Wondering how you should approach the important issue of employee benefits? Art Brooks, Vice President of BeneTrac, shares his expert insight with American Small Business News readers on the subject of employee benefits for small businesses.

1. What are the benefits of offering a comprehensive employee benefits program for small business owners?

In offering their employees a comprehensive benefits program small business owners can also gain numerous benefits.  These can include greater employee satisfaction and retention, increased ability to attract new employees, reduced sick time for employees and less down time for them in having to attend to family illnesses.

2. Why do you think some small business owners are hesitant to provide employee benefits?

Cost is often an important factor in deciding whether or not to offer benefits and which to offer.  While small businesses can not always get the same price value on benefits packages that large corporations can, there are many options available that can be affordable, including those such as high deductible health plans with health savings accounts (HSAs). The latter have received increased interest as an alternative to traditional health insurance.

Many companies and individuals are drawn to the cost-effective nature of healthcare plans accompanying HSAs and the ability to save money tax-free, to name a few.  The plans, which enable consumers to put up to $2,850 before tax into a HSA for individuals and $5,650 for families for premiums in 2007, require that plan owners also have a low-cost high deductible health plan (HDHP).

The high deductibles from these plans and other medical expenses can be withdrawn tax-free from the HSA, much like a bank account, and anything left over can be carried forward into the next year or saved for retirement.  Other high-deductible plan options also exist.  Another big consideration in implementing benefits is the time involved in administration.
3. Are there things small business owners can do to make benefits administration more manageable?

Appointing a single person to be in charge of benefits can help to streamline management and eliminate confusion.  Technology can also be a big help in managing benefits.  A good benefits management system, for instance, is able to accept data from multiple Excel spreadsheets, databases, and paper documents, and provides the flexibility to interface with all kinds of systems and data.

It can help employees and HR in the enrollment process by evaluating each enrollment activity and applying any necessary combination of rules, messages, prompts, and options specifically designed to meet the exact eligibility requirements desired.  Many of today’s systems accommodate company-specific eligibility rules, employee classifications, etc., and provide multiple layers of security. Many link directly with carriers so that enrolling employees in benefits or making changes is automated and does not require information to be printed out and mailed to the provider.

Another big benefit is self-service.  Enabling employees to enroll on their own can offer time and cost-savings possibilities and employee satisfaction at gaining access to directly access and manage benefits online. For HR departments and businesses, self-service can be a huge time saver and provide added employee satisfaction.

Reports available through benefits management systems also offer a number of benefits, including the ability to access multiple views, from big picture to drill down, to enhance decision-making.

Finally, some benefits management systems also offer integration and information exchange with programs for managing payroll and other aspects of business, providing added efficiency.

4. What advice do you have for small business owners who are thinking about implementing a benefits program for their employees?

Perhaps the best advice is to suggest that they contact a knowledgeable benefits consultant/broker.  Most small businesses work hard just to develop and support their core business, and have little time left over for managing other tasks.  A benefits consultant specializes in health, dental, and other types of insurance and will know what plan options are available to best fit a small business owner’s particular employee demographics and SIC Code.  Wise counsel can help businesses to make the best decisions when it comes to meeting its needs for benefits.