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Do I actually need benefits administration software, or can my broker / payroll just handle it?

✓ Verified Last reviewed by AnswerStack Next review due Oct 20, 2026

Direct answer

Every claim is sourced below

Most small employers do not need to buy benefits administration software, because the broker placing your coverage can usually give you a platform such as Employee Navigator or Ease at no direct charge, since those systems are licensed to the brokerage rather than to the employer.[9][10][14] The answer shifts as compliance load grows: reaching 20 employees turns on COBRA and its 30 day and 14 day notice clocks,[3][4] averaging 50 full-time employees including full-time equivalents makes you an applicable large employer filing Forms 1094-C and 1095-C every year,[1][2] and passing 100 participants ends the small welfare plan exemption from Form 5500 reporting.[5] Buying your own fits when you want benefits, payroll, and HR in one record, which starts near $10 to $25 per employee per month at published HRIS rates before the benefits add-on,[11] or when a professional employer organization absorbs the function for a monthly per employee fee.[12] Ask what platform your broker already licenses before spending anything, and what the brokerage is paid, since a broker expecting $1,000 or more has to disclose that compensation to the plan fiduciary in advance.[7] This is general information rather than legal advice.

Do you actually need benefits administration software?

No law requires benefits administration software. Plenty of employers with a dozen people still run open enrollment on paper forms the broker collects and keys into carrier portals, and the arrangement holds up fine. What the law requires is the underlying work: an accurate eligibility record, enrollment the carrier will accept, a written cafeteria plan document if premiums come out of pay pre-tax,[8] COBRA notices on a fixed clock once you reach 20 employees,[3][4] and annual filings that switch on at specific size thresholds.[1][2][5] Software is one way to get that done, and a broker doing it by hand is another that is frequently cheaper for a small fully insured group.

Five arrangements are genuinely in play

The realistic choice is wider than buy or do not buy. You can run enrollment on paper with the broker submitting to carriers; use a platform your broker licenses, most often Employee Navigator or Ease;[9][10] turn on the benefits module inside the payroll or HRIS system you already pay for;[11] buy a standalone benefits administration platform; or move the whole function to a professional employer organization for a monthly per employee fee.[12]

Why the broker route covers so many small employers

Employee Navigator and Ease sell to brokerages, not to employers. Employee Navigator's pricing page lists four broker tiers and publishes one rate, $0.45 per employee per month for 834 EDI carrier feeds, with the rest quoted by its sales team.[9] Ease prices by agency user count and employee volume, then quotes add-ons to the broker such as $6 per employee per form per year for ACA filing.[10] Because the license sits with the agency, and the agency is paid through commission already inside your premium, the employer commonly pays nothing extra for access.[14]

What moves the decision

Complexity moves it more than headcount alone. One medical plan, one dental plan, one state, and eight employees generates a stack of paper once a year that a broker's account manager can clear in an afternoon. Four carriers, staff in five states, and mid-year life events generate a matching problem that recurs every pay period.

How do the five arrangements compare on cost, effort, and compliance?

None of these five wins on every measure, which is why the same question gets different right answers at 12 employees and at 120. The cheapest option on direct cost is usually the most expensive in your own hours.

Arrangement Direct cost to you Employer effort Compliance coverage Fits best when
Paper, broker submits Nothing beyond commission already in your premium [14] Heavy for a few weeks a year Nothing built in; notices and filings stay manual [3][5] Under 20 employees, one carrier, one state
Broker-licensed platform (Employee Navigator, Ease) Usually nothing directly; the agency holds the license [9][10][14] Moderate setup, light maintenance Enrollment, carrier feeds, ACA reporting by broker tier [9][10] Fully insured small groups with an engaged broker
Benefits module in payroll or HRIS Add-on to a base near $10 to $25 per employee monthly [11] You own configuration and data quality Enrollment and deduction sync; ACA and COBRA extra [11] You already pay for the HRIS
Standalone benefits platform Quoted per employee monthly, rarely published [14] Highest setup effort, needs a named owner Deepest eligibility and life event rules Complex plan design, self-funded, many locations
Professional employer organization Monthly per employee fee on top of benefit costs [12] Lowest ongoing effort PEO administers benefits, payroll tax, workers compensation [12] You want one vendor and its larger group plans

Two of these stack rather than substitute, because a broker-licensed platform and a payroll benefits module often run side by side, with one owning enrollment and the other owning deductions. That works when the connection between them is a real file feed rather than somebody retyping elections.

