It’s no secret that health insurance is a complicated subject. From deciphering information in benefits statements to sorting out which services and providers are covered, confusion and frustration are common themes among employees.
However, a new study shows that business owners are just as overwhelmed by the complexities of administering and managing health insurance benefits. Although cutting benefits as a means of saving money and easing the administrative burden may be appealing in the short term, businesses that scale back health benefits risk higher employee turnover rates.
Study Shows Employers Are Overwhelmed by Administrative Complexities and Changing Regulations
According to the 4th Annual Guardian Workplace Benefits Study, a majority of American businesses say they can’t keep up with the mounting demands of managing and administering their employee health benefits programs. Numbers from the study paint a dire picture:
- Sixty percent of employers reported feeling overwhelmed by the complexities and demands of their health benefits programs.
- When asked to gauge the complexity of their health benefits program, 59 percent of businesses rated theirs as having a “high complexity.”
- More than a quarter of all businesses surveyed said compliance is their chief concern, but less than 33 percent of these said they’re prepared to satisfy industry regulations.
- Seventy percent of businesses said they’re not equipped to adjust to new regulations at the local, state, or federal level—including regulations under the Americans with Disabilities Act, the Family and Medical Leave Act, and the Affordable Care Act.
Cutting Benefits Can Cost Small Businesses
While regulatory tangles and administrative complexities are a burden for the majority of businesses surveyed, these issues are particularly challenging for small businesses, which typically don’t have the resources and in-house expertise of their bigger counterparts.
As we discussed in our review of 2017 employee recruiting and retention stats, recent surveys reveal that today’s job seekers place high value on health benefits. Businesses that cut health benefits in a quest to reduce their administrative burdens could end up feeling a worse pinch in employee turnover.
Benefit Management Solutions for Small Businesses
To keep the benefits their employees want while reducing the administrative and regulatory headaches associated with benefits programs, many businesses have turned to alternatives to traditional group health benefits like taxable insurance stipends or tax-free reimbursement plans.
A growing number of small businesses are also investing in benefits software programs to manage a variety of small business health insurance offerings. In addition to making compliance easier, benefits administration software can help businesses save time as well as ensure they’re taking advantage of available tax breaks.
Studies show that cutting benefits like health insurance leads to higher employee turnover rates. Health benefit management software can help small businesses compete for and retain top talent while reducing many of the compliance headaches associated with benefit administration.
How are you managing your company’s small business health insurance plan? Let us know in the comments.