Eddy’s HR Mavericks Encyclopedia
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Benefits Administration
How can you as an HR professional possibly stay on top of benefits? Are there specific benefits you should be offering or are required to offer? How do you know if your benefits are what your employees want? Read on to learn about benefits administration.
What Is Benefits Administration?
Benefits administration encompasses all administration of your company benefits, such as health insurance, retirement plans, workers’ compensation, life insurance and more. Benefits administration is planning, organizing, directing and facilitating the long term and day-to-day of all benefits within your organization.
Types of Employee Benefits
While the types of employee benefits can be limitless and specific to your organization, there are common employee benefits most organizations have. Let’s review those below.
- Medical insurance. Employers with 50 or more employees are required to offer group health insurance as a benefit to their employees, so this is a common benefit for most organizations.
- Dental and vision. While it is becoming more common to avoid additional vision insurance and add vision to your medical plan, organizations still prioritize vision and dental insurance for employees as a benefit.
- Retirement plans. Whether your company offers a substantial matching 401(k) retirement plan, a safe-harbor matching plan, or a smaller matching plan, a retirement plan is a common and almost expected employee benefit in today’s market.
- Life insurance. Often employers have life insurance policies lumped in with medical insurance, but if they do not, life insurance is a common additional policy for employees as long as they remain at the organization.
- Paid time off. An expected benefit in any organization is paid time away from work. Your organization can have a set amount of days/hours per year, or even the ever-trending unlimited time off, but this benefit is a common benefit for companies everywhere.
What Are the Responsibilities of Benefits Administration?
The responsibilities that fall under the umbrella of benefits administration can be extensive and overwhelming. Let’s break them down into actionable items to tackle one-by-one.
Enrollment and Eligibility Management
As employees transition through the employment life cycle at your organization from being hired, to training, to promotions, to five-year achievement awards, enrollment and eligibility management are the bulk of benefits administration. You’ll want to ensure benefits for eligible employees are administered accurately. If you have a health insurance broker, they can help in this process as well. Be sure you don’t miss any enrollment deadlines for your employees, no matter the benefit, and ensure you’re providing benefits to every employee in the timeline set in place for your organization. You can create a spreadsheet to track new hires, exiting employees and official eligibility and enrollment dates if your HRIS does not offer a way to track them.
Continual Communication and Education
Whether you’re switching plans with your open enrollment season or one of your employee-sponsored benefits has come out with changes, make sure your employees have the information they need. Additionally, be sure to educate employees at least once a year with your open enrollment on your specific benefits. Employees may understand as a whole what medical insurance is, but if your organization has a few options, take the time to educate employees on the difference. Don’t overlook this step, as education and communication is a great way to get employees involved in your company benefits.
Regulatory and Legal Requirements
There are legal and regulatory requirements surrounding most benefits. As stated previously, if you’re an employer with 50+ employees, you’re required to offer group medical insurance. With that insurance comes COBRA administration for all employees who leave your organization, and you won’t want to miss that requirement. If you don’t have an insurance broker, make connections that can help you within your HR network. Otherwise, keep a close eye on any changing ERISA laws that may impact the requirements of your organization’s benefits administration.
Claims and Appeals Administration
Depending on your specific benefit plan, this may not fall completely on you, but you’ll undoubtedly have a hand in claims and appeals for your employees under benefits administration. It may be as simple as pointing employees in the right direction and showing them how to file the claim or appeal, or it may fall completely on you to advocate and appeal the claims for your employees. Either way, when it comes to benefits administration, HR should be well versed on this aspect to ensure they can help their employees along the way.
Record-Keeping and Reporting
The fun part of benefits administration is performing plan audits, analyzing current benefits and reviewing long- and short-term cost estimates and evaluations to keep your reporting up to date. You’ll want to evaluate the effectiveness of your plans and the cost to your organization vs. the employee involvement accordingly. Take the time to keep continual records so that when it’s time to evaluate benefits annually, you have a few years to look back on. These can provide educated answers to questions about employee coverage, cost, plan experience, and industry trends. You’ll want both detailed and statistical data to keep you making the right benefit administration choices for your organization.
