Health Benefits Outsourcing: Save Time and Money

It’s no secret that healthcare costs have risen substantially over the past decade, leaving many people unable to afford healthcare when medical needs arise. Employers actually foot many of the costs associated with healthcare and small- and medium-sized businesses are finding it increasingly difficult to provide decent benefits for employees.

As a result, numerous businesses have turned to outsourcing employee benefits to control costs. Many HR outsourcing services offer benefits administration outsourcing, but it’s important to understand that only one type of outsourcing service offers health benefits outsourcing.

What is health benefits outsourcing? 

Health benefits outsourcing is the practice of allowing an HR platform or partner to find excellent health benefits at the best price. Your HR partner will gain a thorough understanding of your employee benefits needs, and your company benefits budget, and they will work to find plans that give you and your employees the most bang for their buck.

Some small business owners find it difficult to leave the health benefits search up to someone else, but health benefits outsourcing ensures that experts in the field are the ones finding the right plans for you.  

Advantages of health benefits outsourcing 

There are several benefits to employee benefits outsourcing, such as time savings, reduced costs, and better legal compliance.

Experienced HR partners have already helped dozens of companies like yours find the best benefits deals possible, so they will know which prices are reasonable for the type of plan you want.

Additionally, most HR partners have access to far better plan options than small businesses, because they provide benefits for numerous clients and large volumes of people. This gives them more buying power, which often results in better plans at lower costs for your employees.

Outsourcing employee benefits can also help your company ensure that you are legally compliant regarding health benefits and offerings. Laws change all the time, but quality HR partners will stay up-to-date on new regulations, and they can help you stay on top of legal requirements. For example, companies that employ at least 50 employees, or Full-Time Equivalents (FTEs) must adhere to the regulations outlined in the Affordable Care Act (ACA).

If you try to sift through all of the employee benefits options on your own, you may accidentally select a plan that isn’t compliant with the ACA, or you might miss open enrollment periods that can result in no benefits for your employees. Relying on an HR partner instead takes the burden off of your shoulders and allows you to focus on what you do best: providing the best products or services for your own customers.  

What is the difference between outsourcing health benefits and outsourcing benefits administration? 

Although there is some overlap between outsourcing health benefits and benefits administration, they should be thought of as complementary services instead of one and the same. Outsourcing health benefits allows companies like yours to get better health plans for employees, while benefits administration focuses more on the actual administrative tasks involved in deploying health insurance.

Some examples of tasks that fall under benefits administration include:

• Coordinating employee benefits enrollment and terminations 

• Providing advice to employees about benefit options 

• Maintaining employee records regarding benefits files 

• Ensuring payroll deductions and employer contributions are accurately processed

• Adhering to Affordable Care Act reporting requirements

When it comes down to it, the main difference between these two services that affect your company’s bottom line is that benefits administration saves your company and employees time, while benefits outsourcing can save you both time and money. Many small businesses find that investing in both health benefits outsourcing and benefits administration is the best solution for them.  

Which outsourced HR solution offers benefits outsourcing? 

There are numerous types of HR outsourcing services that offer benefits administration, but the only type of HR outsourcing partner that offers benefits outsourcing is Professional Employer Organizations (PEOs). PEOs are the gold standard in HR outsourcing, as they are the most comprehensive outsourcing solutions on the market.

Besides enhancing convenience by offering multiple solutions in one service, PEOs offer an average Return On Investment (ROI) of 27.2% according to the National Association of Professional Employer Organizations.  

Should your company outsource health benefits? 

If you run a company with thousands of employees, you likely have enough buying power in the health insurance market. If, on the other hand, you run a small- or medium-sized company, outsourcing employee benefits can make a significant difference in your costs associated with health plans. Plus, you and your employees will get access to the same plans at the same price that Fortune 500 companies can give to their employees.

Outsourced employee benefits don’t make sense for every company, but it’s worth getting a few estimates and doing some research to see whether investing in a PEO would give your company a worthwhile ROI.