What is Benefits Administration?

The process of managing, organizing, and maintaining an organization’s employee benefit program is known as benefits administration. Human Resources is most commonly responsible for this role, which entails administering benefits such as:

  • health insurance (medical, dental, and vision coverage)
  • wellness plans and incentives
  • life and disability insurance
  • employee assistance programs
  • 401(k) and retirement accounts
  • paid time off (PTO)
  • parental leave

The importance of benefits administration

Planning a comprehensive employee benefit strategy is key to attracting and retaining top talent. Benefits are one of the most important things people consider when accepting a job offer – both in terms of cost and coverage options. When employees have comprehensive, affordable benefits available to them they are more likely to be holistically well and thrive within their work environment.

The benefits administration process

The benefits administration process begins with deciding which benefits will be included in the package offered to employees. HR managers and executives determine the types of benefits that will be offered by considering a variety of factors including cost, historical enrollment data, employee feedback, current trends, and state and federal regulations. They then work with their broker or benefits consultant to select plan designs with the coverage options and rates that best suit the needs of their organization.

Once the benefits package is finalized, it’s time for employees to enroll. This takes place for the entire company once a year during an open enrollment period (the only exception to this is for new hires when they first join the organization, or for employees that experience a qualifying life event during the year).

During enrollment, it’s vital that employees understand how to elect their benefits, the plans being offered to them, when their coverage will go into effect, and what each plan will cost them. One of the most important pieces to a successful open enrollment is a solid benefits administration software. Using technology to facilitate enrollment provides employees with a self-service tool to learn about, enroll in, and view their benefits – and, it gives HR a centralized hub to communicate information about benefits, monitor enrollment progress, and maintain data all throughout the year.

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