Employee Benefits for a small business can increase an employee's base salary by upwards of 40%. It is not a surprise to anyone that employee benefits are expensive, and often they're necessary to retain talent within your organization. However, we often fail to budget for the costly fines and fees that are incurred when all too common mistakes inevitably occur.
Navigating these waters doesn't have to be a giant guessing game, nor do you have to hire a consulting firm that will charge more than you can afford. We've outlined five common errors below. They are common knowledge, and they're something your insurance agent should be able to discuss with you.
1. Taking on the full cost of employee benefits
Think about a free candy jar at the desk of your co-worker. If the candy is free everyone will take it, even if they're not 100% sure they even want candy. Why? Well, because its free. If the candy cost something—frankly, anything—people will at least think twice about whether or not they want or need the candy. The point being; if benefits are free, everyone will take them. If there is a cost associated with them, it may not discourage an employee from enrolling, but it may make them compare the cost or seek an alternative quote for themselves or their dependents. You save two ways, first by subsidizing some of the cost to the employee, and second by eliminating the "I'll take it only 'cause its free" employees.
2. Providing unwanted benefits
If your employees are mainly young, why would you offer a plan that is rich in life insurance or disability insurance? Your millennial employees as well as workers in their 30's are more concerned with co-pays and out of pocket minimums. That's not to say the other coverages aren't important, but sometimes it's best to survey your employees to see what matters most. There is no need to pay for unwanted coverages.
3. Covering non or unqualified employees
This may not apply to the majority, but some employees buy group health plans to cover relatives or friends. This can result in an investigation, cancellation, or worse, a claim denial. The hours an employee has worked that show up on your WR-30 is the best way to quickly determine who is eligible.
4. Improper filing of paperwork
Wearing eight different hats is part of being a small business. It's hard to know the minute details of each of the eight jobs if it's not your full-time concern. Unfortunately, when it comes to group health, there's only a small window to enroll employees into plans. If that window is missed, it can lead to costly litigation that is unlikely to end favorably.
5. Not providing enough details to employees about their benefits
The power of this knowledge should not be overlooked. Most employees overlook the fact that their benefits are provided through their company and simply expect this to be the norm. This notion has been changing of late. You've probably heard your friends and family discuss how their benefits have changed for the worse. A simple yearly statement describing the employee's individual benefits and what costs are associated with those benefits would be welcomed by the employee.
Have any more questions that we can help address on this topic? Or simply need a quote? Give us a call at 732-380-0900 or request a quote to get started.
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