Open enrollment season has officially begun. The period from Nov. 1 through Jan. 15, 2023, marks the busiest time of year for many HR leaders and business owners.
According to a report on a survey of small business owners, “A large majority (87%) said they manage employee benefits on their own, spending an average of 1.6 hours per week on benefits administration. During open enrollment, employers say they spend about 8 hours managing the enrollment process.”
The onset of open enrollment season is also the time many organizations are receiving their employee health plan renewals. Health benefits costs rise each year, but the expected increase for 2023 will be higher than average. According to SHRM, “The average costs that U.S. employers pay for their employees' healthcare will increase 6.5% to more than $13,800 per employee in 2023, up from $13,020 per employee in 2022.”
Open enrollment is an ideal time for a reevaluation of health benefits administration strategies. If your organization wants to mitigate health benefits costs while still offering robust benefits in a tight labor market, partnering with a Professional Employer Organization, or PEO, could be your ideal solution.
Co-Employment Models Can Help Provide Access to More Affordable Benefits Options
According to NAPEO, co-employment “involves a contractual allocation and sharing of certain employer responsibilities between the PEO and the client, as delineated in a contract typically called a client service agreement (CSA).”
In plain English, this means that when your business has a co-employment arrangement with a PEO, both your organization and the PEO are responsible for certain agreed-upon obligations of employment.
Some businesses primarily partner with a PEO to manage their payroll and workers’ compensation programs. While other organizations use PEO services primarily for health benefits administration and HR compliance support.
Many PEOs provide scalable solutions that enable small- and mid-sized businesses to access more affordable health benefits options than they would normally have access to.
Partnering with a PEO Could Help Offset Rising Health Benefits Costs
Two of the largest barriers to offering quality health benefits that attract and retain top talent are often health benefits cost and implementation.
Some PEOs offer a solution to both of these concerns. As mentioned above, when you partner with one of these PEOs, your business has the option to join the PEO’s large group health plan, allowing your organization to take advantage of the economies of scale many larger companies use to lower their overall benefits costs.
Many PEOs execute HR tasks associated with open enrollment in addition to addressing individual employee claims and questions throughout the year. Even if your company employs a dedicated HR specialist or team, partnering with a PEO can help them be more efficient and access better health insurance options for your employees.
When you partner with SWBC PEO, you’ll gain the benefits of economies of scale and HR expertise. As a co-employer, we can help streamline your business operations and provide a safety net for benefits-related decisions.