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A small business can be defined as an independent entity with less than 500 employees<\/strong>, and it\u2019s estimated that there are over 32 million such businesses in the United States alone in 2021 (as per Oberlo’s<\/a> report).<\/p>\n If you\u2019re one of these small business owners, you know how difficult it can be to run your company on a day-to-day basis, especially when handling both your company\u2019s finances and employee benefits. <\/p>\n But keeping your company\u2019s benefits costs in line doesn\u2019t have to be complicated or overwhelming! <\/p>\n The following are some quick tips to help you manage your small business\u2019s benefits cost, effectively and efficiently<\/strong>.<\/p>\n The overall process of determining which benefits to offer employees, managing costs associated with those benefits, and distributing that information to employees is what’s meant by <\/strong>benefits administration<\/a>. <\/p>\n These processes are sometimes overseen by a dedicated employee or an outside firm. The former is referred to as a ‘family’ plan, while an outside firm is called a third-party administrator (TPA). <\/p>\n In either case, it’s important to know exactly what you’re getting for your money. If you don’t, then expect your benefit costs to spiral out of control faster than Linda Blair in The Exorcist. And if you’d rather not be responsible for overseeing these processes, then consider hiring someone who can do it on your behalf – be it internal or external<\/strong>. <\/em><\/p>\n Common types of benefits offered by employers include basic medical,<\/strong> dental, vision, life insurance, health savings accounts (HSA), disability insurance, and flexible spending accounts (FSA)<\/strong><\/em>.<\/p>\n Recommended reading<\/strong>: 10 Employment Benefits to Ensure a Happy Workplace<\/a><\/p>\n Some organizations offer additional items such as a company-sponsored retirement plan. These are generally handled by third parties to avoid becoming overburdened with administrative work. <\/p>\n For example, HSA plans are arranged through banks or credit unions<\/strong>. The employer chooses an administrator that offers services tailored to small businesses. Employers may receive special incentives from these institutions which can make their costs even lower than what is normally available to individuals.\u00a0<\/p>\n There is not much difference between designing a plan for an individual employee and one for multiple employees. There will be some complexities in administering group benefits options but it shouldn\u2019t be difficult once you know how it works. Most employees prefer their benefits to be easy to understand<\/strong> so make sure you explain all options clearly in your policy manual along with any pertinent rules related to enrollment or usage.<\/p>\n Small businesses that don\u2019t offer their employees benefits are missing out on significant advantages<\/strong>. Benefits allow employers to attract top talent, which increases productivity and leads to greater organizational success<\/strong>.<\/p>\n Employers who offer health insurance, for example, can reduce turnover<\/strong>, since employee-friendly benefit plans are an important reason employees stay with a company for an extended period. <\/p>\n Businesses also save money in several ways when they provide their workers with benefits; however, some employers still shy away from offering worker perks because they believe they aren\u2019t financially capable of doing so.<\/p>\n This is especially true if your organization is just starting or doesn\u2019t have many resources at its disposal. But, most companies can afford to fund at least one employee benefit plan\u2014health insurance<\/strong>\u2014even if they\u2019re operating on a shoestring budget.<\/p>\n Employers are required to provide a variety of employee benefits, which may include health insurance, life insurance, disability insurance, long-term care insurance, retirement savings plans such as 401(k) plans, vacation time, and sick leave<\/strong>.<\/p>\n Recommended reading:<\/strong> 10 Employment Benefits to Ensure a Happy Workplace<\/a><\/p>\n Employers must make timely payments on these obligations. An employer is considered liable for any payment if it is determined that they knew or should have known about an underpayment or nonpayment. This means employers who rely upon their payroll provider to manage these costs cannot pass responsibility onto them<\/strong>. <\/p>\n If you\u2019re looking to reduce your exposure through outsourcing, consider whether your payroll service provider can handle all aspects of benefits administration before signing on<\/strong>.<\/p>\n Be aware that small business owners are responsible<\/strong> for administering employee benefits\u2014you can\u2019t outsource responsibility.<\/p>\n In addition to ensuring your plan is compliant with federal and state laws, you also need to understand all aspects of your benefits offerings, from eligibility requirements to open enrollment. You may be responsible even if your plan isn\u2019t self-funded. <\/p>\n If you do use a third-party administrator (TPA), make sure they\u2019re familiar with ACA legislation<\/strong>.\u00a0<\/p>\n ACA requires that employers offer health insurance coverage to full-time employees. However, if you\u2019re not considered an applicable large employer (ALE), you don\u2019t have to meet ACA requirements. Regardless, it’s still essential to be knowledgeable about all laws in your state, which can include any restrictions or additional legislation on health care coverage. <\/p>\n UZIO is an all-in-one solution<\/strong> that combines benefits management with payroll<\/a> & HRIS<\/a> to ensure you have one platform to manage everything. <\/p>\nWhat do you mean by benefits administration?<\/h2>\n
What are the different types of benefits?<\/h2>\n
Why should small business owners care about Employee Benefit Plans?<\/h2>\n
Employer responsibility and cost management<\/h2>\n
Stay compliant with federal and state laws<\/h2>\n