
Benefit 2: Time saved
Any way you look at it, benefits administration is big: Labor-intensive, cumbersome, and complicated. Exhibit A – this standard small business benefits administration to-do list:
- Day-to-day benefits administration such as enrollments, terminations, changes due to qualifying life events, and COBRA
- 401(k) administration, including eligibility and enrollment tracking and distribution oversight
- Open enrollment process management including employee communications, enrollment tracking, and carrier update tracking
- Required reporting, filing, notices, distributions, and other compliance-related regulatory needs
- Conducting new hire benefits overview and orientation sessions
When small businesses outsource benefits administration ie. hand all these responsibilities to someone else, they free up an inordinate amount of time – time leadership can devote elsewhere.
Benefit 3: Fines averted
When small businesses cobble together benefits administration in-house, it often leads to oversights and mistakes with the potential for serious consequences.
Take 401(k)s. Very few small businesses handling benefits administration on their own have solid processes for alerting new hires of 401(k) eligibility. Worse yet, many have a flawed understanding of eligibility overall. Part-time employees, for example, are often falsely assumed ineligible. The scariest part: If your small business is audited by the Department of Labor or Employment Retirement Income Security Act (ERISA), such oversight can lead to compliance-related fines. Medicare notices and filings, Section 125 plans, summary annual reports (SAR), and other ERISA documents and notices are similarly overwhelming to small businesses and also run the risk of audits and fees. Ensure you have the knowledge you need to avert fines with an outsourced partner.
Benefit 4: Objectively better employee benefits
In today’s competitive hiring landscape, it’s important to offer employees the best health benefits options your budget allows. Hand benefits administration to myHR Partner, and we’ll help you make sure of it.
Annually with carrier renewal and throughout the year, we work with your benefits broker to ensure you know exactly what options are available to you, and when plans can – or should – be expanded or changed. We keep on top of trends: those popular among our other clients, in the larger market, and in your sector specifically. Our experience with a plethora of carriers also informs our insights.
THE OUTSOURCED EXPERT SOLUTION
So, what happened to the small business that reached out to myHR Partner for benefits administration help?
Within two months, myHR Partner’s dedicated team developed a process outlining timelines, deadlines, options, costs, action items, and all related communication for health benefits as well as 401(k)s. Employees now know when they’ll become eligible for benefits and how and when they can make mid-year and annual changes to coverage. New procedures ensure ID cards and other necessary communication are all handled in advance of the need.
Within this small business, anger was defused. Confidence restored. The wronged employee now has health coverage. Today, high morale and high productivity once again characterize this standout small business.
Ready to stop rolling the dice and start giving your small business the polished benefits administration it deserves?
Consider myHR Partner. We kick off by digging deep, talking not only to your small business’s leadership but also (when applicable) your broker and any other third-party advisors. We learn your existing processes for new hires, open enrollment, terminations, compliance, and more. Any gaps we find inform a proposed strategy and plan, which we design according to your exact business culture and goals.
With myHR Partner, it doesn’t take long to experience the perks of outsourced benefits administration for your small business. Contact us for a free consultation.
