An HR Glossary for HR Terms

Glossary of Human Resources Management and Employee Benefit Terms

Employee Benefits Administration

What is Employee Benefits Administration?

Employee benefits administration means determining and managing of benefits offered to the employees at a company. Benefit administration systems generally determine which benefits employees qualify for, including health, dental, disability, retirement accounts and 401K, vacations and paid time off, sick leave, and parental leave. The benefits administration process is typically the responsibility of an organization’s human resources department.

This process typically consists of the following steps: evaluating the value of current benefits programs, communicating with benefits suppliers, selecting competitive benefits, educating employees on what benefits are offered, helping employees enroll in benefits programs, and reviewing and updating both employee and benefits information. Benefits administration is usually one of the essential functions of an HR department or a benefits administrator within an HR department.

Effective benefits administration can serve as a competitive advantage for many organizations in attracting, hiring, and retaining top talent, as well as cutting operational costs. When an organization analyzes the needs of its employees and chooses benefits to meet those needs, employees often feel heard and appreciated, which can increase employee engagement. Likewise, candidates are often more likely to apply at and work for an organization that has competitive and meaningful employee benefits. Finally, evaluating current benefits programs and industry trends as a part of the benefits administration process can help an organization save money by cutting underutilized programs and negotiating for the best plans and rates.

What is the Employee Benefits Security Administration?

The Employee Benefits Security Administration (EBSA) is a federal government agency that protects, provides information about, and promotes employer-sponsored benefits packages in the private sector. These protected benefits include retirement, pension, and health plans. The EBSA runs under the United States Department of Labor.

What does the Employee Benefits Security Administration do?

The main purpose of the Employee Benefits Security Administration (EBSA) is to help employees understand their rights and work benefits. It is essentially a watchdog agency that protects the rights of employees to fair retirement and health benefits and monitors inappropriate activities of pension and benefits plan managers. ESBA enforces rules and regulations that govern benefits plan managers, the investment of benefits plan assets, the reporting of benefits plan information and worker benefits rights.

EBSA helps working Americans take full advantages of the benefits offered them and provides assistance in helping them understand their plan coverage and investments. All private sector benefits and pension plans in the United States must adhere to certain guidelines, particularly regarding disclosing plan information. EBSA helps American workers obtain their plan information and instigates legal action against managers who don’t adhere to the federal guidelines.

Steps in Benefits Administration

The benefits administration process flow begins with HR managers and relevant executives determining what kinds of benefits will be offered to employees. This includes what kind of insurance coverage is offered to employees at what levels, along with what retirement benefits are offered, and PTO policies. Employee benefits administration should take into account employees at various levels, including full time, part time, temporary, and contracted. Each employment type will likely offer different benefits packages.

Those involved in the benefits administration process flow should ensure that benefits plans conform to current federal regulations. This may involve regularly reviewing the policies and checking them against government regulations, which may change over time. The benefits administrator will make sure that information about pension and benefits plans are disclosed to employees in a manner consistent with the policies enforced by EBSA.

One of the most important steps in benefits administration is training employees in what benefits are available and how to enroll in the company programs. Employees need to know about enrollment deadlines and when and how to add a dependant. They also need to know how to access their insurance and what happens to their retirement accounts after leaving the organization.

Using a software-based program will make enrollment simpler and allow employees to track and read about their benefits. Consider doing an annual training on company benefits packages to keep employees up-to-date and inform them of any changes.

What is the Role of a Benefits Administrator?

The benefits administrator is typically a human resources professional within the organization charged with managing the benefits administration process. The benefits administrator should be knowledgeable about federal guidelines governing health, retirement, and other benefits. Additionally, he or she should be aware of the business’s resources and employee needs. The benefits administrator will be in charge of developing and managing the benefits program, and selecting the right HR software and insurance policies for the organization, among other duties.

Essential benefits administrator skills include research, ability to understand legal requirements, familiarity with relevant software and technology, and the ability to train employees and explain difficult concepts. The benefits administrator will also need to be skilled in negotiation, communication, and teamwork, which will be useful in working with insurance companies and software vendors.

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