How does each arrangement actually work?

Paper or spreadsheet with the broker doing the work

Employees complete carrier forms, you check eligibility against your own list, and the broker's account manager submits to each carrier. Your cost is time plus the commission already inside the premium.[14] It holds together while plan count is low and turnover is slow, because every step depends on one person holding the whole picture.

A platform your broker licenses

The brokerage buys the license, builds your plans, and gives you and your employees logins. Employee Navigator sells four tiers to brokers, and the capabilities your company gets depend on which one your agency bought, with 834 EDI carrier feeds priced at $0.45 per employee per month on the middle tiers and included at no per employee charge on Platinum.[9] Ease bundles carrier connections, digital employee records, and enrollment in English and Spanish into every tier.[10] The practical question is whether your broker has configured the platform and kept plan builds current.

The benefits module inside your payroll or HRIS

Most payroll and HRIS vendors sell benefits administration as an add-on. BambooHR publishes Core, Pro, and Elite plans at $10, $17, and $25 per employee per month, with payroll and benefits administration sold separately at a 15 percent bundle discount, and flat pricing from $250 a month for employers with 25 or fewer employees.[11] The attraction is one employee record, so a new hire, a raise, and a benefits election all touch the same row. The trade is narrower carrier connections.

A standalone benefits administration platform

Standalone platforms such as PlanSource and bswift sit between your carriers and your payroll system and do nothing else, which is why they carry the deepest eligibility rules and life event handling. They are also the least transparent on price, since almost none publish per employee rates and instead quote against headcount and plan complexity.[14]

A professional employer organization

A PEO takes over benefits, payroll tax administration, workers compensation, and HR support together, usually offering coverage through its own plans rather than yours. TriNet describes a flat per employee per month administrative fee covering payroll processing, payroll tax administration, HR expertise, benefits administration, workers compensation administration, and platform access, with medical, dental, and vision costs billed separately.[12] For a 25 person company the appeal is a single vendor and a larger risk pool, set against less control over plan design and a harder exit.

Which triggers change the answer?

Seven events change the work enough to reopen the question, because each adds a filing relationship, a legal clock, or a reconciliation that repeats. The thresholds below are general information rather than legal advice.

Trigger Threshold or signal What it adds
Headcount reaches 20 COBRA is exempt below 20 employees on a typical business day in the prior calendar year [3] 30 day employer notice, 14 day administrator notice [4]
50 full-time employees including equivalents At least 50 on average in the prior year makes you an applicable large employer [1] Forms 1094-C and 1095-C yearly, e-filed at 10 total returns [2]
100 plan participants The reporting exemption covers welfare plans under 100 participants at plan year start [5] Form 5500 filing
More carriers and plans Three or more carriers, or differing eligibility rules One enrollment file and one reconciliation per carrier
A second state Any employee outside your home state State continuation rules, plan availability, separate rates
Self-funded or level-funded 27 percent of covered workers at firms of 10 to 199 are self-funded [13] Eligibility errors cost claim dollars, not paperwork
Enrollment still on paper More than half of elections handled by hand Rekeying causes missed effective dates and wrong deductions

Reaching 20 employees

COBRA attaches once all employers maintaining the plan normally employed 20 or more employees on a typical business day in the prior calendar year.[3] Each termination then starts a clock, with 30 days for you to tell the plan administrator and 14 days for the administrator to notify beneficiaries.[4]

Reaching 50 full-time employees including equivalents

Status is measured on the prior year's monthly average, counting anyone at 30 hours of service a week or 130 hours a month as full time and converting part-time hours into equivalents.[1] Forms 1094-C and 1095-C follow whether or not you offered coverage, and electronic filing begins at 10 total information returns.[2] Tracking hours by month for variable-hour staff is the part that defeats spreadsheets.

