In this post-Affordable Care Act world of reporting and tracking employee hours, employers are figuring out how their HR and benefit departments can be more efficient with the help of technology.
But for some employers, incorporating benefits administration software is still an afterthought. Brian Westfall, HR market researcher at Software Advice, a company that specializes in benefits administration systems research, explains why benefits technology remains a low concern for some smaller businesses.
In Software Advices recent study, only 4% of the nearly 400 small business respondents note that they were looking at benefits administration software to help meet qualifications and reporting standards associated with the Affordable Care Act. Why do you think this was the case, even though many smaller employers will traditionally have small HR department dedicated to benefits?
I was surprised to learn how many businesses were already ACA compliant, or weren't affected. Either businesses are too small to be affected by the upcoming ACA employer mandate, meaning they have less than 50 full-time employees, or they were already providing health coverage for their employees anyway. In fact, according to Politico, 96% of businesses are too small to be affected by the ACA and, of those affected, more than 90% already offer health benefits. That's a large number of businesses that aren't thinking about this change.
Many small businesses report using manual methods, such as pen and paper or Excel spreadsheets, to track their employees health benefits information. Can this traditional tracking process still be manageable in todays day and age?
In large part, no. For one, if these companies continue to grow, they're going to reach a critical mass where it becomes unfeasible to track all this information manually. Secondly, by having the HR department manually putting in this information, companies are losing valuable time and bandwidth that can be put towards more strategic HR opportunities, such as recruiting or training.
Why do you think small businesses were more likely to use benefits administration software to track their workforces paid time off, followed by vacation accrual?
This could just be buyers using two different terms for the same thing. But it could also point to a growing trend of businesses dropping the traditional time-off system, where time is allocated between sick time, personal time, vacation time, etc., in favor of PTO time-off systems where workers can use their allotted number of days for any reason they please. The use of this type of system grew by 43% from 2002 to 2010, so it would make sense that small businesses are looking to track paid time off as a whole.
Overall, what implications do these findings have for the 2015 open enrollment period of small employer health care plans, and other benefit options?
As small companies grow to the 100-250 employee range, they are going to need to adopt software to handle all of that enrollment data. It becomes too much to do manually. More and more, enrollment is going to be taken out of the hands of HR departments and become an automated process between employees and providers. Employers and providers need to both be active in communicating benefits options to employees to avoid confusion.
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