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Top 5 Challenges HR Departments Face with Employee Benefits

Are you struggling to find the resources and time to keep up with changes in the Affordable Care Act and perform your daily responsibilities? Having trouble getting your employees on board and educated about the benefits packages you offer? Human Resource departments have progressively evolved over the years to expand their roles and include responsibilities such as managing employee compensation and benefits. As businesses continue to grow and develop, it’s important to understand how the benefits enrollment process affects HR managers, and what problems they may be facing to become more effective in their operations.

What are the main reasons HR departments may be struggling with employee benefits administration? Here is a list of the top 5 challenges, along with tips and tricks to overcoming them followed by an infographic.

benefits hr challenges

Challenge: Staying current in a changing market

Changes to the Affordable Care Act in 2016 require employers with 50+ full-time employees to provide benefits, resulting in an increase in job responsibilities for HR departments. In addition to balancing their daily workload (recruitment, employee relations, training, etc.), many HR professionals are having to learn new roles and skills. This includes staying up to date on the changing regulations of the ACA and accurately collecting and managing employee data to report to the IRS. With so many rules and regulations to abide by, especially with respect to health care reform, companies are more at risk for lawsuits, fines, and penalties.

Solution: Prepare early and stay in constant communication

  • Stay on top of the ever-changing compliance laws by subscribing to industry publications or hiring a broker to provide strategic knowledge. Read up on how benefits plan choices have changed post-ACA.
  • Update your HR tools and systems to account for tracking employee time and attendance
  • Integrate HR tools with payroll systems to ensure ACA compliance
  • Break up the workload between multiple departments (e.g., Accounts Payable or Finance handling payroll) so that HR isn’t fully responsible for every aspect of the benefits process

Challenge: Balancing added responsibilities with day-to-day duties

Traditionally, HR departments handle recruitment, workplace safety, employee relations, labor law compliance, payroll, training, and employee engagement. With an already highly-utilized team, employers are challenged to add the time-consuming tasks of managing progressive benefit strategies, exacting budgetary processes, and staying compliant with the evolving ACA needs. Employers face countless challenges around their benefits from employee education to enrollment to administration.

Solution: Consider a benefit partner for delivery, management, and support

  • Outsourcing benefits administration frees up your HR department to work on their daily tasks and responsibilities.
  • Employee benefits professionals’ expertise can save your company time and money, bringing to the table their knowledge of specialized benefit options and packages that would best fit your organization.

Challenge: Helping employees understand benefits

With the countless number of benefits and packages being offered, employees often have difficulty navigating this area on their own. In order to increase employee engagement and retention, HR professionals are responsible for educating employees on what benefits are available and what packages provide the best options for them and their families. This function of picking the right insurance packages and then communicating the value to your employees can be daunting without a knowledgeable broker who already has years of expertise in this area.

Solution: Simplify the complex world of benefits

  • Use innovative technologies to help manage the benefits experience.
  • Select a partner who can help you deliver outstanding results throughout the year, not just during open enrollment.
  • Provide 1:1 benefits enrollment experiences for your employees to foster understanding and appreciation. See some of the advantages of 1:1 benefits education.

Challenge: Appealing to different demographics

Creating a benefits strategy that appeals to all ages and demographics is extremely tough, if not impossible. While health, dental, and a 401k plan are incredibly important, a significant percentage of the workforce also highly values a flexible work schedule and vacation policy. The importance of recognizing that different groups of people value different things when it comes to benefits cannot be understated.

Solution: One size doesn’t fit all

Challenge: Making unbiased employment decisions

As an HR professional, you are both an advocate for the organization and the employees. You are the middle man between upper-level management and entry-level workers. It is your job to make sure the business hires and retains top talent at a cost that is manageable and increases your company’s bottom line.  

With that being said, it is hard to make unbiased employment decisions when you have access to so much employee information (e.g., health records, performance reports, etc.). For example, if an employee is costing you a significant amount of money in health issues and is also underperforming, you might reconsider their future with the company.

Solution: Adopt strict procedures and job responsibilities

  • Only discuss employee confidential information on a need-to-know basis  
  • Consider establishing a privacy officer role within your organization who has sole access to confidential employee information so the whole department isn’t responsible.

Preparing for the Future of Employee Benefits

By understanding the responsibilities and struggles HR departments face when dealing with benefits, your organization can better prepare and implement the right strategies to stay profitable. The benefits landscape is one that is constantly changing, and there is a multitude of options to choose from, so it’s important that this department stays well informed and up-to-date with what there is to offer.



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