What is employee benefits administration?
Employee benefits administration involves creating, overseeing, and updating the employee benefits package your company offers. Most companies hire a benefits administrator to run the entire employee benefits administration process. Offering competitive benefits and perks helps your business attract and retain top employees.
A good employee benefits administration process helps the staff better understand the benefits offered to them as they enroll in the programs well-suited for their needs. Common benefit programs usually consist of the following perks and benefits:
• Health insurance
• Vacation time
• Paid time off
• 401(k)s and other retirement plans
• Parental leave
• Paid time off
Offering strong benefits to your employees shows them they are valued and appreciated for the work they contribute to your company. Working in an environment with competitive benefits plan often leads to long-term employees and a low turnover rate.
What is the Employee Benefits Security Administration?
The Employee Benefits Security Administration (EBSA) is a federal agency that requires employers to provide employees with packages that offer specific benefits, including pensions, health plans and retirement plans. They work to protect employees’ rights to these work benefits and help employees better understand their investments and plan coverages. The EBSA lays out certain federal guidelines and resources about benefit plan information that all companies in the private sector must follow.
What does the benefits administration process look like?
Carefully consider your options and budget when creating a competitive benefits package for your employees. Steps to building an effective benefits administration process include:
1. Research other companies’ benefits and compensation packages
Before compiling a strong benefits package for your team, conduct research on the type of benefits your employees would prefer and what other companies are offering. Build surveys for current employees asking what they want and need in a strong benefits package. Research competitors in your industry to learn what they currently offer employees to give you an idea of what potential candidates are looking for.
2. Determine your benefit and compensation package budget
Meet with your financial or tax advisor to determine a strong budget for your benefits package, if possible. Start with the basic benefits to offer employees like health insurance. From there, add in as many additional perks and benefits as your budget allows. Return to your budget at least every quarter as your company grows to see how much you should add or subtract and still maintain a competitive package.
3. Manage your benefits program effectively
Before administering your benefits plan, set an efficient process in place. Determine how tasks like onboarding employees, giving benefits training and tracking benefit usage will be completed to help you better manage the benefits administration process. Use tools like HR software to track benefits and employee information. Build a detailed onboarding and enrollment process each employee must follow when they start at the company.
Related: Setting Up Employee Benefit Packages: A Guide for Managers
4. Measure results and update your benefits package accordingly
Review your benefits package regularly to ensure it fits well within your budget and that it follows EBSA guidelines. Measure the results of your benefits package by sending out surveys to employees each year asking what they like about the plan you offer, and which benefits they’d like you to add. You can also get this information from exit interviews and job acceptance rates. Use this data to continue building competitive benefits plans.
What do employee benefits administrators do?
Employee benefits administrators are typically human resources employees in charge of updating staff members on their benefits packages. They usually design the company’s benefits programs and work with insurance and retirement plan providers to find plans that fit within the company’s budget and provide value to employees.
Other responsibilities include onboarding employees, training employees on the benefits available to them, assisting employees in enrolling in the best plan for them and answering any questions employees have about their benefits.