How to Select an Employee Benefits Provider in 9 Steps

Six out of ten employees plan to review their benefits before committing to an employer. To attract and retain top talent, US companies need to offer competitive and affordable benefits packages.

A great benefits provider can help your program stand out while staying within budget. However, finding the right provider can be challenging due to the saturated market, each offering different packages, fees, and conditions.

Our article breaks down the step-by-step process of selecting an employee benefits provider. Continue reading to discover how to find a supplier that can support your compensation strategy.

Step 1. Clarify your business needs and goals

Before you start engaging benefits providers, it’s important to understand your requirements. Defining these needs helps narrow down your options, as you can focus on providers that have all the essential features and support for your business, with no unnecessary extras or notable omissions.

Look at the following factors when identifying your needs:

• Workforce size and location
• Employee demographics
• Local laws and guidelines 
• Industry-specific regulations
• Company culture and values
• Projected growth
• Benefits administration processes

For example, if your company has a high percentage of young professionals, you might focus on employer-sponsored student loan assistance. Whereas if they’re predominantly families, you’d be more likely to look at maternity care or fertility services.

Consider your future needs as well as your current priorities. If you intend to expand abroad or hire new workers, your benefits requirements are likely to change. Planning ahead ensures your packages remain relevant as your workforce evolves.

Step 2. Collect employee feedback

Involving your team in the selection process can help ensure the offerings will meet their needs. Then, the overall program is more likely to be successful, with high participation rates and improved employee satisfaction.

Use a combination of different feedback methods to capture a wide range of opinions and detailed insights. Here are some of the most effective options:

• Surveys: Distribute questionnaires to collect data on general employee sentiment. You can ask which benefits they value the most and which plan structures work best for them

• Focus groups: Arrange for small, diverse groups of workers to discuss their views on benefits. The conversation can let you get more in-depth insights from a variety of perspectives. There’s also the opportunity to ask follow-up questions

• Anonymous suggestion boxes: Introduce a digital suggestion box that employees can use to ask questions or share their thoughts. You can encourage candid feedback and get input on factors you might not have considered

• Town hall meetings: Host open forums where teams can directly share their opinions with management. Remote-first companies can hold these online so everyone can attend

Step 3. Determine a budget

Analyze your finances to see how much you can allocate to the new provider. The average US company spends 38% of its compensation budget on benefits, to give you a broad estimate. This comes to around $23 USD per worker per hour.

However, the exact percentage differs between businesses. Always tailor your budget to your company’s size, location, and industry.

Also, consider how much you need to spend to maintain compliance with local regulations. Many countries have made certain benefits mandatory. For example, US employers must provide a certain amount of health insurance coverage under the Affordable Care Act (ACA).

Step 4. Research providers

Once you have a clear understanding of your needs and budget, it’s easier to identify suitable providers. Start researching the ones that seem to fit your requirements in more depth.

Look specifically for providers that specialize in businesses like yours to see whether they have a proven track record of success. Search for case studies and reviews that demonstrate the impact the provider has had on the client company. 

Attending industry events can also give you insights into the latest benefits trends in the US. You may learn of upcoming providers or established ones with new packages. Hosts may mention how suppliers are solving challenges relevant to your business like automating benefits administration or managing contractor perks.

Step 5. Assess benefits options and customization

Evaluate the variety and quality of benefits each provider offers. Your packages should address a diverse range of employee needs and preferences. For example, when considering health insurance, prioritize options that include vision and dental coverage in addition to basic care.

Consider how the providers are responding to new demands. For example, reports show there are growing concerns about how only 58% of companies offer timely access to mental health care. Is the provider updating their packages in response or proactively addressing worker needs?

Also, evaluate how easily you can customize the packages to individual team members. Does the provider let enrollees choose from different options and tiers? The majority of employees are more likely to value benefits they pick themselves, increasing their overall job satisfaction.

Step 6. Test the platform

Most benefits providers use software to facilitate employee enrolment and manage changes. The platform should be easily accessible and intuitive so every team can use it without issues. 

You can explore a potential provider’s software by watching video tutorials or reviews. For a closer look, see if you can arrange a demo. The provider can give you a live demonstration of all the platform features and answer any questions. 

While you’re inside the system, see how many steps it takes to perform tasks and how easily you can navigate the menus and dashboards. Ask to see both the administrator and the employee's perspective. You need both to be comfortable using the system for the best results.

Also, double-check the software has the following features:

• A self-service portal

• Data analytics and reporting

• Custom dashboards

• User permissions

• Secure data storage

If you manage benefits administration through an HRIS, ensure you can easily integrate with payroll, accounting, and other business platforms. This seamless connectivity allows you to manage data across systems efficiently while keeping sensitive information secure.

Step 7. Evaluate the customer support

You can minimize disruption and reduce stress for employees by ensuring your benefits provider has responsive customer support and solves issues quickly. For example, if a team member has a claim denied, a quick explanation can help them understand their options.

Providers should offer multiple contact methods so you can choose the most convenient way to reach them. Check that they have email, live chat, and phone support at a minimum. 

Prioritize companies that assign a dedicated account manager to each client. This ensures continuity, as the manager will become familiar with your business, saving your team from repeatedly updating different contacts. A dedicated point of contact also reduces the likelihood of confusion and errors.

Step 8. Learn about the setup process

Ask the provider about their standard implementation process to establish a realistic timeframe and agree on key milestones. For instance, you might aim to complete a pilot enrollment for 10% of employees by a specific date.

A clear communication plan is essential to keep everyone on track. Ensure the provider is available for regular meetings to discuss progress during the early stages of implementation. For quick updates that don't require meetings, ask how they plan to keep your team informed.

Also, see what resources and support the provider can offer. Do they have training materials for both administrators and employees using the system? What level of expertise can they provide to help with data transfers and troubleshooting?

Step 9. Review the contract

Before signing the contract, review the terms and conditions of the agreement. Consider getting in-house or outsourced legal experts to look over the agreement and benefits package to confirm it complies with local regulations. Every state has different requirements when it comes to benefits administration, including what you can and can’t offer employees, notification obligations, and more.

Consider reviewing the following contract sections to see whether they serve your business interests:

• Fees and payment schedule
• Contract length
• Termination clause
• Performance guarantees
• Dispute resolution
• Confidentiality agreement

If you encounter any unfavorable terms, try to negotiate a better deal with the provider. Ensure you document any agreed-upon changes and then you’re ready to sign the contract.

Streamline US benefits administration with Deel

Choosing the right employee benefits provider can have a significant impact on your business. In the competitive US job market, it can help you hold on to top talent and attract new candidates.

Deel PEO simplifies benefits administration for US teams, enabling you to:

• Offload your HR, payroll, and benefits admin work for US workers
• Outsource tasks associated with establishing, maintaining, and managing your organization’s benefit enrollment packages
• Manage compliance with local and international labor laws, including COBRA and ACA
• Receive personalized support to simplify plan selection, annual renewals, and more
• Empower workers to manage their own benefits via a self-service portal
• And more

Want to learn more about how Deel PEO can help your organization? Arrange a 30-minute demo with our team.