How To Select A Group Benefits Advisor
As a human resources manager or an owner of a small business, one of the most important decisions you can make for your company is to select the right group benefits plan for your employees. Today, 52% of employees between the ages of 21 and 30 are worried about running out of money for retirement. About half of all employees count on their employers to provide group benefits. Progressive companies that provide group benefits also see positive effects on employee retention and productivity. Seventy percent (70%) of employees that are satisfied with their companys group benefits plan report that they are also satisfied with their job, compared to only 23% of employees that are not satisfied with their benefits plan. In addition, almost 60% of these satisfied employees believe they will continue working for the same company in the coming year.
With so much importance placed on a quality group benefits plan, how do you ensure you are selecting the right group benefits advisor to help navigate through the selection and implementation process? We have put together some key attributes to look for in a benefits consultant to ensure a successful outcome.
Objectivity
A group benefits consultant should be independent of a particular insurance or financial services company. Having an independent insurance agent or financial advisor that is not driven to sell one product line gives your company the ability to review all the options in the marketplace. If your group benefits advisor works for a large insurance company, you will not be able to see competitors options.
Transparency
A group benefits advisor should be up front with the fees and expenses associated with the recommended plans, including all administrative, recordkeeping and investment expenses. For health insurance, the commissions are set by the insurance company and range from 8% to 20%. For 401(k) administration, the average fees are 1.30% of total assets under management for small company plans and 1.08% of total assets under management for large company plans.
Comprehensive Offering
A group benefits administrator should have a comprehensive product offering to meet all of your companys needs. If you administrator is primarily a financial services firm and not a licensed Individual life insurance broker, you could be facing significant administrative challenges each pay period. If your group benefits administrator primarily sells , but cannot handle payroll deduction, then your total expenses could increase by hiring a third party payroll administrator.
Industry Credentials
A group benefits consultant should have industry credentials and references in addition to the licenses required by law. Seek out consultants that are members of industry organizations, such as the Society of Human Resource Managers (SHRM) or the Better Business Bureau. Do not hesitate to request references prior to discussing your companys needs with the advisor. Your advisor should be able to provide one or two references to contact and discuss other benefits implementations, even if they cannot disclose company names or plan details due to confidentiality.
Knowledge of PPACA
A group benefits advisor should have a thorough knowledge of the new Patient Protection and Affordable Care Act, passed in 2010. Many provisions of this law have already gone into effect and almost all provisions will be in effect by 2014. Your advisor should be knowledgable of the requirements under the law based on your company size and the tax implications for your business in the short and long term.
Selecting the right group benefits advisor is an important step in securing a companys future. For additional reading, including statistics and organizations mentioned above, see the bullet list below:
MetLife 10th Annual Study of Employee Benefits Trends: https://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/ml-10-Annual-EBTS.pdf
401(k) Averages Book, 12th Edition: www.401ksource.com
Society of Human Resource Managers: www.shrm.org
PeopleSurance Resources for Employers
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With so much importance placed on a quality group benefits plan, how do you ensure you are selecting the right group benefits advisor to help navigate through the selection and implementation process? We have put together some key attributes to look for in a benefits consultant to ensure a successful outcome.
Objectivity
A group benefits consultant should be independent of a particular insurance or financial services company. Having an independent insurance agent or financial advisor that is not driven to sell one product line gives your company the ability to review all the options in the marketplace. If your group benefits advisor works for a large insurance company, you will not be able to see competitors options.
Transparency
A group benefits advisor should be up front with the fees and expenses associated with the recommended plans, including all administrative, recordkeeping and investment expenses. For health insurance, the commissions are set by the insurance company and range from 8% to 20%. For 401(k) administration, the average fees are 1.30% of total assets under management for small company plans and 1.08% of total assets under management for large company plans.
Comprehensive Offering
A group benefits administrator should have a comprehensive product offering to meet all of your companys needs. If you administrator is primarily a financial services firm and not a licensed Individual life insurance broker, you could be facing significant administrative challenges each pay period. If your group benefits administrator primarily sells , but cannot handle payroll deduction, then your total expenses could increase by hiring a third party payroll administrator.
Industry Credentials
A group benefits consultant should have industry credentials and references in addition to the licenses required by law. Seek out consultants that are members of industry organizations, such as the Society of Human Resource Managers (SHRM) or the Better Business Bureau. Do not hesitate to request references prior to discussing your companys needs with the advisor. Your advisor should be able to provide one or two references to contact and discuss other benefits implementations, even if they cannot disclose company names or plan details due to confidentiality.
Knowledge of PPACA
A group benefits advisor should have a thorough knowledge of the new Patient Protection and Affordable Care Act, passed in 2010. Many provisions of this law have already gone into effect and almost all provisions will be in effect by 2014. Your advisor should be knowledgable of the requirements under the law based on your company size and the tax implications for your business in the short and long term.
Selecting the right group benefits advisor is an important step in securing a companys future. For additional reading, including statistics and organizations mentioned above, see the bullet list below:
MetLife 10th Annual Study of Employee Benefits Trends: https://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/ml-10-Annual-EBTS.pdf
401(k) Averages Book, 12th Edition: www.401ksource.com
Society of Human Resource Managers: www.shrm.org
PeopleSurance Resources for Employers
Be Sociable, Share!
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