Growing a company is a challenging task for employers. Finding and keeping valuable employees is a daunting task when competing with other well-established companies. Because of this, benefits education has become a crucial part of employee retention and satisfaction.

Many federal and state laws come with fines and penalties that place an added level of stress on HR teams in growing businesses. This is because growing companies face challenges like rising costs and budgeting challenges, difficulty navigating the complexities of legal requirements, ensuring flexibility of options for employees and tailoring benefits to diverse needs, and other technological difficulties. These make managing benefits an ever-present challenge.

When it comes down to it, it’s important for growing companies to focus on a singular goal—growth—and choose to outsource as a cost-effective solution for benefits administration.

What Is Outsourced Benefits Administration?

Outsourcing benefits administration is the process where a company partners with a third-party benefits administration provider to manage their employee benefits program. Instead of saddling the job and responsibilities of benefits management to internal teams (HR teams), companies allocate these tasks to an experienced benefits administration firm.

This allows businesses to streamline operations, reduce the burdens on HR teams, and ensure that they are compliant with the complex regulations.

Here are the areas outsourced benefits administration helps:

1. Enrollment Management: Outsourcing handles the entire benefits enrollment process, from onboarding and open enrollment to qualifying life events. This ensures a smooth and efficient process.
2. Regulatory Compliance: Outsourcing companies are usually up to date with compliance laws. These third parties apply the relevant laws, helping companies avoid penalties and any legal issues.
3. Employee Support: Outsourcing companies have a wealth of experience providing dedicated support teams or self-service portals where employees can ask benefits-related questions, understand their options, and resolve issues. This helps them apply the most effective solution for a growing company’s needs.
4. Reporting and Data Management: Benefits administration companies help maintain accurate benefits records, generate reports, and ensure that payroll and benefits systems stay aligned.

Outsourcing benefits administration helps growing businesses focus on their core operations while ensuring their employees receive high-quality benefits management and support.

Advantages of Outsourcing Benefits Administration

As a growing business, it is important for employees to consider the advantages of outsourcing benefits administration to a third-party benefits company to ensure proper management. These are:

• Cost Savings: Outsourcing benefits administration reduces administrative expenses and HR workload, helping HR teams focus on other core tasks.
• Compliance Expertise: Outsourcing benefits administration helps businesses keep abreast and updated with changing regulations. This helps avoid fines and penalties.
• Improved Employee Experience: When benefits administration is handled by professionals, employees feel supported and motivated to perform at their best.
• Scalability: Outsourcing benefits administration helps companies create a plan that adapts to their business growth without additional HR strain.

When Should a Business Consider Outsourcing?

Because of financial constraints or lack of support, growing businesses make the mistake of handling every part of their business, which leads to considerable strain on employees and errors. At some point, it is important for businesses to consider outsourcing benefits administration to ensure efficiency and reduce employee discomfort. These are:

• Rapid Company Growth Leading to Complex Benefits Needs: When a company is in its growth phase—whether size, functions, or employee needs—it is important to consider outsourcing. This is because business activities associated with employee benefits like hiring, enrollment, onboarding, and changes are happening concurrently, which can overwhelm in-house teams.
• Compliance Concerns and Risk Management Issues: Compliance concerns are one of the biggest reasons to consider outsourcing. There are many state and federal laws associated with employee benefits and programs that a company’s in-house team may not be privy to. The ever-changing, continuous industry updates can also make the process of benefits management tiring for in-house teams.
• HR Teams Overwhelmed with Administrative Tasks: For most businesses, employee benefits and administration are sectioned off as part of the responsibilities of the human resource department. This is added to the existing workload and administrative tasks these teams handle daily. This can lead to HR teams becoming overwhelmed and susceptible to errors. It is important to consider outsourcing before it gets to this point.

How to Choose the Right Benefits Administration Provider

1. Look for Experience in Your Industry
   Choosing a provider with experience in your specific industry means they will understand the common challenges, compliance requirements, and best practices for your business and tailor their results to your business needs. Familiarity also ensures that providers can offer flexible, scalable solutions that grow with your business.
2. Evaluate Technology and Customer Support Services
   Technology is unquestionable with modern benefits administration. This is because it relies on technology to streamline enrollment, track benefits, and automate compliance. Choose user-friendly digital platforms with self-service portals, mobile accessibility, and integration capabilities with payroll and HR systems. Selecting a benefits administrator with strong customer support—such as 24/7 availability, dedicated account managers, and multilingual support—is a must-have. This ensures employees receive timely and effective help with benefits-related questions.
3. Assess Data Security and Compliance Capabilities
   Employee benefits rely heavily on employees’ sensitive information. This has made it extremely important for businesses to employ extensive security measures to ensure that this information is safe. Employ a benefits administration provider that understands these risks and has strong security in place for these concerns. Compliance is also an important factor to consider when choosing the right provider. Ensure the provider follows federal and state regulations, including HIPAA and ACA compliance, to protect employee information and avoid legal risks. Inquire about their process for keeping up with the frequent regulatory changes and how they work to ensure compliance on behalf of your company.

By carefully evaluating these factors, businesses can choose a benefits administration provider that enhances efficiency, improves employee experience, and mitigates risks associated with compliance and data security.

Conclusion

Outsourcing benefits administration is a strategic way for businesses to reduce administrative burdens, ensure compliance, and enhance the employee experience. By partnering with an experienced provider, companies can stay up to date, perform optimally, and provide employees with better support.

For growing companies struggling with time-consuming benefits management or frequent regulatory changes, choose Enroll UR Benefits for a cost-effective and scalable solution that optimizes your benefits strategy and creates an employee-friendly workplace.