Benefits Administration Solution Companies
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Employee benefits are the cornerstone of the overall employee experience, compensation, and retention strategies of most companies. Efficiently administering these programs is critical to their success.
WHAT IS BENEFITS ADMINISTRATION?
Benefits administration is the design, management, and optimization of an organization’s employee benefits program. Employee benefits can include health insurance, disability insurance, life insurance, and other types of group insurance, as well as retirement accounts such as 401(k), flexible spending accounts, volunteer time programs and other perks.
Benefits administration is often time-consuming and complicated; thus, many organizations rely on benefits administration software to bring efficiencies and accuracy to the process. Benefits administration software ensures the benefit programs are administered effectively, including offering appropriate plan options to specific classes of employees, identifying correct new hire waiting periods, educating employees about their various options, and more.
Most benefits administration software also communicates the information to third parties: for example, ensuring the medical insurance carrier enrolls new hires and that the payroll company takes the appropriate deductions out of each employees’ paycheck.
WHY IS BENEFITS ADMINISTRATION IMPORTANT?
With employee benefits making up over 30% of an employee’s compensation, it’s critical for organizations to ensure their employee benefits programs are being deployed correctly. Employee benefits are a key component to an employee’s job satisfaction, and with the tight labor market and increased focus on employee engagement, it’s imperative that employees (and potential employees) have a thorough understanding and appreciation of their employee benefits options.
Proper benefits administration also mitigates risk for the employer. With ACA, ERISA and other compliance requirements, organizations are in jeopardy of receiving large fines if their benefits programs are improperly managed.
Managing employee benefits programs is more challenging than ever, as benefits increase in complexity and employee engagement is critical to a business. The right benefits administration software is a key component for efficiently deploying employee benefits programs.
WHAT ARE EMPLOYEE BENEFITS?
Employee benefits are non-wage, tangible and intangible compensation offered to employees. Options can vary widely across companies. Employee benefits are provided in addition to salary.
Employee benefits is a term often used to refer to group insurance benefits. There are also supplementary insurance benefits and benefits beyond insurance.
Examples of Group Insurance Benefits
- Medical insurance
- Flexible spending accounts
- Health Savings Accounts (HSAs)
- Dental insurance
- Vision insurance
- Life insurance
- Disability insurance
Examples of Supplementary Benefits
- Cancer insurance
- Hospital indemnity insurance
- Accident insurance
- Critical illness insurance
- Pet insurance
- Legal insurance plans
- Identity theft protection
Examples of Non-Insurance Benefits
- Retirement programs, typically a 401(k) plan
- Financial programs, for instance a student loan program or tuition reimbursement program
- Wellness programs like an EAP or fitness program
- Paid time off, such as holidays, personal, vacation, and/or sick days and bereavement leave.
Offering a robust employee benefits package is a key component of attracting and retaining employees and has a direct impact on an employee’s sense of security and stability, both in their professional and personal lives.
When employees can learn about their benefits programs and customize their benefits options according to their needs, it provides them even greater satisfaction and appreciation of their options. Robust and flexible benefits administration software is a key piece to drive employee engagement and to help HR efficiently manage their employee benefits programs.