An Essential Guide to Employee Benefits Administration
Benefits administration is the creation and management of an employee benefits program. Typically, the team responsible for employee benefits administration is HR.
Managing benefits is key to retaining talent and ensuring that every employee gets the benefits they are entitled to from their workplace. Administering benefits is a difficult and complex process, as there are also several rules and regulations you must comply with to do so effectively.
In this guide, you will learn all about health benefits administration, including its benefits, importance, and steps for success.
What is Benefits Administration in HR?
If you’re trying to figure out what is benefits administration, the first step is to create a comprehensive entitlements program for your staff.
Benefits programs administration covers all employee benefits, including:
- Retirement accounts
- Paid time off
- Sick leave
- Parental leave
- Health insurance
Failing to manage your employee benefits program effectively could lead to gaps in coverage and staff not receiving the benefits they deserve.
Why is Effective Benefits Administration Important?
Employee benefits in HRM are an essential part of your organization. Understanding proper employee benefits administration and taking the time to invest in this aspect of your business provides several key advantages for both company and staff, including:
- Competitive Advantage – Top talent are increasingly demanding lucrative benefits. Effective benefits administration offers a competitive edge that can not only attract but also retain top talent.
- Reduce Operational Costs – Efficient management reduces the operational costs of your business. Over time, this could potentially save thousands of dollars.
- Improve Morale – When you meet the needs of your staff by providing them with the benefits they want, your team will feel appreciated, which enhances morale.
- Increase Employee Engagement – Part of employee benefits administration & management is to engage with employees. More employee engagement leads to a better standard of work and an overall superior team.
- Save Money – Cut underutilized programs by examining the programs that are less appreciated and less utilized. Invest more in the best plans and secure better rates for your employees.
Employee Benefits Administration: Steps to Success
Simply offering a benefit is not enough. It’s all about the process you have in place to constantly assess, evaluate, and secure great benefits for your staff.
Follow these steps to success to create a process that works for them.
Determine Which Benefits to Offer
The first step is to decide what your company is going to provide. Establishing a budget is the preliminary stage. All benefits must make financial sense. Remember, benefits are an investment in your team with an expected return.
Staff benefits management & administrators should engage with employees to get a sense of the benefits that matter to them most.
While health insurance, for example, is a priority for all American workers, different demographics will prioritize different benefits.
It is not uncommon for younger workers to prioritize more paid time off, whereas older workers may consider more sick pay to be of greater importance.
Widen this consultation process and ensure employees are at the heart of it.
Train Employees on Benefits
As part of the employee engagement process, you must take the time to train employees on the benefits that are available and how to enroll in your organization’s programs.
This includes showing them how to add any eligible dependents. They will also need to be trained on using their company insurance policy and what happens to their benefits, such as retirement accounts if they leave their current roles.
It is also vital to train them on the different benefits packages they are entitled to from your organization. For example, part-time employees are unlikely to have the same benefits as full-time employees.
Set aside a day to educate your team on the benefits available to them and how to leverage them.
Maintain Compliance with Federal Regulations
The Employee Benefits Security Administration (EBSA) is the government watchdog responsible for ensuring that benefits are administered to working Americans fairly. They are dedicated to helping employees understand benefits programs and the rights they have under those programs.
Government regulations change all the time, and administering benefits must be done in a manner that maintains compliance.
HR should have a policy in place to check for any changes in government rules and how to react accordingly.
Review Current Benefits Packages
Establishing a benefits program, educating employees, and ensuring ongoing compliance are the three major steps required in employee benefits administration.
This is a constantly evolving system that your organization must stay on top of as it changes.
Review your current benefits packages to see how utilized each program is, what your employees want and whether your benefits continue to make financial sense for the company.
HR must act as the conduit between management and employee. Good communication is essential to making this work.
Tips for Improving Benefits Administration
Open enrollment periods, new programs, and changing regulations are just some of the headaches HR faces. To streamline the way you manage company benefits, follow these tips:
- Go paperless to make the process more efficient
- Create an online system that allows employees to enroll and understand their benefits remotely
- Establish a clear benefits communication strategy
- Encourage employees to speak out when they are not happy with something and to make suggestions
- Consider adding non-traditional benefits, such as remote work opportunities, unlimited vacation days, and sabbaticals
Every company is unique, and every HR team is in a different place. Take an honest look at how the current system is working and where improvements can be made.
Managing employee benefit programs poses several challenges for companies. From deciding what benefits to offer to ensure that staff is aware of their options, HR teams must consider what is best for both management and employees.
What is clear is that healthcare is a top priority for working Americans. Show that you care about your employees and their welfare with a collaborative healthcare platform like Eden Health.
To learn more about Eden Health, request a free demo now.