Comprehensive benefit plans can improve your business, demonstrating to existing staff that you value them and enticing prospective employees to join your team. Creating a suite of employee benefits can be a huge undertaking, so having a benefits administrator and human resources software to handle employee benefits management is vital. Below is a guide to benefits administration, how it fits into a company, and some of the best employee benefits management software.
What is benefits administration?
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, disability, retirement accounts, paid time off and sick leave. Employee benefit administrators are responsible for discussing these options with the organization’s employees, overseeing open enrollment periods, ensuring benefits are accessible, and troubleshooting any problems employees have with their benefits. [Read related article: Human Resources Management Glossary: Key Terms HR Pros Should Know]
What is the role of a benefits administrator?
An employee benefits administrator has multiple responsibilities in directing and planning the organization’s benefits program.
Research the best employee benefits management software.
Manually overseeing an entire corporate network of benefits can be complex for one person – or even one department. That’s why most larger companies use employee benefits management software to keep some or all of their benefits plans organized. Benefits administrators should research the different types of software to see which option would work best for their company and the benefits it offers. They should prioritize what their company needs, then assess software based on cost, features and the number of employees it will manage.
Train and counsel employees.
Benefits 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 how to enroll, explain their benefit choices, and discuss how to use them. Companies fail their employees if each individual is left to choose their own packages without guidance, or if they are assigned a benefits package that isn’t customized. Administrators need to make sure employees 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 rates for their company, and subsequently, their employees. Administrators listen to pitches from benefits providers and then negotiate the rates the company pays. 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 a vendor and work with them to provide employees a refreshed benefits package.
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. They should also seek feedback from employees about additional benefits they would like to see. Younger employees may want benefits such as 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.
Did you know? One benefit that’s growing in importance for employees of all ages is employee assistance program (EAP) access. These programs offer employees confidential help with various issues, including stress management, domestic violence and alcoholism.
Ensure compliance with government regulations.
Employee benefits must comply with federal regulations, including the Affordable Care Act (ACA), Health Insurance Portability and Accountability Act (HIPAA), Family and Medical Leave Act (FMLA) and Consolidated Omnibus Budget Reconciliation Act (COBRA). Each of these acts has its own requirements that administrators must comply with and verify their company is regularly following.
What are the components of employee benefits administration?
Pick the benefits you want to offer.
Employees value benefits that offer 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 alternative inclusions are student loan assistance and financial wellness planning.
FYI: It is critical to create a benefits package that appeals to employees. The best plans combine robust benefit offerings for a low cost. While offering great benefits is valuable, that value loses steam if employees pay high out-of-pocket costs to access their benefits.
Find a plan that balances cost with coverage.
Administrators should look for plans that balance cost and coverage. On average, employers cover 70% of the cost of medical, dental and vision insurance plans. 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.
Communicate to employees what the benefits package includes and when open enrollment is.
Administrators should explain to their employees what benefits are offered and how to use them. It is also important for administrators to tell employees when their open enrollment period is so they don’t miss their opportunity to sign up for benefits.
Manage benefits efficiently.
Once administrators negotiate rates with vendors and set up the benefits program for their employees, they should ensure the benefits are being used efficiently. This includes showing support during enrollment, auditing deductions and reconciling bills. An individual employee’s benefits package is idiosyncratic, making it time-consuming to manage one person, let alone an entire staff. This is why companies use benefits management software to relieve some of this burden from HR departments.
Analyze and ask for feedback.
Administrators should check in with their employees regularly to see how their benefits are serving them. They should make sure that the benefits are easy to use and that they provide the coverage promised. Between these conversations, and internal analytics from employee benefits management software, administrators can identify patterns and glean insights on how to improve plans for the following year.
How do you offer and manage employee benefits?
The best way to offer and manage employee benefits is to use software that simplifies human resources responsibilities. Here are four of the top HR software platforms for various needs businesses may have:
Rippling is a top HR solution and one of the easiest to implement. One of its most impressive features is the simplicity of setting up the software. Businesses can install and implement Rippling within just four weeks, and once it’s 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 easily oversee their employees’ benefits. It can also integrate with over 400 applications, so it can work well with any previously adopted systems. Learn more in our Rippling review.
GoCo offers an easy way to design custom workflows. It allows 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. It can even organize offboarding checklists such as travel, promotion requests, interviews, employee surveys and expense reports.
With GoCo’s 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. Learn more in our GoCo review.
Gusto HR Software
Many types of HR software have a per-employee fee. For small businesses, this means the cost of using them can prove to be too much. Gusto is the best HR software choice for small businesses. Its payroll features are intuitive and robust, offering full-service payroll processing, workers’ compensation administration, tax filing and payments, PTO management, and rate changes.
Gusto offers many options for employee benefits features. Through the software, administrators can make their employees’ insurance, reimbursement, retirement plans and other accounts customizable. Learn more in our review of Gusto HR Software.
BambooHR is the best software for companies that prioritize employee performance management. It lets managers track employee goals, give peer feedback, and create employee and company performance reports. Its options let managers create custom performance evaluations.
The software also gives administrators the ability to track benefits, showing them which benefits are being used, and allows employees to easily access their plans and payment methods. Learn more in our review of BambooHR.