What is Employee Benefits Administration?

What is Employee Benefits Administration?

Employee benefits comes with a lot of administration. Managing employee benefits includes communicating with insurance carriers, setting up benefit plans, collecting eligible employee enrollment data during open enrollment, updating payroll deductions, and performing new hire enrollments, life change events, and benefit terminations.  

Traditional employee benefits can include traditional health insurance as well as all sorts of other supplemental insurance or ancillary benefits. These can include dental insurance, vision insurance, life insurance, disability insurance (short-term and long-term), and retirement plans or 401(k)s.

In today's modern landscape, traditional benefits alone often don't cut it. Employees these days are looking for traditional benefits, in addition to trendier, out-of-the-box employee benefits such as remote or hybrid work, student loan repayment plans, pet insurance, unlimited time off, and more.

In order to stay competitive in talent acquisition and employee retention, employers need to ensure benefits offerings are attractive and comprehensive. Nevertheless, without the right processes and solutions, managing administration can become a complex burden for companies.

Benefits Administration - Why Are Best Practices Important?

Maintaining administration can be a complex and time-consuming process throughout the year, even more so during an employer's open enrollment period. This is especially true if employers are experiencing a lot of new hire enrollments, life change events, or even benefit terminations.

In addition to dealing with the plethora of benefits tasks that can arise, employers simultaneously need to manage compliance with labor laws, like the Affordable Care Act (ACA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), or even the Family Medical Leave Act (FMLA). Non-compliance with these benefits-related labor laws and employee protections can result in penalties, fines, and / or can greatly increase the risk of employee lawsuits or lawsuits from their dependents.

Therefore, rules-based employee benefits processes, tools, systems, and / or software that can help eliminate benefits errors, streamline administration, and keep premium costs as low as possible for employers — all while keeping employees happy — are imperative. 

Advantages of Benefits Administration Software

Benefits administration software features or solutions may include any one, combination of, or potentially all of the following advantages or key benefits to employers:

• Automation through rules-based processes and workflows
• Employee self-service and manager self-service options across devices
• Streamlining benefits enrollment, administration, and carrier connections
• Minimizing non-compliance risk and potential lawsuits 
• Increasing visibility into benefits eligibility, enrollment status, and costs across employees
• Modifying benefits data into KPI-based dashboards and reports for executives

Benefits Administration System Requirements

Benefits administration software should help manage employee benefits throughout the entire employee lifecycle, while helping you to set up, configure, modify, and manage multiple benefit plans that differ across employee status or type. 

Benefits Administration Software Functions Every Solution Must Have

Benefits administration software should allow you to streamline benefits management and should include the following features:

• Comprehensive Plan Rules - including eligibility, waiting periods, age, and banding,
  to ensure your policies are enforced
• Effective Dated Plans - to eliminate manual date-based changes
• Evidence of Insurability - with settings for open enrollment, new hire, and life
  change events
• Passive Enrollment Options - for automatic enrollment in the same benefits
• Automated enforcement of court-ordered dependent coverage
• Customizable Electronic Forms - for the collection of additional plan data
• Automated Notifications - to easily communicate to targeted employee
  populations
• API Connections - to transmit benefits data to insurance carriers, financial partners, and COBRA administrators
• Employee Self-Service - including reviewing and enrolling in benefits,
  comparing benefits, understanding contribution amounts, and updating
  personal information

Matching Benefits Administration Software With Other Workforce Management Solutions

The tricky thing about employee benefits is that it involves employee data and tasks from every part of the employee lifecycle and every function of payroll and HR, such as payroll processing, employee onboarding, and more.

With employee benefits management software that's part of a more wholistic human capital management platform, employers can manage benefits processes by centralizing employee data all in one place.

Benefits Tools - What Features Should Benefits Software Have?

Benefits software can have a plethora of features, here's a sampling of some of the most important and common benefits software features that every solution should include: