Benefits Administration: A Guide for HR Leaders

Why Employee Benefits Matter

Believe it or not, your benefits package can have a serious impact on your ability to recruit, engage and retain talent. Hard to believe? It shouldn’t be. SHRM reports more than 50% of U.S. job candidates say benefits are among their top considerations before accepting a job. That’s why selecting the right benefits package is one of the most important things you’ll do for your employees over the life of your business. Choose the right benefits and your employees might never want to leave. Offer the wrong ones… you might as well install a revolving door.

Businesses that get benefits right reap big rewards.

Whether you’re aiming to boost your employees’ overall performance or you’re looking to improve satisfaction and retention, benefits can be a powerful tool. In fact, research shows that businesses with a strategic benefits program have higher overall performance and retention rates than those that don’t.

Long story short: Choose your benefits wisely.

Unfortunately, selecting the right benefits mix is not a “cut and paste” proposition, as there is no one-size-fits-all solution. Your workforce is diverse, it may very well be multigenerational, and so your employees will need and want different options.

Is your benefits program the best it could be? Take our quiz.

The 4 Key Benefits Your Company Should Offer

(and some others to consider)

So, we’ve established that benefits matter, but which benefits should you offer? At the foundation, employees want benefits that cover their healthcare expenses and future retirement funds. This includes:

1. Health InsuranceHealth insurance is your bread and butter. In fact, it’s the single benefit that, taken by itself, might attract or scare off potential hires. Although required by law for employers with more than 50 full-time equivalent employees, each company might elect to include or exclude certain coverages.

   Looking to add or switch providers? You typically have four options: HMO, PPO, POS and HAS.

   Read more about these options here.

2. Dental InsuranceDental insurance is a favorite among employees. But like toothpaste, dental plans come in several flavors.

   Fully Funded Employer Plans:

   The business covers 100% of employees’ costs.

   Partially Funded Employer Plans:

   The business shares the costs with its employees. Most of the time in the ballpark of an 80/20 employer/employee split.

   Fully Funded Employee Plans:

   Employees pay the entire cost of their dental insurance while the business pays the payroll deductions and administrative costs.

3. Flexible Spending Accounts (FSAs)FSAs allow employees to save pre-tax income to cover basic medical expenses.

   Here’s why employees love this option:

   • FSAs can be used for copayments, coinsurance, deductibles, prescription medications, dental and vision care
   • FSAs fund or enable employees to carry over $500 each year
4. 401(k)Working Americans are struggling to save 10-20% of their paychecks. In fact, 1/5 of Americans don’t save any of their annual income at all, according to CNBC.

   If your company can offer a benefit like a 401(k), with an employer match, it can be a valuable tool for recruiting and retaining talent.

   Learn more about 401(k) options here.

Keep in mind that most of your competitors also have these benefits. So how can you stand out from the crowd? You need to design your benefits plan to be inclusive of a diverse workforce (we’ll get to that next) by offering traditional and non-traditional benefits. Non-traditional benefits that most employees appreciate include perks such as working remotely, paid time off to volunteer, allowing pets in the office, paid gym memberships, or free snacks and drinks.

Design the perfect open enrollment in 4 clicks: take our interactive assessment.

Designing Benefits For A Diverse Workforce

Your employees don’t all fit in the same box. With five generations composing today’s workforce, your employees have different expectations for what benefits they’ll be offered. When you have to manage these expectations, a cookie-cutter benefits program simply won’t cut it.

The Wants And Needs Of Each Generation:

The Silent Generation (1928-1945)

The Silent Generation makes up only 2% of the active workforce.

This group mostly cares about financial benefits and recognition programs, such as:

• Retirement planning services
• Pension plans
• Achievement awards
• Length of service or tenure awards

Baby Boomers (1946-1964)

Not only do Baby Boomers make up 25% of the workforce, but they also typically sit in high-level positions. Keeping this generation satisfied means you’re retaining your most loyal and experienced talent.

This generation cares about:

• Life insurance
• Retirement planning services
• Supplemental insurance
• On-site cafeteria

Gen X (1965-1980)

Gen X-ers make up 32% of the workforce. As an experienced group, this generation is focused on career advancements.

Benefits they care about include:

• Professional development programs
• Flexible schedules
• Remote workplace
• 401(k) with employer contribution
• Paid paternity leave
• On-site cafeteria
• On-site child care

Millennials & Gen Z or Post-Millennials (1981-1996 & 1997-present)

Together, Millennials and Gen Z make up more than 40% of the workforce (Millennials 35%, Gen Z 6%). To this generation, financial benefits are a big plus, but they also care about work-life balance and other non-traditional benefits.

This generation cares about:

• Leadership development programs
• Financial consulting
• PTO
• Paid paternity leave
• 401(k) with employer contribution
• Remote workplace
• Flexible schedules
• Casual dress code
• On-site gym
• On-site child care

Interested in crafting an employee benefits plan for a multi-generational workforce? Check out this article.

How To Design A Wellness Program

Wells Tower Watson reports that companies with higher levels of wellbeing achieve a 2x level of employee engagement.

As benefits become more aligned to company culture, we’re seeing organizations look for ways to holistically engage their employees with programs geared toward physical, mental and social health.

