5 Ways to Eliminate Costly Employee Benefit Mistakes

18 04 EB 5 Ways to Eliminate Costly Employee Benefit Mistakes - 5 Ways to Eliminate Costly Employee Benefit Mistakes

Employee benefits can be costly for a small business, often increasing an employee’s base salary by as much as 40%. Despite the costs involved, these benefits are often required in order to keep employees happy and to stop them from working for your competitors.

Many business owners, however, forget about the fees and fines which can be issued when common mistakes occur with their employee benefits. Here we’ve outlined 5 ways of eliminating costly employee benefit mistakes, allowing you to save money and rest assured that you’re doing the right thing.

1. Don’t give them all away for free

If employee benefits are free, the vast majority of people will simply take them. Why? Because they’re free, so they might as well – it’s not coming at any cost to them. However, if you provide benefits which the employee has to pay for or subsidize with their salary, they may think twice about how much they want that benefit. This is a good way of ascertaining how much your employees “actually” want certain benefits.

2.Covering unqualified employees or non-employees

Some (though not many) employees cover relatives or friends by purchasing group health plans. Claim denials, investigations and cancellations can easily come as a result of this. To easily see who is eligible for insurance, check your employee’s working hours via their WR-30.

3. Give them benefits that they actually want

Consider how much your employees are actually benefitting from the benefits you are providing them. For example, if you’ve got a workforce full of Millennials and Gen-Z-ers who are largely 30 and under, they’re probably not too concerned with life insurance coverage or pension plans at this stage in their lives; they’d probably rather have a pay rise!

4. Misinforming your employees about their benefits

Many employees will expect that you, as their employer, are providing them with adequate insurance coverage. If this is not true, however, you need to inform them. You could get yourself in a lot of trouble if you misinform your employees about their benefits, or even if you fail to inform them at all. Consider drafting an annual or quarterly statement for all your employees, informing them of the full scope of their employee benefits.

5. Not filing paperwork correctly

It can be very difficult to file insurance plans for different employees’ specific jobs if you aren’t completely familiar with their duties. Assuming you aren’t micromanaging your employees 24/7, you may find it difficult to detail their duties correctly. You can also run into similar paperwork problems for group health plans, as there is only a small window of time in which to enroll new employees onto the plan. Filing paperwork incorrectly can inevitably lead to costly legal fees should issues arise.

Providing employee benefits allows any businesses to build employee morale and thrive among their competitors. Nonetheless, it can be easy to make mistakes which will cost your business money down the road. Looking for more information and advice on employee benefits and insurance? Get in touch with us now!