Where to Start with HR Tech: Benefits Management
Benefits management software is the last of the four HR technology tools a small business needs to be prepared for growth. Benefits management involves a lot of detail, including with sensitive information, and things get complicated very quickly, so you want a tool to help manage those details effectively. Fortunately, there are usually options to get this tool for free, or included the cost of something you’re already paying for, so there’s low to no marginal cost here. A good benefits management tool will enable employees to review and choose their benefits, communicate the relevant withholdings to payroll, and allow you as the employer to easily pull an employee’s complete benefits package or a report of everyone on a given benefit plan.
One caveat here: in hiring, a “benefits package” refers to all non-salary or non-cash benefits, including health benefits, retirement benefits, time off, etc etc. In HR, when we talk about “benefits management,” this doesn’t include time off and may not include retirement benefits, but does generally include health insurance (medical, dental, vision) along with the other insurance benefits (disability, hospital indemnity, things like that). I’ll talk more about time off management and retirement benefits in a later post.
All that being said, what are your options for managing benefits?
Manage them on paper. Your insurance provider will have a paper enrollment form, you have your employees complete it, and then you return it to the insurance company. This gets messy over time, as people experience life changes or your benefits plans renew and change. I don’t recommend doing this for very long, or at all if you can avoid it.
Use your HRIS. A lot of HRIS tools will offer benefits management functionality. Sometimes, they may require you to go with their preferred broker or insurance company (in which case, I’d recommend you get a quote from them, along with a few outside quotes, and decide based on cost and plan availability). If you have a PEO relationship, their HRIS tool will almost certainly have benefits management functionality, and your account manager will probably tell you they’re able to offer lower rates on benefits - that’s one of the perks most PEOs claim to offer.
Alternatively, if your HRIS doesn’t offer this, or if you’re not in a PEO, the next best option (and it’s a good option!) is to find a broker that offers a benefits management tool. A benefits broker operates on more or less the same model as an insurance broker that you would work with for home or auto insurance - you get the benefits, they get paid by the insurance company. Many modern brokers will use a benefits management tool to manage their clients, and they’ll be able to give you (and your employees) access to self-serve. If your broker doesn’t have this, it might be worth talking to a different broker - access to this tool really does streamline administration that much.
Between an HRIS and a broker, you’re very likely to have an option (and maybe a couple of options) to manage your benefits. It’s worth leveraging that database on setup rather than trying to keep everything on paper and in folders - it can be quite a mess to clean up after the fact!