Benefits Administration
Benefits Administration
What is Benefits Administration?
Benefits Administration is the process and one of the important roles of the human resources department to create and manage benefits packages for employees. Benefits can be internal, such as discounts or free company goods and services, or external benefits like health insurance, house insurance, and fitness plans.
The benefits administration programs management typically encompasses the benefits included as per the employee benefits package. Under such packages, the benefits offered are such as health insurance, disability, life insurance, individual employees’ retirement account, 401 (k), Flexi spending accounts, wellness plans, vacation leave, paid time off, sick leave, parental leave, etc.
What does the benefits administrator do?
The Benefits Administrator manages benefits admin and is considered an important part of your HR department. The role of the benefits administrator in your organization is: “managing employee benefits”. In the benefits administration process, the duties of a benefits administrator are as per mentioned below, but are not limited to:
- Assessing the worth of current benefits packages
- Interacting with new benefit vendors
- Choosing competitive benefits
- Informing workers about the available benefits and perks
- Assisting workers in enrolling in these initiatives
- Evaluating all workers and benefits details
- Training employees (staff reporting to Administrator) on benefits admin management
- Ensure that all applicable government rules regarding benefits are followed, like 401(K)
What is Employee Benefits Administration?
It refers to the process of identifying and handling the perks and advantages provided to workers. Workers' eligibility for benefits such as medical, disability, pension plans, holidays, paid time off, sick leave, maternity, and paternity leaves, is normally determined by the benefits administration system. Several companies use it as a strategic advantage in attracting, recruiting, and retention of talented employees, and also reducing operational expenses.
How to Increase Retention Rate with Employee Benefits Administration?
If a company provides a good package and benefits to its employees than competitors, the employees get attracted to remain with the organization and they rarely think of switching their job. Moreover, it also creates a good image of the company in the industry.
What are the Advantages of Employee benefits to employees?
Following are the advantages of employee benefits to employees:
- Insurance of health
- Paid-time-off
- Flexi schedule
- Plans for retiring employees
- Sharing of Profits
- Maternal and Paternal leaves
- Professional development
- On-the-site memberships like gym etc.
- Loans assistance
- Edibles and drinkables
- Reimbursement of transportation
- Pets-friendly office space
- Any other as per requirements and feasibility analysis to retain your competent workforce
What are the Advantages of Employee benefits to the employers?
Following are the advantages of employee benefits to the employers:
- Top talent recruitment from the market
- Decrease HR Turnover
- Lowering insurance costs
- Productivity enhancement
- Competitive Advantage
- Enhanced employee morale
- Improved employee engagement
- Performance improvement tool
What should you take care of, for benefits administration, being an employer?
Being an employer, you should take care of the following things for managing the benefits administration or effective benefits administration:
- Look into the very requirements of the laws concerning benefits administration
- Establishment of a budget for compensation
- Opt for complimentary benefits
- Define additional benefits, if any
What knowledge dominion you should possess for the benefits administration program?
Your benefits administration program operating staff should know the following area domains for running the said program successfully:
Legal aspects
Rules and regulations governing the benefits admin (Medicare, social security, retirement, etc.); to have the updated knowledge of government regulations on such programs.
Research ability
R&D skills are a necessary prerequisite for such programs for knowing what is happening in the industry - where, how, why, and when… (W’s of the business world).
Technological requirements
High-tech advancements are known for developmental purposes and usage of the software etc.
Other skills
Other skills such as communication skills, negotiation abilities (with vendors like insurance, etc.); and teamwork, your employees should be well versed in the said.
Nevertheless, your employees operating the benefits administration program must have an idea of your employees’ very needs so that to possibly match the benefits accordingly. Be reminded that the benefits administration is one of the key tools for competent worker retention (say, HR Retention).
What is Employee Benefits Security Administration (EBSA)?
The Employee Benefits Security Administration (EBSA) was established in 1970.
- EBSA is the legal body under the US Department of Labor (DoL) as an enforcing administrator for ERISA – Employee Retirement Security Act – of 1974.
- While ERISA is the federal law that issues standards for implementation concerning the US workers’ retirement plans and regulations regarding fiduciary requirements.
- As of the last year (2021), EBSA looks after 700K+ retirement plans, and 2.5M health plans; and that is near USD 11 Trillion.
[Ref. U.S. Department of Labor. "U.S. Department of Labor Restores Over $3.1 Billion to Employee Benefit Plans, Participants, and Beneficiaries, the Most Ever.]
What are the responsibilities of EBSA?
The EBSA responsibilities include as appended below:
- Enforcement of the regulations governing the conduct of plan managers
- Administering the looking into very investment plans of the assets
- Monitoring of the reporting and disclosure of plan information
- Observing the Fiduciary provision as per law
- Supervising of benefit rights of the workers
To wrap up, the EBSA works as the watchdog for plan managers to ensure the security of funds of the US workers’ retirement plans.
What is the organizational structure of the Employee Benefits Security Administration (EBSA)?
The organizational structure of the Employee Benefits Security Administration (EBSA) consists of dozens of its regional as well as district field offices across the United States.
These offices administer and manage investigations into the ERISA violations, handle the concerns of the public, and deal with the questions of pension plan administrators.
EBSA has networking of eight program offices:
Exemption Determination Office
The office deals in the processing of the requests for exemptions from ERISA prohibition transaction provision.
Enforcement Office
This office of EBSA administers the EBSA enforcement programs.
Health Plan Standards and Compliance Assistance Office
The office manages the provision of regulations and rules interpretation guidance about health-related plans. Moreover, it also educates and provides technical support to government agencies and the persons dealing with the health plan.
Regulations and Interpretation Office
EBSA’s this office conducts EBSA regulation agenda and rules interpretation help. The office devises and carries out the analysis and ensures the implementation of pension and healthcare policy matters by the provision of assistance and technical support to the stakeholders.
Education, Assistance, and Outreach Office
This office has three works to do as its name suggests. First, it educates the plan managers and staff to provide answers to the stakeholders. Second, it supports and assists regional offices. And the third, it works on the outreach procedural code of conduct and policies.
Chief Accountant Office
The office of the chief accountant issues annual reports and audit requirements for the employee benefits plans. This office also deals in the issuance of the civil penalties against the plan administrators whose annual report is rejected.
Technology and Information Service Office
This office of the EBSA: Tech and Info-service delivers computer-based services and support to EBSA staff nationwide.
Program, Planning, Evaluation, and Management, Office
The office of EBSA administers advisory and looks after the EBSA Policy. It plans, programs, manages, and evaluates the EBSA Policy. This also works upon the strategic planning, financial management, budgeting, HR, and admin programs.
How to enhance employee benefits administration?
We at WebHR do take care of our clientele and readers, therefore for the betterment of strategies and the recommendations for enhancing employee benefits administration, you should apply the following suggestions:
- Reduce errors on payroll
- Detailed record keeping be ensured
- Make the benefits programs available online by opting for the benefits administration software
- Communicate the benefits admin program advantages with clarity
- Offer employees open enrollments for all (employees: experienced, recruits, full time, etc.)
- Consider sabbaticals, remote working options, and other traditional benefits or relaxations, for attracting from the market and retaining top talent with you
- Make a win-win situation (beneficial for both stakeholder partners: you and your employees)
- Have customized hr software that is user-friendly (like WebHR)
Related: Employee Benefits, Employee Benefits Administration, Fringe Benefits, Affordable Care Act (ACA).