What Is Employee Benefits Management and Administration?

What is employee benefits administration?

Employee benefits administration is an organization’s way of managing its employee benefits program. For most companies, benefits administration is the HR department‘s responsibility. Larger corporations may even have HR employees exclusively dedicated to benefits administration and management. These benefits may include health, dental and disability insurance as well as retirement accounts, paid time off (PTO) and sick leave. 

Employee benefits administrators are responsible for discussing benefit options with the organization’s employees, overseeing open enrollment periods, ensuring benefits are accessible and troubleshooting any problems employees have with their benefits. [Related article: Human Resources Management Glossary: Key Terms HR Pros Should Know]

What is the role of an employee benefits administrator?

An employee benefits administrator has multiple responsibilities in executing and overseeing an organization’s benefits program. Here is a high-level overview of their core tasks.

Use HR software and employee benefits management tools to administer benefits.

Manually overseeing an entire corporate network of benefits can be complex for one HR person — or even one department. That’s why most larger companies — and even many smaller organizations — use HR software and employee benefits management tools to keep some or all of their benefits plans organized. These solutions, which you can learn more about below, provide benefits administrators with access to online dashboards, templates, enrollment portals and more. Many of these programs even allow you to automate workflows. By digitizing virtually all aspects of benefits management, administrators can be more efficient with their time and are less likely to make mistakes.

Train and counsel employees.

Benefits opportunities can be complicated and overwhelming for employees. They may have trouble understanding what their benefits are and how to use them properly. It’s the benefits administrator’s job to train employees on how to enroll, explain their benefit choices and discuss how to use them. Companies are doing their employees a disservice if each individual is left to choose their own benefits package without guidance or if staffers are assigned a package that isn’t customized. Administrators need to make sure team members comprehend their benefits and only pay for what they believe they’ll use.

Negotiate with vendors.

A competitive benefits package can motivate employees to join or stay with a company. Benefits administrators are responsible for getting the best possible premiums for their organization and their employees. Administrators listen to pitches from benefits providers and then negotiate the rates the company and its staff members pay. Cheaper rates can lead to lower costs for employees. From there, the benefits administrator and a representative from the organization’s leadership team make a contract with the vendor and work with them to provide employees with a new benefits package each year.

Monitor, analyze and review benefit and enrollment usage.

A benefits package isn’t set in stone. Administrators should audit which benefits are being used and which are not and adjust offerings accordingly. They should also seek feedback from employees about additional benefits they would like to see. Younger employees may want benefits like student loan repayment or comprehensive mental health coverage while older employees may focus on retirement savings options. Administrators should evaluate employees’ needs and adapt their benefits programs as necessary.

Ensure compliance with government regulations.

Your company’s employee benefits must comply with federal regulations, including the Affordable Care Act, Health Insurance Portability and Accountability Act, Family and Medical Leave Act and Consolidated Omnibus Budget Reconciliation Act. Each of these acts has its own requirements that benefits administrators must comply with and verify their company is regularly following.

What are the components of employee benefits administration?

There are five key components to administering employee benefits.

1. Pick the benefits your company wants to offer.

It’s up to the employee benefits administrator and the company’s leadership to determine which benefits to provide. Employees value benefits that provide them and their families flexibility and support. Today, the most popular benefits packages are a combination of traditional and voluntary benefits. Voluntary benefits are offered by employers but are mostly paid for by the employee. Most companies provide health care, dental and vision insurance, but some of the more popular additional options are student loan assistance and financial wellness planning.

2. Find benefits plans that balance cost with coverage.

Benefits administrators should look for plans that balance cost and coverage. On average, employers cover 70 percent of the cost of medical, dental and vision insurance plans, according to HR software company Arcoro. Bundled payment plans can save on costs as they combine pre- and post-procedural care into one negotiated price, resulting in cost savings for the organization.

3. Communicate to employees what the benefits package includes and when open enrollment is.

Benefits administrators should explain to employees what benefits are being offered and how to use them. It is also essential for administrators to tell employees when their open enrollment period is so they don’t miss their opportunity to sign up for benefits. This period usually differs for new hires vs. existing employees.

4. Manage benefits efficiently.

Once benefits administrators negotiate rates with vendors and set up the benefits program for employees, they should ensure the benefits are being used efficiently. This includes providing team members assistance during enrollment, auditing premium deductions and reconciling bills. An individual employee’s benefits package is idiosyncratic, making it time-consuming to manage one person’s terms, let alone an entire staff. This is why companies use HR software and benefits management tools to relieve some of the burden from administrators and HR departments.

5. Analyze and ask for feedback.

Benefits administrators should check in with employees regularly to see how their benefits are serving them. They should make sure the benefits are easy to use and that they provide the coverage promised. Between these conversations and internal analytics from HR software and employee benefits management tools, administrators can identify patterns and glean insights on how to improve plans for the following year.

What is the best HR software for administering and managing employee benefits?

The best way to offer and manage employee benefits is to use software that simplifies your administrator’s responsibilities. Here are four of the top HR software platforms ideal for benefits administration and more HR functions.

Rippling

Rippling is a leading HR solution and one of the easiest to set up. Businesses can install and implement the Rippling platform in just four weeks and once the system is fully online, the automated process to onboard new hires takes 90 seconds on average. The software’s approval automation tools and customizable features let managers and administrators oversee their employees’ benefits easily. Rippling can also integrate with over 500 applications, so this program likely works well with any previously adopted systems you may use. Learn more in our Rippling review.

GoCo

GoCo offers an easy way for administrators to create custom, streamlined onboarding processes. Standard onboarding components such as new hire packets, orientation and company training can all be implemented through GoCo. With a simplified onboarding process, HR departments can focus on their other responsibilities, such as administering benefits. Managing benefits plans is also easier through GoCo because administrators can access all necessary documents and information through one easy-to-use dashboard. Find out more in our GoCo review.

Gusto HR Software

Gusto is a comprehensive HR software. Its payroll features are intuitive and robust, offering full-service payroll processing, workers’ compensation administration, tax filing and payments, PTO management and rate changes. It also provides many employee benefits features. Through the software, administrators can make their employees’ insurance, reimbursement, retirement plans and other accounts customizable. Get all the details in our review of Gusto.

BambooHR

BambooHR is an intuitive HR software with a simple user interface. The program gives administrators the ability to track benefits, showing them which are being used and allows employees to easily access their plans and payment methods. See more in our review of BambooHR.

Skye Schooley contributed to this article.