How to Implement a Benefits Administration System
Now that you’ve seen all that benefits administration owns, let’s look at how you can implement a system to help you with this major task.
Evaluate Need
As with most first steps, you’ll want to evaluate the need for an official benefit administration system for your organization. Consider things like the company size, the HR department size, the benefits offered, funds available, and if you do or do not have a broker for assistance. You’ll need all of those questions answered to establish the need for a benefits administration system.
Pick a Solution
If you decide that you do want to move forward with an additional system for benefits administration, it’s time to select accordingly. There are systems out there to help manage benefits administration programs through software integrations and automated functions, which can greatly reduce the load. Some systems are built into your HRIS and can be simply an additional module to add on and pay for monthly, while others can be provided through your broker at an additional cost. Consider things like ease of use for your employees and accessibility while considering the budget. Does it make sense to have it all in one place for your employees, or would a different system help set it apart from pay stubs and payroll? Take the time to consider this and move forward with the best option for your company.
Maintain Compliance
Maintaining compliance comes with all HR aspects, and benefits administration is no different. If you’ve selected a specific system that has integrations in place, they should verify compliance, but there’s nothing wrong with double checking. Take the time to verify that employees are receiving the necessary paperwork on time through the system you’ve selected and that eligibility requirements and termination requirements are being followed according to the plan documents and legal requirements. Don’t overlook the compliance aspect if you’ve onboarded a system to take some of the load off. It should still be evaluated for accuracy.
Evaluate Effectiveness
If you’re putting money into a system at your organization, you’ll likely need to prove its effectiveness to retain it consistently. Even if not, it’s a good practice to have in your HR toolbelt. Ensure you are able to effectively evaluate the positives the benefits administration system has brought to your organization to maintain it. Consider the cost of the program, the hours it frees up for you as the HR professional, the ease of use for employees and the ability to mitigate risk by automation. Keep this information on hand in case your organization starts to evaluate budgets and cost-saving mechanisms.
Tips for Measuring the Success of a Benefits Administration Program
There are a few key areas to focus on to evaluate your benefits administration. Let’s review them below.
Tip 1: Look Into Turnover
One of the most notable key performance indicators (KPIs) for your benefits administration program is turnover. Ensure you’re doing your exit interviews effectively and diving into the “why” behind employee turnover if there’s a spike in numbers. Employee benefits can be a common issue here. You may notice that your benefits are not as competitive for retaining talent as you had hoped, leading to an unsuccessful benefits administration program overall.
Tip 2: Note Increased Absences
An increase in absences should always be a red flag for your benefits administration program. The issue can range from employees taking time off to interview at other organizations with better pay or benefits packages, or for mental health due to poor employee wellbeing. Both fall under measuring the success of your benefits administration program. Be sure all employees feel valued, and if absences are stating otherwise, it’s a great way to assess the effectiveness of your program.
Tip 3: Assess Overall Engagement
Engagement can help you gauge the effectiveness of your benefits administration. If employees are not actively participating in your benefit plans, you could have an unsuccessful benefit administration program on your hands. If you hear that “the insurance through my spouse’s work is better so we are going to go with that,” or “the 401(k) matching program is not worth it to me as the match isn’t high enough,” it’s time to evaluate your benefits. These aren’t failures to the program, but helpful ways to evaluate the effectiveness in real time. You can see engagement during your open enrollment period, but don't forget to evaluate throughout the year as new hires are onboarded into your benefits administration as well.
Person, Not Profit
Lastly, remember to keep your eyes on the person, not the profit. While it makes sense to consider the cost of your benefits, this should not be the determining factor for every decision. Take into account the way these benefits are translated for employees and invest in them as a person. When it comes to benefit administration, that’s exactly what you’re doing: investing in your employees. While you may not see a profit, the return on investment is the satisfaction, retention and overall engagement from your team.
Topics
Shalie Reich
Shalie has over 4 years of experience working in a variety of HR positions and organizations including: working as an HR department "of one", working with a start-up based in Europe, to working in a fully established robust USA based HR department. Shalie has experience in multiple states and countries with all aspects of the HR spectrum. She has a passion to share her knowledge and experience to benefit the HR profession!
