Using external service providers to manage your employee benefits can be a wise move because their professionals must follow the most current employment laws, regulations, and standards. Things like workers’ comp, health care, life insurance, retirement, and more should be included in your comprehensive benefits plan. It can be a lot to handle and understand if you have a small or non existent HR department. These items are best left to a PEO for sorting and administrating.
A listing of the benefits to be administered might be:
- Workers’ Compensation
- Health care insurance
- Life insurance
- Disability insurance
- Voluntary accidental death and dismemberment insurance
- Miscellaneous Benefits
Out of nine key benefits administration tasks, employers in midsized and large companies are most likely to handle six completely or partially in-house. Large employers are more likely to outsource than midsized employers, but both are most likely to outsource complex functions with significant compliance requirements, including COBRA, Flexible Spending Account (FSA), and 401(k) administration.
For employers of all sizes, helping to ensure compliance is the most common driver of outsourcing. In order to help avoid lawsuits, fines, and penalties, they need access to specialized expertise that has become more expensive and burdensome to maintain within their internal HR organizations. The vast majority of HR managers in both midsized and large companies indicate that outsourcing at least some benefits administration functions adds real value by supporting regulatory compliance, providing access to expertise, and reducing the administrative burden on internal HR resources.