Benefits administration is the process of managing and overseeing employee benefits within an organization. This involves coordinating and handling benefits programs like health insurance and retirement plans. Human resources (HR) departments typically manage these tasks and ensure that employees understand their benefits and that all programs follow relevant regulations, like the Affordable Care Act.
Effective benefits administration supports employee satisfaction and retention by addressing their needs and providing valuable resources.
What is an employee benefits administration program?
An employee benefits administration program manages and oversees the various benefits offered to employees, including health insurance, retirement plans, and paid time off (PTO). HR typically sets up, maintains, and expands these programs to meet employee needs. HR professionals assess the workforce's needs, select appropriate benefits, and negotiate with providers to offer the best options.
HR also streamlines the benefits process so it’s easier for employees to understand and access their benefits. It updates employees about their benefits, handles enrollment processes, and addresses any issues that arise. HR may evaluate and expand benefits programs to adapt to changing employee needs and market trends.
Core functions of an employee benefit administration program include:
- Onboarding new employees into their benefits programs and giving them benefits information
- Managing benefits enrollment, benefits changes, and open enrollment periods
- Communicating benefits options and updates to employees
- Coordinating with benefits providers
- Handling employee inquiries and issues
- Maintaining accurate benefits records
- Conducting regular benefits evaluations and updates
- Developing and implementing new benefits plans
Types of employee benefits
Employee benefits include traditional and nontraditional offerings designed to help employees and attract and retain top talent. Traditional benefits focus on fundamental health and financial security, while nontraditional benefits address lifestyle and personal well-being.
Traditional benefits
- Medical, dental, and vision insurance to cover healthcare needs
- Life insurance to provide financial protection for employees' families
- Retirement accounts such as 401(k) plans and pensions to support long-term financial goals
- Flexible spending accounts and health savings accounts so employees can save pre-tax funds for medical and dependent care expenses
- Disability insurance, which provides income protection in case of illness or injury
- PTO for vacation, sick leave, and holidays
Non-traditional benefits
- Wellness programs, such as initiatives promoting physical and mental health
- In-kind benefits like company-provided goods or gym memberships
- Charity matching, where the company matches employee donations to charitable organizations
- Flexible work arrangements, including remote work, flexible hours, and compressed workweeks
- Professional development like training programs, tuition reimbursement, and career coaching
- Perks such as commuter benefits and other recreational activities
What are international benefits administrators?
International benefits administrators are professionals who manage and oversee employee benefits management for companies operating in multiple countries. They may provide this service as part of a professional employer organization (PEO).
These administrators ensure the company’s benefits programs comply with local regulations and meet the needs of employees in different regions. They manage health care plans, coordinate with local benefits providers, and streamline benefits enrollment processes. They can also handle payroll integration so employees’ paychecks accurately reflect benefits deductions. With this type of benefits administration outsourcing, a company’s internal HR team can focus on other core functions.
Typical functions of international benefits administrators include:
- Designing and implementing global benefits programs
- Managing health benefits and retirement plans across different countries
- Maintaining compliance with local labor laws and regulations
- Coordinating with local benefits providers
- Handling benefits enrollment and changes
- Providing support and communication to employees regarding their benefits
- Handling integrations with global payroll systems, benefits administration software, and other HR software
What is the role of the Employee Benefits Security Administration?
The Employee Benefits Security Administration (EBSA) is a division of the U.S. Department of Labor that regulates and oversees employee benefits. The EBSA makes sure that workers receive the benefits the law entitles them to, like health plans, retirement accounts, and other welfare benefits packages. This agency sets standards for eligibility and fiduciary responsibilities to protect full-time employees and part-time workers.
The EBSA also plays an educational and protective role for workers and organizations. It provides resources and guidance on benefits administration services so that employers, including small businesses, understand their obligations and how to comply with regulations. EBSA offers workers information on their rights and how to claim benefits. Additionally, EBSA conducts investigations and enforcement actions to protect employees from benefits mismanagement and fraud. It enforces fair and transparent practices in benefits administration.
What are the top benefits administration systems?
Benefit administration systems streamline employee benefits management, automate processes, and provide self-service options for employees. These systems can take various forms depending on scope and employer location. When companies find the best system to meet their needs, they can optimize their human capital management (HCM) practices.
Employer of record
An employer of record (EOR) is a third-party organization that manages employment-related tasks and is also the employees' legal employer.
- Benefits: EORs manage all aspects of employee benefits, including compliance, payroll, and benefits administration services. This can reduce costs per hire and time to hire by offloading administrative burdens from the company.
- Disadvantages: Relying on an EOR can be expensive, and companies may have less control over the specifics of their benefits programs.
Benefits administration software
- Benefits: These platforms automate benefits management, provide self-service apps for employees, and integrate with HCM systems. They can significantly reduce administrative workload.
- Disadvantages: These systems' initial setup and ongoing maintenance can be costly. Additionally, companies must train or find employee training so everyone uses the software correctly and efficiently.
In-house HR departments
- Benefits: Managing benefits internally allows companies to maintain direct control over their programs. In-house HR can tailor benefits to better meet employee needs and organizational goals.
- Disadvantages: This approach can be resource-intensive because it requires a dedicated HR team and ongoing investment in training and technology.
Payroll and benefits administration requires considerable attention and ongoing administrative effort. Whether it’s basic payroll management or full-scale benefits administration with accounting services, we’ve got you covered. Customize Revelo’s payroll solutions to fit your needs.
