An employee benefits administration (EBA) is a department within a company that is tasked with overseeing benefits packages offered to employees. This department creates and updates all available employee benefits packages.
Corporations are incentivized to employ a benefits administration to ensure that their employee benefits program is attractive to potential employees and valued by current employees.
Offering competitive benefits and bonuses will attract and retain valuable employees.
The employee benefits administration can also be a useful tool in educating employees about the full benefits available to them. This includes directing staff members to enroll in special programs for which they may be eligible.
Benefit programs typically include:
- Health insurance
- Pensions plans
- Investment matching
- Vacation Days
- Maternity/Paternity Leave
Offering these benefits to employees promotes higher employee morale and increases employee retention rates. Employees who receive these benefits are more likely to feel valued and respected by their company.
What is the Employee Benefits Security Administration?
The Employee Benefits Security Administration (EBSA) is a federal agency that regulates the creation and management of employee benefits packages.
The national organization requires all eligible companies to provide employees with benefits packages specifically outlined by the organization. These benefits include insurance plans, retirement savings contributions, and other non-monetary bonuses.
The agency is dedicated to promoting the proper treatment of employees and securing employee rights for hard-working citizens across America. Many of these benefits involve setting up and funding retirement accounts which will provide security for workers in their old age. This is incredibly impactful; not only for the employees granted this security but for their friends and family as well.
How Does a Benefits Administration Work?
The most important task of a company’s benefits administration is to create the benefits package that will be offered to all employees of the company. To craft this package, the department goes through s procedure to consider all available options and make the choice best suited for the company at hand. The most common procedure utilized by these organizations is described below.
1. Research Your Competition
The first step to creating an attractive benefits package is to study your competition. Within your industry, you are competing with other companies for the best talent. It is in the company’s best interest to offer the best benefits without blowing the budget.
During this research, pay attention to what employees in this industry are saying about their benefits. Some benefits are valued more highly than others and it is largely subjective. Many factors can play into what employees prioritize. These factors can include cultural influence, political leaning, or tax bracket.
2. Set Your Budget
Once you have determined the industry standard for benefits packages, you can then determine a reasonable budget. Begin with the bare minimum package that would be somewhat acceptable. From there you can add more benefits, starting with those that are the most popular in your region or industry.
During this step, contacting a financial advisor as well as a tax consultant can be very productive. There is a great deal of nuance within tax codes that could make or break your benefits package plan.
3. Manage the Program
Before launching your new benefits package plan, it is important to determine how you will manage the plan moving into the future. During this step, the benefits administration should be drafting various procedures to accommodate the company’s growth and the growing pains that follow.
The bulk of this process is to plan for onboarding employees. New employees must be educated on the full extent of their benefits, as well as be offered assistance in setting up various investment accounts. It is imperative to create a comprehensive onboarding and enrollment process for all new hires.
Furthermore, ensuring that benefit usage is properly tracked by the company is extremely important. With this insight, and effective benefits administration can understand what programs are most helpful to employees and which are being underutilized.
Tracking benefit usage is most efficient when using software specifically designed to do just that. There are many legitimate options to choose from when looking for easy-to-use tracking software.
4. Analyze & Update Regularly
To ensure that your benefits packages stay up to date and effective requires consistent management. Critical analysis of your benefits packages and onboarding processes will help you to correct errors and improve your business.
Be sure to review your benefits packages especially in times of growth or shrinkage. The budget that is initially determined will most likely change as time passes and this should be addressed promptly.
ESBA guidelines differ among companies based on various factors such as the number of employees. As the company grows or downsizes, EBSA guidelines for your company may be altered.
5. Request Feedback
The easiest (and arguably most effective) way to gauge how well-received your benefits package may be, is to send out surveys for employees to provide feedback.
This should be done every year to account for new employees, and shifts in attitude. In these surveys, it can be very informative to ask what your employees like most about their benefits and what benefits they’d like to add.
Performing exit interviews and inquiring about their opinion towards their benefits package can also be very useful. This feedback along with what is acquired from regular surveys can help to create the most competitive benefits plans possible.
What is an Employee Benefits Administrator?
Employee benefits administrators are employees within the human resources department of a company that is tasked with creating and managing non-monetary benefits packages. These packages are then offered to all employees of the company.
Employee benefits administrators assume the responsibility of determining the benefits package that will be granted to themselves and their co-workers. In doing so, they often work with insurance agencies, retirement plan providers, tax consultants, and financial advisors to find the best fit for their company.
Other responsibilities of this department include managing onboarding processes, educating employees on their benefits, and assisting them in enrolling for the various programs available to them.