Compliance Connection

Three Benefits Administration Myths

Submitted by Ginger Huff, Arkansas State Manager, American Fidelity Assurance Co.

Myth One: Technology to run benefits programs is expensive.

Using technology for benefits management can streamline processes and sync with other essential back-office functions, like payroll and attendance. Having this technology can mean:

• Improved accuracy and real-time reporting

• Increased savings on paper, printing, and postage

• Reduced billing errors, leading to lower employer administrative costs

Benefits management is an essential function of HR that affects employee satisfaction in attracting top talent and preventing turnover. Streamlining this process with technology is an excellent way to manage benefits cost-effectively rather than tracking your benefits program manually.

Myth Two: Compliance rules are optional.

In the public and private sectors, non-compliance is not only frowned upon but costly. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most employer sponsored retirement and health plans to protect individuals in these plans. Violations of ERISA regulations can be costly, and repeated offenses will add up. Even if some rules are optional, the risk of not knowing which ones are and which aren’t is huge. Additionally, compliance changes within an organization may not always be communicated between departments, making compliance management even more challenging. Creating automated compliance processes could help ease the communication burden and ensure your organization follows the rules.

Myth Three: Investing in benefits education isn’t worth it.

According to a survey conducted by the Association of School Business Officials International (ASBO), 48% of school business professionals responded that getting out updates about existing, new, or changes to benefits was one of the biggest challenges to educating employees about their health, retirement, and supplemental benefits.

Employers who have difficulty providing benefits education for employees should consider partnering with a benefits education provider that offers multiple ways for employees to learn about their benefits.

Read more on the importance of effective benefits education