Rare is the company with a benefits package that is entirely handled in-house. Most companies rely on a benefits partner to some degree. But partners matter. Teaming up with just anyone is never advisable in the benefits arena. Things are just too complicated to take chances with an untested partner who may or may not be able to deliver.
Benefits partners come in many forms. They include:
- Benefits (insurance) brokers.
- HR service providers.
- PEO services.
- Third-party administrators.
A typical American company with a group health insurance plan relies on either a benefits broker or HR service provider to secure that plan. Administration can be handled in-house or left to the broker as well. PEO services generally offer access to either traditional health insurance or self-funded plans. As for third-party administrators, servicing self-funded plans is their specialty.
Choices, Choices, and More Choices
A company’s employee benefits partner matters at multiple levels. Near the top is the reality of having so many choices. There are more than 100 insurance carriers across the U.S. Offering all types of group plans. There may be just as many third-party administrators with access to self-funded minimum essential coverage (MEC) plans. But that is not all.
Employers also need to consider health savings accounts (HSAs), individual coverage health reimbursement arrangements (ICHRAs), retirement accounts, and a full range of voluntary benefits they can leverage to enhance health coverage. It is almost overwhelming when one steps back and tries to account for it all.
A company’s benefits partner needs to be aware of as many options as possible. Not only that, but a partner also needs to know how all the options work in relation to the company’s circumstances. Needless to say that knowledge is power when you are a benefits broker or third-party administrator.
Partners Matter to Budgets
Another thing to consider is that benefits partners matter when it comes to budgets. For example, Las Vegas based StarMed (Mec plan providers) says that most of its clients choose self-funded MEC plans because they are a lower cost alternative to traditional group insurance. Their clients want to offer ACA-compliant health plans without paying out the nose for an insurance policy. Self-funding does the trick.
Outsourcing to a benefits partner unwilling to work within a client’s budget only makes a difficult situation worse. Unfortunately, there is incentive for brokers to push the most expensive plans. After all, their income is tied directly to sales.
The other side of that coin is paying a third-party administrator for its services. One way or the other, employers pay for the services their partners provide. The cost of those services needs to be applied to the healthcare budget. Therefore, it is in the best interests of an employer to find a benefits partner that will get the job done while still being affordable.
A Headache-Free Experience
Choose the right benefits partner and a company stands to enjoy a headache-free experience with every plan year. For example, full-service partners handle everything. They investigate all the options, they put together proposals, they handle quotes, and they ultimately take care of open enrollment. The employer is left with nothing to do but pay the bill.
Full-service providers are worth the investment. Letting someone else handle benefits free company owners and executives to pay attention to other things. It reduces the risk of compliance issues, streamlines benefits administration, and provides a bridge between employer and employee for all things benefits related.
If your company is looking for a new benefits partner, choose wisely. Your choice of partner will affect every aspect of offering employee benefits.