Passing 100 participants

Welfare plans under 100 participants at the start of the plan year, funded from general assets or exclusively through insurance contracts, are exempt from the annual report.[5] Above that count the Form 5500 arrives, which is usually where a folder stops working as a system of record.

More carriers and more plan options

Each additional carrier means another eligibility file, another set of enrollment rules, and another invoice to reconcile. Two can be checked by hand, while five with different effective date rules cannot be checked reliably, which is what carrier EDI feeds exist to solve.[9]

Employees in a second state

A second state changes which plans a carrier will sell you, adds state continuation rules that can reach employers below the federal COBRA threshold, and splits your rate structure.

Self-funded or level-funded plan design

Self-funding turns eligibility into a financial control, because the plan pays the claim directly. Two thirds of covered workers sit in self-funded plans overall, though only 27 percent at firms with 10 to 199 workers.[13]

Paper still doing most of the work

The signal is how much of enrollment moves through rekeying. When elections travel from a form to a spreadsheet to a carrier portal to a payroll screen, each hop is a place for a wrong number.

What should you ask your broker before buying anything?

Start by asking which platform the brokerage already licenses and what it would take to turn it on for your group. A brokerage running Employee Navigator or Ease across its book can usually add your company without charging you, because the license is priced by agency users and total employee volume rather than by employer.[9][10][14] If no platform exists, or nobody has built your plans in it, you have learned something useful before spending anything.

Ask what the brokerage is paid

A covered service provider expecting $1,000 or more in direct or indirect compensation from a group health plan has to describe that compensation in writing to the responsible plan fiduciary, reasonably in advance of the contract being entered into, extended, or renewed, and brokerage services are named in the statute.[7] Requesting that disclosure is routine, and reading it tells you what the relationship costs.

Ask who does each piece of the work

Write out the tasks and name an owner for each: building plans each year, collecting elections, submitting to carriers, reconciling monthly bills, sending COBRA notices on the 30 day and 14 day clocks,[4] producing Forms 1095-C if you are an applicable large employer,[2] and pushing deductions into payroll. Unowned rows are the actual gap, and a platform does not fill them by itself.

Ask about carrier connections and payroll

Find out which of your carriers accept an 834 EDI feed through the broker's platform and which still require manual entry, since Employee Navigator prices those feeds separately by tier.[9] Ask the same about payroll, where Ease lists integrations at $0 to $1.50 per employee per month.[10]

Ask what happens if you change brokers

Because the license belongs to the agency, moving your account can mean losing the configuration, the historical enrollment data, and the employee logins. Ask how your data would be exported and in what format, since that answer is often what pushes a growing employer toward a system it owns outright.

How this answer was researched · AnswerStack

This answer was built from primary legal and vendor sources read on July 20, 2026 rather than from vendor marketing summaries. Compliance thresholds come from the Internal Revenue Service for applicable large employer status and Form 1095-C reporting, and from the ERISA statutory and regulatory text on the Cornell Legal Information Institute site for the COBRA 20 employee threshold, the notice clocks, the small welfare plan reporting exemption, the summary plan description rule, and the broker compensation disclosure.[1][2][3][4][5][6][7] Pricing came from the vendors' own pages the same day,[9][10][11][12] and coverage statistics from the 2025 KFF Employer Health Benefits Survey.[13]

The AnswerStack Editorial Team sells no benefits software, takes no vendor compensation, and holds no brokerage appointments. If you administer benefits for a living or work for a platform named here, corrections are welcome, particularly on broker licensing practice and state continuation rules. Nothing here is legal, tax, or benefits advice.

This answer was written and reviewed by the AnswerStack Editorial Team, which has no commercial stake in the products, companies, or methods discussed. Every claim is cited inline and verified on the dates shown.

