“A modern, sensible and common-sense solution for employer sponsored health plans and associations…………….”
By Jack Stanley, CPA
As a freelance auditor working with hundreds of corporate clients over the past +20 years, I’ve heard from a multitude of HR directors and payroll staff members complaining about voluntary benefits and the extra work involved.
“We have to chase debits and credits, and the carriers never seem to get it straight!” is a common complaint. “Offering voluntary benefits costs us time, money and headaches. It gives brokers free access to a captive audience while we do all the backend work and they make all the money. It’s an accounting nightmare!”
Voluntary benefits can be an important and valuable tool for employment purposes. Eliminating voluntary benefits to cure bookkeeping burdens is not the best course of action. Transitioning a menu of voluntary benefits from payroll deduction to direct pay is a better solution. This restructuring maintains the employer’s core purpose of offering employee paid voluntary benefits while streamlining efficiencies within the payroll and human resources departments.
The Solution
More employers are transitioning their traditional payroll deduction voluntary benefit plans to AI powered direct pay plans through online benefit aggregators like Fringe Benefits Online™.
Plan members gain more control over benefit decisions than they can through traditional one size fits all payroll deduction plans while at the same time retaining access to a menu of competitively priced guarantee issue insurance products. These products are commonly pooled for economies of scale which reduces underwriting volatility and provides effective rating stability.
Online benefit aggregators offer competitive shelf rated guarantee issue benefits. Plan members can enroll for benefits including a $5,000 dental plan for $41 per month or a $1,000 dental plan for $21 and a vision plan for $5. Additional benefits include all the traditional benefit offerings employees expect such as disability income insurance, cancer, heart/stroke, prepaid legal, life insurance and more.
Plan members are able to review benefit offerings at their convenience year-round for easy enrollment through a direct pay process. No more payroll deduction headaches for the payroll department.
Not all employees have a means to facilitate direct pay methods. However most do. In every household in the U.S. between 94% and 95.5% have access to at least one bank account and over 75% of U.S. households have at least one general-use credit card.
Those few who don’t have either can be issued an employer issued prepaid debit card. Employers can use payroll cards, which are reloadable debit cards, to pay employees who do not have bank accounts. These cards allow immediate access to funds and can be used for purchases and bill payments.
Imagine your own company branded dashboard empowering employees with the freedom to pick and choose benefits of their choosing while your payroll department enjoys the life of a Maytag repairman.
Moving away from status quo voluntary benefit plans gifts plan members more freedom to choose benefits fitting their individual needs and budgets and gets the plan sponsor out of the voluntary benefits business while still in it.
Fringe Benefits Online™ modernizes employee benefits with real choice, and zero admin complexity—all in one platform.
