Four Reasons Why You Need to be in Compliance in Managing Employee Benefits Plans
Employee benefits are a vital component of any organization’s talent management strategy. Done well, they help attract top talent and contribute to employee satisfaction and retention. However, with great benefits come great responsibilities, particularly in the realm of compliance.
Here are four reasons your company should make compliance a priority.
- Legal Obligations and Avoiding Penalties
Compliance with federal, state and local laws is non-negotiable when managing employee benefits plans. Failure to adhere to regulatory requirements can result in severe penalties, fines and even legal action against the organization. Compliance with laws such as the Employee Retirement Income Security Act (ERISA), Affordable Care Act (ACA), and the Family and Medical Leave Act (FMLA) are essential to ensure the organization’s financial health and reputation remain intact.
By diligently following compliance regulations, HR teams can protect the interests of both the company and its employees, fostering an atmosphere of trust and reliability.
- Ensuring Equal Opportunities
Compliant benefits management is crucial in maintaining fairness and equal opportunities for all employees. It ensures that benefits are distributed without discrimination and that every employee has access to the same level of benefits based on their eligibility criteria.
Compliance helps prevent any inadvertent bias in the benefits selection process and safeguards against potential lawsuits or grievances related to unfair treatment.
- Maintaining Employee Trust and Loyalty
Employees expect their employers to uphold their end of the bargain when it comes to benefits. They rely on these plans to secure their health, well-being and financial future. If an organization fails to comply with the promised benefits or changes the terms without proper notification, it can severely damage employee trust and loyalty.
On the other hand, demonstrating a commitment to compliance assures employees that the organization values their welfare, fostering a positive work environment and increasing overall job satisfaction.
- Mitigating Financial Risks
Compliance in benefits management plays a significant role in managing financial risks for both the organization and its employees. Non-compliance can lead to costly legal battles, fines and penalties.
Additionally, compliance ensures that the organization’s benefits plans are structured efficiently and cost-effectively. By adhering to regulations, HR can avoid unnecessary expenses and streamline benefits administration, contributing to long-term financial stability.
Compliance is an ongoing process, and regulations often evolve over time. In addition to all their other job functions, HR professionals must stay aware of the latest changes in benefit-related laws to ensure that the organization remains compliant at all times.
That is why it is crucial to work with a partner that takes a hands-on approach to compliance guidance. At Oswald, we work with you proactively to regularly audit your benefits plans, advise you on the latest changes to be aware of and help you take prompt corrective actions.
In the realm of employee benefits management, compliance is not an option but a fundamental necessity. By working with a partner like Oswald, you can rest easy knowing that your benefits compliance needs are being taken care of.