What benefits administration software does not do

It does not make you compliant by itself

ERISA obligations attach to the plan and its administrator regardless of what software you run. A summary plan description has to reach participants within 90 days of becoming a participant, or within 120 days of the plan becoming subject to Part 1 of Title I, whichever is later.[6] Taking premiums out of pay pre-tax requires a written cafeteria plan under Section 125, and that written plan is a document rather than a setting in an enrollment portal.[8]

It does not replace the broker

Plan selection, renewal negotiation, carrier escalation, and claim advocacy sit with the broker or consultant, and an enrollment platform performs none of them. Employers who buy software specifically to reduce broker dependence often find the two roles were never overlapping.

It does not lower your premium

Benefits administration touches the administrative layer rather than the risk. Average annual premiums reached $9,325 for single coverage and $26,993 for family coverage in the 2025 KFF survey, and no enrollment system moves those figures.[13]

It does not fix an inaccurate eligibility record

A platform loaded from a bad census reproduces the same errors faster and in more places, which is why implementation is where the cleanup has to happen.

It is not legal advice, and thresholds shift

The figures here are current for the 2026 plan year as published by the IRS and in the ERISA text cited.[1][2][3][5] State continuation rules, state reporting mandates, and your own plan documents can add requirements, so confirm your obligations with counsel.

Sources

Determining if an employer is an applicable large employer

Internal Revenue Service

Primary source Verified Jul 20, 2026 Supports: ALE status at 50 or more full-time employees including full-time equivalents averaged over the prior calendar year; full-time defined as at least 30 hours of service per week or 130 hours per month; part-time hours converted to equivalents by dividing by 120; employers below the threshold are not su

“An employer is an ALE if it has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year. A full-time employee for any calendar month is an employee who has on average at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month.”

Instructions for Forms 1094-C and 1095-C

Internal Revenue Service

Primary source Verified Jul 20, 2026 Supports: ALE members file Forms 1094-C and 1095-C annually; electronic filing required at 10 or more information returns counted in aggregate; February 28 paper and March 31 electronic filing dates, with March 2, 2026 and March 31, 2026 for 2025 forms; alternative furnishing by posting a clear and conspicuou

“If you are required to file 10 or more information returns during the year, you must file the forms electronically... An ALE Member must furnish a Form 1095-C to each of its full-time employees by March 2, 2026, for the 2025 calendar year.”

29 U.S.C. 1161: Plans must provide continuation coverage to certain individuals

Legal Information Institute, Cornell Law School

Primary source Verified Jul 20, 2026 Supports: COBRA continuation coverage requirement and the small employer plan exception for plans where all employers maintaining the plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year

“Subsection (a) shall not apply to any group health plan for any calendar year if all employers maintaining such plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year.”

29 U.S.C. 1166: Notice requirements

Legal Information Institute, Cornell Law School

Primary source Verified Jul 20, 2026 Supports: Written notice of COBRA rights at the time coverage commences; employer notice to the plan administrator within 30 days of a qualifying event; administrator notice to qualified beneficiaries within 14 days of being notified

“the employer of an employee under a plan must notify the administrator... within 30 days... of the date of the qualifying event... any notification shall be made within 14 days... of the date on which the administrator is notified.”

29 CFR 2520.104-20: Limited exemption for certain small welfare plans

Legal Information Institute, Cornell Law School

Primary source Verified Jul 20, 2026 Supports: Welfare benefit plans covering fewer than 100 participants at the beginning of the plan year, with benefits paid from the general assets of the employer or provided exclusively through insurance contracts, are exempt from filing an annual report

“covers fewer than 100 participants at the beginning of the plan year... the administrator is not required to file with the Secretary an annual or terminal report.”

29 CFR 2520.104b-2: Summary plan description

Legal Information Institute, Cornell Law School

Primary source Verified Jul 20, 2026 Supports: Plan administrator must furnish the summary plan description to participants within 90 days after an employee becomes a participant, or within 120 days after the plan becomes subject to Part 1 of Title I, whichever is later

“90 days after the employee becomes a participant... within 120 days after the plan becomes subject to part 1 of title I.”

