What are the most common mistakes employers make in benefits administration and how can you avoid them?

1 Mistake 1: Not updating benefits policies and documents

One of the most common mistakes employers make in benefits administration is not updating their benefits policies and documents regularly. This can lead to confusion, inconsistency, and non-compliance with changing laws and regulations. For example, if you do not update your summary plan descriptions (SPDs), summary of benefits and coverage (SBCs), or plan documents to reflect the latest changes in health care reform, COBRA, or ERISA, you could face penalties, lawsuits, or audits. To avoid this mistake, you should review your benefits policies and documents at least annually and whenever there are significant changes in your plan design, carrier, or legal requirements. You should also distribute the updated materials to your employees and keep records of their receipt.

2 Mistake 2: Not communicating benefits effectively

Another common mistake employers make in benefits administration is not communicating their benefits effectively to their employees. This can lead to low enrollment, dissatisfaction, and underutilization of the benefits you offer. For example, if you do not explain the value, features, and eligibility of your benefits clearly and frequently, your employees may not appreciate them, enroll in them, or use them properly. To avoid this mistake, you should develop a comprehensive and ongoing communication strategy that covers all aspects of your benefits program. You should use multiple channels, such as emails, newsletters, webinars, or meetings, to reach your employees and answer their questions. You should also provide educational materials, such as brochures, videos, or calculators, to help your employees understand and compare their options.

3 Mistake 3: Not automating benefits administration

A third common mistake employers make in benefits administration is not automating their benefits administration processes. This can lead to inefficiency, errors, and delays in managing your benefits data and transactions. For example, if you rely on manual or paper-based methods to enroll, update, or terminate your employees' benefits, you may encounter problems such as data entry errors, missing forms, duplicate records, or missed deadlines. To avoid this mistake, you should invest in a benefits administration software or system that can automate and streamline your benefits administration tasks. This can help you save time, reduce errors, improve accuracy, and enhance security of your benefits data. It can also help you integrate your benefits with other HR functions, such as payroll, performance, or compliance.

4 Mistake 4: Not measuring benefits outcomes

A fourth common mistake employers make in benefits administration is not measuring the outcomes and impact of their benefits program. This can lead to wasted resources, missed opportunities, and misaligned goals. For example, if you do not track and analyze the key metrics and indicators of your benefits program, such as enrollment rates, participation rates, utilization rates, cost trends, or employee satisfaction, you may not know how well your benefits are performing, what areas need improvement, or what strategies are working. To avoid this mistake, you should establish and monitor a set of measurable and relevant goals and objectives for your benefits program. You should also collect and report the data and feedback from your employees, carriers, and vendors to evaluate your benefits performance and return on investment. You should also use the insights and findings to adjust and optimize your benefits plan design, communication, and administration.

5 Mistake 5: Not seeking expert advice

A fifth common mistake employers make in benefits administration is not seeking expert advice or assistance when they need it. This can lead to poor decisions, oversights, or risks in managing your benefits program. For example, if you do not consult with a benefits broker, consultant, or attorney when you are selecting, negotiating, or renewing your benefits plan, you may miss out on the best deals, options, or solutions for your business and employees. You may also overlook some important legal or compliance issues that could expose you to liabilities or penalties. To avoid this mistake, you should seek professional guidance and support from qualified and experienced benefits experts who can help you navigate the complex and dynamic benefits landscape. You should also leverage their resources, tools, and networks to enhance your benefits administration capabilities and outcomes.

Benefits administration is a vital and challenging HR function that requires attention, care, and expertise. By avoiding these common mistakes and following these best practices and tips, you can improve your benefits administration performance and results. You can also increase your employee satisfaction, retention, and engagement with your benefits program.