Employee benefits are complex. From pension plans to profit-sharing, they can take a lot of work to manage. While a human resources department will do its best, there may occasionally be issues that arise. Companies may found to be liable for problems with an employee benefits plan, such as errors and omissions. To protect yourself, you need to engage in conscientious risk management. Here are a few steps that you can take.
Analyze Your Potential Liability
Begin by completing an audit of your employee benefits processes. Does your company have current, updated, written business processes? Are these business processes frequently changing hands? The more rigorous your processes are, the less likely a mistake is to slip through. The higher churn rate your human resources department has, the more likely it is that training may be glossed over and that processes may be poorly followed. Further, it’s a best practice to have legal or expert help in reviewing employee benefits plans and making sure that these plans are properly compliant.
Identify Methods of Managing Risk
Once you’ve completed an audit, you should have a better idea of whether your organization is fully compliant, and whether there are certain potential stress points or challenges that need to be resolved. Business processes should be corrected, to make sure that written policies are clear, and that they are consistently being followed. Further, companies should engage in direct risk management, by acquiring insurance against potential liabilities. There are specific types of insurance policy that are designed to protect companies against errors and other issues with their employee benefits plans.
After risk has been effectively managed, the work isn’t done. Employers should continue to audit their employee benefits periodically, to make sure that business processes have remained static, and that employee benefits are still in compliance.
Consider Outsourcing Administration
Companies have two choices: they can try to manage their benefits internally, or externally. Small businesses and mid-sized businesses are often better off outsourcing their benefits administration, as they may not have the dedicated team necessary to make sure their benefits remain legal and compliant. When outsourcing benefits administration, the entirety of the benefits can be handled by an expert company. That includes the documentation, compliance requirements, and support for employees. Outsourcing administration may not be viable depending on a company’s budget, but can greatly reduce the company’s risk.
Ultimately, you can’t always make sure that an error or omission never happens. Even with the right risk management and operational processes in place, mistakes can occur. Working with a professional can help. To find out how to better manage employee benefits without risks, contact the experts at Haughn & Associates.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.