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5 Steps to Effective Employee Benefits Administration

Employee benefits shouldn’t be an afterthought — they’re key to attracting and retaining top talent at your organization. But many companies offer traditional benefit plans that are too rigid, too limited, or too analog to appeal to modern employees.

By developing an employee benefits program with competitive perks — and using digital HR tools to administer it — you can increase employee satisfaction at your organization while reducing the workload for your human resources department.

Here’s what HR teams need to know about employee benefits administration, and how you can use automation to streamline the benefits administration process.

What Is Employee Benefits Administration?

Employee benefits administration, or benefits management, is the process of providing health insurance and other key benefits to employees. This often occurs within the HR department and is overseen by a dedicated benefits administrator, but you can also outsource these HR functions to a third party.

The employee benefits administrator is responsible for:

  • Developing a benefits program
  • Coordinating with benefits providers
  • Facilitating employee enrollment
  • Assessing eligibility for benefits

Some of the most common types of benefits include:

Some plans may even offer fringe benefits, such as commuter benefits or pet insurance. Commuter benefits are required by law in some cities and states, and cover some or all of the cost of carpooling, using public transportation, or bicycling.

Developing an employee benefits plan, enrolling new employees and their dependents, and determining eligibility for benefits can be complicated. Instead of outsourcing, you can use benefits administration software to streamline the process and make it easier for employees to enroll in and access benefits.

Why Employee Benefits Administration Matters

Some types of benefits are required by law, such as workers’ compensation insurance, and the right to take leave under the Family and Medical Leave Act (FMLA). But what about other types of benefits? Do you really need to offer additional perks beyond a retirement savings plan and health care coverage?

Here are three reasons why offering a desirable employee benefits package matters more than you might think:

Increased Employee Satisfaction

First, a strong employee benefits program increases employee satisfaction and reduces turnover. Employees who feel supported and cared for by their employer are more likely to stay in their jobs. By meeting your employees’ needs for health care or paid parental leave, you’ll contribute to reduced stress and a better work-life balance.

More Effective Recruitment

An appealing benefits plan can also help attract new employees to your organization. In addition to comprehensive health benefits — including vision and dental — employees may expect paid vacation time or the ability to work remotely.

Of course, the key is to provide benefits that employees actually want and make use of, not just those that sound good on paper.

Lower Operational Costs

Finally, a well-managed benefits plan can save your organization money, both through reduced recruitment costs and by mitigating the risk of burnout and absenteeism. Some types of benefits may also provide tax advantages, such as flexible spending accounts, which are used to set money aside for health care or childcare expenses. 

Providing more benefits while reducing operational costs and taxable income can save your organization money and help employees financially.

How to Manage Employee Benefits Effectively

Employee benefits administration: employee holding a tablet while writing on a document

Managing employee benefits is an ongoing process that requires a bit of planning and research. Follow these five steps to ensure the best possible outcome.

1. Research and Compare

If you don’t have an employee benefits program yet, start by determining what it is that employees in your industry want and what comparable companies are offering. In order to attract and retain talent, you’ll need to stand out from your competitors, so don’t rely on a salary alone to appeal to prospective employees.

Also, consider the demographics of your workforce. Young employees who don’t have dependents may be less interested in a health plan that covers family members. That’s one reason why companies like JetBlue and Starbucks started tuition reimbursement programs: to provide a clear benefit to younger employees.

One solution is to offer a personalized benefits program that allows employees to pick and choose which perks and benefits they want from a list of possible options.

2. Budget and Negotiate

Employee benefit plans can be expensive, so set a budget in advance and make sure that the offerings you choose are within your price range. Some benefits, such as the option to work remotely, may not cost your company out-of-pocket at all.

For other employee benefits, like health insurance, you can shop around and compare health plans to see which insurance carrier offers the best deal for the price. In many cases, both you and the employee will pay a share of the premium.

Don’t be afraid to negotiate with providers when putting together a benefits package. You may be able to get a better deal by bundling services.

3. Streamline Enrollment

A compelling benefits package can attract new employees, but it’s important to ensure that employees know how to enroll in and make use of those benefits. Signing up for a new health care plan, opening a retirement account, and nominating dependents and beneficiaries can be a complex process.

Be sure to inform employees about deadlines, such as the open enrollment period for health insurance, as well as what to do if they leave the company.

You can use automation during the onboarding process to streamline enrollment and provide tutorials on how to access key employee benefits.

4. Ensure Compliance

Some employee benefits are mandatory, while others are voluntary — but you still need to provide them fairly and consistently. The Employee Benefits Security Administration (EBSA) is responsible for ensuring that employers comply with their obligations.

Some benefits may also be governed by laws like the Affordable Care Act (ACA), which determines which employers need to offer health insurance coverage and what level of coverage they need to provide.

You can use HR software to monitor compliance with these regulations, and take out employee benefits liability insurance to cover you if you make any mistakes.

5. Assess and Automate

Finally, review the effectiveness of your employee benefits program over time. If your budget changes, or if your benefits package hasn’t reduced turnover or improved job satisfaction, you may need to reconsider which benefits you offer.

Use surveys to determine which benefits employees actually want, and which ones you can remove without impacting employee engagement. You’ll also need to monitor when and how employees use their benefits. For example, you’ll need to keep track of their FMLA leave balance to comply with federal leave law.

By using HR software and automating as many parts of the process as possible, you’ll be able to administer employee benefits without overwhelming your HR team.

Manage Employee Benefits More Efficiently With Automation

4 employees discussing something

Employee benefits range from traditional benefits like health insurance and retirement savings plans to fringe benefits like commuter benefits and pet insurance. It’s the HR team’s job to handle employee benefits enrollment and administration.

Benefits administration involves designing a competitive benefits plan, communicating the value of that plan to employees, and overseeing benefit enrollment and usage. 

When you use Pulpstream to handle employee benefits administration, you’ll be able to streamline key parts of the process. Pulpstream offers a customizable rules engine you can use to determine benefit eligibility, and a self-service portal where employees can manage their own benefit accounts and submit leave of absence requests.

Best of all, Pulpstream’s no-code interface means that HR professionals can use it to administer employee benefits without having to learn how to code.

Request a demo today and see how it works in only 30 minutes!