Frequently asked questions
Other Related Terms
Eddy’s HR Mavericks Encyclopedia
Benefits Administration
How can you as an HR professional possibly stay on top of benefits? Are there specific benefits you should be offering or are required to offer? How do you know if your benefits are what your employees want? Read on to learn about benefits administration.
What Is Benefits Administration?
Benefits administration encompasses all administration of your company benefits, such as health insurance, retirement plans, workers’ compensation, life insurance and more. Benefits administration is planning, organizing, directing and facilitating the long term and day-to-day of all benefits within your organization.
Types of Employee Benefits
While the types of employee benefits can be limitless and specific to your organization, there are common employee benefits most organizations have. Let’s review those below.
- Medical insurance. Employers with 50 or more employees are required to offer group health insurance as a benefit to their employees, so this is a common benefit for most organizations.
- Dental and vision. While it is becoming more common to avoid additional vision insurance and add vision to your medical plan, organizations still prioritize vision and dental insurance for employees as a benefit.
- Retirement plans. Whether your company offers a substantial matching 401(k) retirement plan, a safe-harbor matching plan, or a smaller matching plan, a retirement plan is a common and almost expected employee benefit in today’s market.
- Life insurance. Often employers have life insurance policies lumped in with medical insurance, but if they do not, life insurance is a common additional policy for employees as long as they remain at the organization.
- Paid time off. An expected benefit in any organization is paid time away from work. Your organization can have a set amount of days/hours per year, or even the ever-trending unlimited time off, but this benefit is a common benefit for companies everywhere.
What Are the Responsibilities of Benefits Administration?
The responsibilities that fall under the umbrella of benefits administration can be extensive and overwhelming. Let’s break them down into actionable items to tackle one-by-one.
Enrollment and Eligibility Management
As employees transition through the employment life cycle at your organization from being hired, to training, to promotions, to five-year achievement awards, enrollment and eligibility management are the bulk of benefits administration. You’ll want to ensure benefits for eligible employees are administered accurately. If you have a health insurance broker, they can help in this process as well. Be sure you don’t miss any enrollment deadlines for your employees, no matter the benefit, and ensure you’re providing benefits to every employee in the timeline set in place for your organization. You can create a spreadsheet to track new hires, exiting employees and official eligibility and enrollment dates if your HRIS does not offer a way to track them.
Continual Communication and Education
Whether you’re switching plans with your open enrollment season or one of your employee-sponsored benefits has come out with changes, make sure your employees have the information they need. Additionally, be sure to educate employees at least once a year with your open enrollment on your specific benefits. Employees may understand as a whole what medical insurance is, but if your organization has a few options, take the time to educate employees on the difference. Don’t overlook this step, as education and communication is a great way to get employees involved in your company benefits.
Regulatory and Legal Requirements
There are legal and regulatory requirements surrounding most benefits. As stated previously, if you’re an employer with 50+ employees, you’re required to offer group medical insurance. With that insurance comes COBRA administration for all employees who leave your organization, and you won’t want to miss that requirement. If you don’t have an insurance broker, make connections that can help you within your HR network. Otherwise, keep a close eye on any changing ERISA laws that may impact the requirements of your organization’s benefits administration.
Claims and Appeals Administration
Depending on your specific benefit plan, this may not fall completely on you, but you’ll undoubtedly have a hand in claims and appeals for your employees under benefits administration. It may be as simple as pointing employees in the right direction and showing them how to file the claim or appeal, or it may fall completely on you to advocate and appeal the claims for your employees. Either way, when it comes to benefits administration, HR should be well versed on this aspect to ensure they can help their employees along the way.
Record-Keeping and Reporting
The fun part of benefits administration is performing plan audits, analyzing current benefits and reviewing long- and short-term cost estimates and evaluations to keep your reporting up to date. You’ll want to evaluate the effectiveness of your plans and the cost to your organization vs. the employee involvement accordingly. Take the time to keep continual records so that when it’s time to evaluate benefits annually, you have a few years to look back on. These can provide educated answers to questions about employee coverage, cost, plan experience, and industry trends. You’ll want both detailed and statistical data to keep you making the right benefit administration choices for your organization.
