Benefits Administration

What Is Employee Benefits Administration?

Employee benefits administration is the process of determining and managing the benefits offered to a company’s employees. HR departments or benefits administrators within an HR department are typically responsible for carrying out the process.

Benefits administration typically consists of the following steps:

Effective benefits administration can create a competitive advantage in attracting, hiring, and retaining top talent and cutting operational costs. When an organization analyzes the needs of its employees and chooses benefits to meet them, employees feel heard and appreciated, which can increase employee engagement.

Evaluating current benefits programs and industry trends as a part of the benefits administration process can also help companies save money by cutting underutilized programs and negotiating the best plans and rates possible.

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What Are Employee Benefits?

Employee benefits are given to employees in addition to their regular wages or salary. Employees may have to work a certain number of hours to qualify.

For many employees, benefits matter as much or more than their base pay. Our research found that 37% of employees value paid time off more than pay raises.

Common employee benefits include the following:

What Are the Most Common Benefits Administration Systems?

There are a wide variety of benefits administration systems available, with some offering full service throughout every step of the benefits administration process and some only covering certain areas. Here are the most common systems:

How to Choose Benefits Administration Software

Robust benefits administration software allows companies to streamline and personalize the benefits administration process. The goal is to simplify the work for the HR team, not add more red tape. BambooHR’s Benefits Administration software offers fast, accurate benefits administration to help all employees in a single interface.

4 Essential Steps in Benefits Administration

Step 1: Decide Which Employee Benefits to Offer

The benefits administration process begins with HR managers and executives determining what benefits to offer employees. This includes what kind of insurance coverage and retirement benefits are offered to employees, along with PTO policies.

Employee benefits administration should consider employees at various levels, including full-time, part-time, temporary, and contracted workers. Each employment type will likely be offered different benefits packages.

Step 2: Check Compliance

Those involved in the benefits administration process flow should ensure that benefits plans adhere to current federal regulations. This may involve regularly reviewing and checking the policies against government regulations, which may change over time.

The benefits administrator should ensure that information about pension and benefits plans is disclosed to employees consistent with the policies enforced by the Employee Benefits Security Administration, or EBSA.

Step 3: Educate Employees About Benefits

One of the most important steps in benefits administration is teaching employees what benefits are available and how to enroll in the company’s programs. For example, employees need to know about enrollment deadlines and when and how to add dependents. 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 can simplify enrollment and allow employees to track and learn about their benefits.

Step 4: Offer Regular Updates and Training

Consider holding regular training on company benefits packages to keep employees up-to-date and inform them of any changes. Many companies provide training and updates annually around open enrollment.

What Does a Benefits Manager Do?

A benefits manager—also known as a benefits administrator—is typically a member of the HR department charged with managing the benefits administration process. The benefits administrator is responsible for developing and managing the benefits program and selecting the right HR software and insurance policies for the organization.

The benefits administrator should be knowledgeable about federal guidelines governing health, retirement, and other benefits, and be aware of the business’s resources and employee needs.

Essential benefits administrator skills include:

Average Benefit Administrator Salary

If you’re thinking of hiring a benefits administrator, expect to pay an average annual salary of $62,000. Depending on skills and experience, the salary ranges from $47,000 to $68,000.

What Is the Employee Benefits Security Administration?

The Employee Benefits Security Administration (EBSA) is a federal government agency run under the Department of Labor 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 main purpose of the EBSA is to help employees understand their rights and work benefits. It protects the rights of employees to fair retirement and health benefits, and monitors inappropriate activities of pension and benefits plan managers. EBSA 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.

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