An HR Glossary for HR Terms
Glossary of Human Resources Management and Employee Benefit Terms
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:
- 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
- Reviewing and updating employee and benefits information
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:
- Health, dental, and vision insurance
- Disability and long-term care insurance
- Retirement accounts and 401k contributions
- Paid time off
- Parental leave
- Mental healthcare
- Paid volunteer hours
- Commuter benefits
- Tuition reimbursement
- Childcare stipends
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:
- A Professional Employment Organization or PEO is a third-party provider that can supplement part or all of an internal HR department. PEOs are often used by startups or smaller companies that don’t have the resources to hire an internal benefits administrator.
- Payroll admin software syncs employee data to a payroll system to ensure your data is accurate, especially around who qualifies for benefits and how much is taken out of their paychecks to cover benefits. Small and medium-sized businesses use payroll admin software to streamline their HR and benefits processes.
- Benefits administration software is a complete platform that covers the entire benefits process and keeps accurate records for each employee. These systems are used by medium and larger companies but can also be personalized for companies of all sizes.
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:
- Research capabilities
- Ability to understand legal requirements
- Familiarity with relevant software and technology
- Ability to train employees and explain difficult concepts
- Negotiation expertise
- Excellent communication
Average Benefit Administrator Salary
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.
» Learn more: BambooHR’s Benefits Administration Software
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