We know it’s tempting for time-crunched business owners to use the same provider for payroll and employee benefits. But when it comes to something as complex as employee healthcare, the easy option is rarely the best. If you’re thinking about rolling the two together, consider these reasons before you do.
- They’re experts in payroll — not healthcare. Experienced benefits brokers have dedicated their careers to navigating the system and finding the best healthcare options for their clients.
- They operate in a national scope. Payroll providers service clients across the country and it’s likely they won’t know the specific market in your state as an experienced broker does.
- They won’t offer the best plans at the lowest cost. It all comes down to resources and expertise. If their main focus is payroll and they’re not in tune on where to look, opportunities will get missed.
- It’s tough to contact a human being. As it goes for many businesses these days, reaching a real person on the phone is a task at large payroll companies. With a broker you sidestep call centers altogether.
- Most offer a 24-hour response time. When an inquiry or problem surfaces, waiting up to 24 hours for a response is the norm when it comes to payroll companies. With a benefits broker, the response is immediate.
- They typically charge for a Section 125 Premium Only Plan (POP). Your broker will purchase a POP plan for you.
- They charge an annual fee for their POP plan. Even though POP documents don’t need to be updated annually, this is a common practice with payroll providers. Something benefits brokers won’t do.
- They may add hidden and unnecessary fees. Another common practice is adding confusing fees that clients aren’t familiar with. Typical fee names include: “ACA fee,” “compliance fee,” and “COBRA fee.”
- They may hit small companies with a “COBRA fee.” If you have fewer than 20 employees and COBRA doesn’t apply to your company, you should not be paying these fees.
- They may charge COBRA administration charges. Your benefits broker will pay the costs of an expert COBRA Third Party Administrator (TPA) to manage this for your company.
- They’re not skilled at navigating healthcare nuances. Payroll companies may not understand the complexities of various group medical plans and as a result cost you and your employees a lot of money.
- Most won’t prepare open enrollment material. Open enrollment is a crucial time, but many payroll companies won’t prepare your open enrollment materials, especially if you have a small team. Regardless of the number of people you employ, it’s important to keep them informed.
- Payroll companies charge extra for an SPD Wrap document. The US Department of Labor requires employers to have an SPD Wrap document with medical insurance. Most payroll companies outsource it to a third party and the employer is required to complete the compliance document. A benefits broker will prepare this for you at no charge.
- That personal touch is rare. Benefits brokers dedicate their working hours to clients while payroll services assign a rep that’s working on projects outside the realm of benefits. Developing a relationship with one broker you trust can make all the difference in the long run.
- Many payroll companies have high staff turnover. This means you’ll likely be working with somebody other than the salesperson who signed you up and promised great things. Benefits brokers typically have a very stable workforce with years of experience.
The biggest problem for employers is that a payroll company can give bad advice and the employer likely won’t know until problems surface and it’s too late to fix the problem.
If you’re on the hunt for a dedicated benefits broker you can trust, complete a simple contact form or give us a call 800-746-0045.