29 U.S. Code 1108: Exemptions from prohibited transactions, subsection (b)(2)(B)

Cornell Law School Legal Information Institute

Primary source Verified Jul 20, 2026 Supports: Covered service providers to group health plans, including brokerage and consulting services, that reasonably expect $1,000 or more in direct or indirect compensation must disclose that compensation in writing to the responsible plan fiduciary reasonably in advance of the contract being entered into

“reasonably expect[ing] $1,000 (or such amount as the Secretary may establish in regulations...) or more in compensation, direct or indirect... not later than the date that is reasonably in advance of the date on which the contract or arrangement is entered into, and extended or renewed.”

Publication 15-B, Employer's Tax Guide to Fringe Benefits

Internal Revenue Service

Primary source Verified Jul 20, 2026 Supports: A cafeteria plan under Section 125 must be a written plan, and it allows employees to choose between cash and qualified benefits including accident and health coverage, adoption assistance, dependent care assistance, group-term life insurance, and health savings accounts

“A cafeteria plan is a written plan that allows your employees to choose between receiving cash or taxable benefits, instead of certain qualified benefits.”

Employee Navigator Pricing

Employee Navigator

Primary source Verified Jul 20, 2026 Supports: Pricing is sold to brokers across Enhanced, Enhanced Plus, Elite and Platinum tiers; 834 EDI feeds priced at $0.45 per employee per month on Enhanced Plus and Elite and included at $0 on Platinum; every tier is quoted by contacting sales rather than published

“834 EDI Feeds: $0.45 PEPM... $0 PEPM for 834 EDI... Contact Sales.”

Ease Product Pricing

Ease

Primary source Verified Jul 20, 2026 Supports: Pro, Agency and Enterprise tiers priced by employee volume and agency user count rather than per employee per month; Modernize at $1 per employee per month for brokers to enable and $2 for employers; Measure ACA compliance at $6 per employee per form per year; payroll integrations typically $0 to $1

“$1 PEPM for brokers to enable and $2 PEPM for employers... $6 per employee per form per year... typically range from $0 to $1.50 PEPM.”

BambooHR Pricing

BambooHR

Primary source Verified Jul 20, 2026 Supports: Core at $10, Pro at $17 and Elite at $25 per employee per month; payroll and benefits administration sold as add-ons with a 15 percent discount when combined with any plan; flat pricing starting at $250 a month for companies with 25 or fewer employees

“Core: $10 USD per employee/month. Pro: $17 USD per employee/month. Elite: $25 USD per employee/month... Get a 15% discount when you combine Payroll and Benefits Administration with any plan... starting at $250 USD/mo.”

TriNet PEO Pricing

TriNet

Primary source Verified Jul 20, 2026 Supports: Flat per employee per month administrative fee rather than a percentage of payroll, covering payroll processing, payroll tax administration, HR expertise, benefits administration, workers compensation administration and platform access, with benefit premiums and payroll taxes billed separately; list

“Your company pays a flat monthly fee for each active worksite employee... payroll processing and payroll tax administration, HR expertise, benefits administration, workers' compensation administration, HR technology platform access, and employee onboarding tools.”

2025 Employer Health Benefits Survey

KFF

Independent Verified Jul 20, 2026 Supports: 2025 average annual premiums of $9,325 for single coverage and $26,993 for family coverage; 67 percent of covered workers overall in self-funded plans, including 27 percent at firms with 10 to 199 workers and 80 percent at larger firms; survey of 1,862 firms completing the full survey, fielded Janua

“Sixty-seven percent of covered workers... are enrolled in plans that are self-funded... including 27% of covered workers at firms with 10 to 199 workers and 80% at larger firms.”

Benefits Enrollment Software: 6 Best Platforms (2026)

HR Stack Solutions

Independent Verified Jul 20, 2026 Supports: Broker-licensed platforms are usually free to the employer because the broker holds the license; Employee Navigator is the platform most benefits brokers run behind the scenes; standalone platforms such as PlanSource and bswift quote per employee per month rather than publishing rates

“Employee Navigator is the platform most benefits brokers run behind the scenes... employers rarely pay for it directly, the broker licenses it... Broker-provided systems are usually free to the employer.”

Revision history

2 revisions since publication
v1.1 Reviewed and re-verified.
v1.0 Published after editorial review.