As small business owners, we tend to take on any task that will save us money. It causes us to wear a lot of hats, both out of necessity and self-preservation. Some tasks are easier than others — and health care is certainly one of the more complicated ones.
Many companies use benefits software or outsource the management of their healthcare reimbursement plans (HRPs). If you are thinking of self-administering your HRP, consider these important factors before making a decision.
Can You Self-Administer Healthcare Reimbursement Plans?
Healthcare reimbursement plans can be administered by small businesses owners as long as they carefully comply with federal regulations. Because HRPs fall under ERISA, HIPAA, IRS, and ACA purview, proper documentation describing the terms and conditions of the plan must be in place. If you choose to self-administer, you will be responsible for creating such documents to ensure your compliance with all applicable regulations.
HRP Compliance Mistakes Can Be Costly
In 2016, the DOL drastically increased penalties for ERISA compliance violations. The amount of the fine varies greatly based upon the violation — with some of them nearly doubled. For example, the Society for Human Resource Management reports that the maximum fine associated with "failure to furnish of automatic contribution arrangement notice to defined contribution (DC) plan participants” increased from $1,000 per day to $1,632 per day.
Using benefits software will make sure that you aren’t incurring any penalties by automatically creating digital copies of necessary documents. In addition, the software company will keep up with any changes in health care regulations and modify your paperwork accordingly.
Frankly, You Have Better Things To Do
Yes, entrepreneurs wear a lot of hats, but one could argue that the most important one involves taking care of customers. Any time you spend worrying about plan documents and compliance issues is time taken away from the reasons you started your business. You don’t have to go as far as hiring a third party administrator (TPA) — adopting benefits software can take a load off your mind so you’re not sweating the small stuff.
While the desire to save money by self-administering your healthcare reimbursement plan is understandable, doing so is often more trouble than it’s worth. Hiring a TPA or relying on benefits administration software can be a worthwhile investment, as it frees up your time and resources.
What questions do you have about how benefits software could help manage your healthcare reimbursement plan? Leave them in the comments below — we’ll answer them!