A business is only as good as the collective contribution of its employees. Customer service, customer satisfaction, and customer loyalty are what all companies are after. Similarly, employers also aim to obtain the same things from their employees. Satisfied employees are more likely to become loyal employees. Year after year, the competition for top talent grows. Organizations develop strategies to attract and retain stellar employees. And while there are a host of factors that make employees stay with a company, one of the top things is the benefits that the company provides. With this, businesses focus on employee benefits administration.
What is employee benefits administration?
Employee benefits administration refers to the overall process of developing, managing, implementing, and updating the benefits that an organization provides its employees. From deciding on what benefits to give, looking for suitable providers, to assisting employees in availing the benefits, these are all under the benefits administration umbrella. In general, the responsibility of this entire process falls under the scope of Human Resources through a benefits administrator.
The selection of benefits may vary from one business to another. However, employee benefits usually cover health, dental, disability, life, retirement plans such as a 401(k), paid time off, vacation leave, sick leave, and parental leave.
Why is employee benefits administration important?
Efficient employee benefits administration offers multiple benefits for both the employees and employers. First, a business that takes time to evaluate the needs of employees and adapt its benefits program to those needs will be a big boost to the morale of the workforce. Not only will they feel heard, but they will also feel cared for, appreciated, and valued. In this way, employees will become more engaged which can translate to an increase in productivity.
Additionally, it is no secret that happy employees make a happy workplace. Current employees can serve as advocates for an organization. Companies with an effective and meaningful employee benefits administration have an edge. They can attract candidates and retain them as well. Lastly, companies can save time and money by evaluating and reviewing their benefits programs. In doing so, they can discontinue those that are underutilized and modify them for maximum engagement.
What is the employee benefits administration process flow?
The employee benefits administration process begins with deciding what kind of benefits to offer. Together with the HR team, business leaders and executives need to determine the different benefits that would best meet the needs of their employees. There are many points to consider. What kind of insurance should be offered to what level or designation? What are the retirement benefits? How about the company’s leave and PTO policies? Are there other unique benefits that the company can offer? Not to mention, all these benefits must consider employees at different levels and types: full-time, part-time, temporary, and other categories depending on the organization’s workforce.
Aside from determining what benefits to offer and managing benefit costs, another important aspect is ensuring that all employee benefit plans comply with federal guidelines and regulations. Furthermore, employee benefits should be managed and administered efficiently. Educating employees about their benefits, enrollment process, timeframe, dependents, and claims is crucial. Most companies use benefits management software to help in running different benefits packages and prevent errors that could happen if tasks are done manually.
What is the Employee Benefits Security Administration (EBSA) and what does it do?
The Employee Benefits Security Administration (EBSA) is an agency under the U.S. Department of Labor. As an agency, the EBSA educates and assists American workers, retirees, and their families who are covered by different health plans, private retirement plans, and other employee benefits plans in the private sector.
The EBSA provides direct assistance to all workers, providers, and plan sponsors in becoming more knowledgeable about the plans. In this way, they can fully maximize the benefits that they are entitled to when the need arises. For practitioners and service providers, the EBSA also allows them the chance to better understand and align with the laws relevant to employee benefits. Additionally, the EBSA enforces rules and regulations that all private sector benefits and pension plans in the country should follow. They uphold worker benefits rights and help in legal action against plan managers who do not comply with federal guidelines.
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