Launch a wellness program with these three steps:

1. Listen
   • Survey your employees. Give them a variety of ways to offer ideas on what matters most to them such as polls, suggestion boxes, online surveys or in-person small group meetings.
   • Look for trends in the way employees use their healthcare benefits, both medical and pharmaceutical. (You or your benefits broker can request aggregate data from the insurance carrier.)
   • Consider sponsoring a workplace health assessment to gain specific insights on where your employees need the most help. Is it smoking cessation? Weight loss? Improved diet and exercise?
   • If you use one, work with your broker to benchmark your company against competitors; understand what’s parity so you can see what you need to do to stand out from the crowd.
2. Make A Case
   • To get management support, you’ll need to connect wellness to the bottom line. How much are sick days costing the company? How much money could you save from a decrease in health insurance claims?
   • Don’t take employee buy-in for granted. Make the case to your team. Involve them in the decision-making, form a wellness committee, and roll out the program with some fanfare. Remember that company execs should walk the walk and talk the talk!
3. Measure SuccessBegin with the end goal in mind. Define what success looks like and measure your results:
   • Benchmark participation rates of the workforce.
   • Compare the before/after results of biometric screening.
   • Track the effectiveness of a smoking cessation program.
   • Conduct a pre/post survey to monitor employee perceptions.
   • Analyze health plan utilization rates over a multiyear period.

4. Learn how to reduce turnover with employee benefits: Read Guide

   

   How To Select A Benefits Broker

   You’ll find seemingly endless options when you’re exploring employee benefits. But one of the biggest choices to make is deciding if you want to use a benefits broker. If the answer is “YES!” the second biggest decision you’ll need to make is which broker you’ll partner with for benefits administration. Your leadership team has high expectations, but no one expects you to be an expert on how to navigate the complex and often-confusing world of benefits. That’s why finding the right broker match is important for your organization.

   As you begin researching and interviewing potential brokers, be sure to ask:

   

   7 Things to Look for in an Online Benefits Administration Solution

   Simply put, finding the right HR benefits technology will significantly improve your work life. But deciding which benefit admin provider you want to partner with can quickly become overwhelming. From ACA and rising health care costs to open enrollment and plan selection, employers are faced with a lot of decisions.

   Here are 7 things to look for in a benefits software platform:

   1. Streamlined Open Enrollment
      Open enrollment is a major challenge for HR professionals and employees. It’s often time-consuming, inefficient and confusing for employees, leading them to make poor and costly benefit selections. It happens every year, but there’s a way to reduce your headaches if you’re still using manual open enrollment. Go paperless. The best benefit software platform will automate open enrollment, giving you back time to focus on HR strategy and workforce planning. Instead of employees asking you the same old questions about what’s available and how much it will cost, they can check out their options and learn about plan specifics online.
   2. Everything in the Same Place
      When you’re comparing apples to oranges during your search for the perfect benefits solution, it’s important to ask each provider where the employee data is stored. If the answer is, “It’s stored in a couple different databases,” show them the door. Entering the same data into multiple databases can be dangerously error-prone, not to mention terribly time-consuming. The best solution should offer a single database that houses all of your open enrollment and benefits data and documentation. Having mobile device capability is also an important feature. The more information your employees have at their fingertips, the fewer questions you’ll have to spend your precious time answering.
   3. Trust the Numbers
      Having a benefits system is important but it’s not enough. To maximize the value of your offerings, you’ll need a provider that can track data on plan choices, the number of workers who have enrolled and more. When you know which benefit packages your employees truly want, you’ll ensure you’re getting the biggest bang for your buck by avoiding costly, underutilized offerings.
   4. Communication Is Key
      Ask your employees one simple question: “What’s missing from your current benefits program?” You might find that poor employee education and lack of communication are a recurring theme. With so many options to choose from, employees can easily become overwhelmed and just keep the same plan year after year simply because that’s the easiest option. A consistent year-round communications program to help employees understand the benefit choices they have and the value they get will go far. If your provider offers communications consultation or even manages communications for your company, even better!
   5. Decision Support Tools
      Find a benefits administration solution that offers interactive decision support functionality to help employees make knowledgeable and personalized choices. The tool should have the capability to ask questions about impending medical procedures or important life events, such as a new baby on the way. Depending on the answers, the support tool will recommend a plan customized to the employee’s situation. Decision support tools help everyone: Employees get the education they need, and HR is relieved of the seemingly endless barrage of employee questions.
   6. Connect to Carriers
      You shouldn’t have to manually enter benefits elections and employee updates. A solution that offers carrier connect services can directly send and receive data between your benefits platform and your insurance provider, which significantly eliminates repetitive manual work.
   7. Lock Up that Gold Mine
      Hackers love getting their hands on employee data. Think about all of the information you have in your systems: Full names, addresses, bank account and Social Security numbers. All of this is data a hacker can easily use for identity theft. You need to ensure the provider you select uses multi-factor authentication, Google Authenticator and encryption when data is in transit and at idle. They should also have a dedicated risk assessment team focused on cybersecurity.

   Choosing a benefits administration provider isn’t a simple task but knowing what to look for can improve your chance of finding the right solution for your business.  See how Paycor’s Benefits Advisor transforms open enrollment and simplifies the complexity of benefits.