How to Implement a Benefits Administration System
Now that you’ve seen all that benefits administration owns, let’s look at how you can implement a system to help you with this major task.
Evaluate Need
As with most first steps, you’ll want to evaluate the need for an official benefit administration system for your organization. Consider things like the company size, the HR department size, the benefits offered, funds available, and if you do or do not have a broker for assistance. You’ll need all of those questions answered to establish the need for a benefits administration system.
Pick a Solution
If you decide that you do want to move forward with an additional system for benefits administration, it’s time to select accordingly. There are systems out there to help manage benefits administration programs through software integrations and automated functions, which can greatly reduce the load. Some systems are built into your HRIS and can be simply an additional module to add on and pay for monthly, while others can be provided through your broker at an additional cost. Consider things like ease of use for your employees and accessibility while considering the budget. Does it make sense to have it all in one place for your employees, or would a different system help set it apart from pay stubs and payroll? Take the time to consider this and move forward with the best option for your company.
Maintain Compliance
Maintaining compliance comes with all HR aspects, and benefits administration is no different. If you’ve selected a specific system that has integrations in place, they should verify compliance, but there’s nothing wrong with double checking. Take the time to verify that employees are receiving the necessary paperwork on time through the system you’ve selected and that eligibility requirements and termination requirements are being followed according to the plan documents and legal requirements. Don’t overlook the compliance aspect if you’ve onboarded a system to take some of the load off. It should still be evaluated for accuracy.
Evaluate Effectiveness
If you’re putting money into a system at your organization, you’ll likely need to prove its effectiveness to retain it consistently. Even if not, it’s a good practice to have in your HR toolbelt. Ensure you are able to effectively evaluate the positives the benefits administration system has brought to your organization to maintain it. Consider the cost of the program, the hours it frees up for you as the HR professional, the ease of use for employees and the ability to mitigate risk by automation. Keep this information on hand in case your organization starts to evaluate budgets and cost-saving mechanisms.
Tips for Measuring the Success of a Benefits Administration Program
There are a few key areas to focus on to evaluate your benefits administration. Let’s review them below.
Tip 1: Look Into Turnover
One of the most notable key performance indicators (KPIs) for your benefits administration program is turnover. Ensure you’re doing your exit interviews effectively and diving into the “why” behind employee turnover if there’s a spike in numbers. Employee benefits can be a common issue here. You may notice that your benefits are not as competitive for retaining talent as you had hoped, leading to an unsuccessful benefits administration program overall.
Tip 2: Note Increased Absences
An increase in absences should always be a red flag for your benefits administration program. The issue can range from employees taking time off to interview at other organizations with better pay or benefits packages, or for mental health due to poor employee wellbeing. Both fall under measuring the success of your benefits administration program. Be sure all employees feel valued, and if absences are stating otherwise, it’s a great way to assess the effectiveness of your program.
Tip 3: Assess Overall Engagement
Engagement can help you gauge the effectiveness of your benefits administration. If employees are not actively participating in your benefit plans, you could have an unsuccessful benefit administration program on your hands. If you hear that “the insurance through my spouse’s work is better so we are going to go with that,” or “the 401(k) matching program is not worth it to me as the match isn’t high enough,” it’s time to evaluate your benefits. These aren’t failures to the program, but helpful ways to evaluate the effectiveness in real time. You can see engagement during your open enrollment period, but don't forget to evaluate throughout the year as new hires are onboarded into your benefits administration as well.
Person, Not Profit
Lastly, remember to keep your eyes on the person, not the profit. While it makes sense to consider the cost of your benefits, this should not be the determining factor for every decision. Take into account the way these benefits are translated for employees and invest in them as a person. When it comes to benefit administration, that’s exactly what you’re doing: investing in your employees. While you may not see a profit, the return on investment is the satisfaction, retention and overall engagement from your team.
Topics
Shalie Reich
Shalie has over 4 years of experience working in a variety of HR positions and organizations including: working as an HR department "of one", working with a start-up based in Europe, to working in a fully established robust USA based HR department. Shalie has experience in multiple states and countries with all aspects of the HR spectrum. She has a passion to share her knowledge and experience to benefit the HR profession!
Frequently asked questions
Other Related Terms
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