Benefits Administration

Salary is likely the most important—but in no way the only—factor in recruiting new employees and retaining existing ones. 

You simply can’t afford to slack off when it comes to benefits administration.

Because it is so important and multifaceted, employee benefits administration requires a significant amount of knowledge, time, and effort to manage successfully across your workforce. 

Mastering Benefits Administration

Benefits management may evoke thoughts of vacation time and paid leave, but it isn’t all sunshine and rainbows, and certainly not when it’s done improperly. 

Failure to comply with laws and regulations will result in fines and other costly consequences for the company, so they should be avoided whenever possible. 

Mastering these areas will enable you to manage benefits seamlessly across your organization. 

Getting the Most Out of Your Benefits Plan

When it comes to benefits, both legal compliance and employee satisfaction are critical. You need a thorough understanding of the benefit plans employees use and what that means for your organization. 

Benefits management and administration need to be optimized to better serve workers. The results should be cost-effective for the whole company, reducing the expense of turnover and recruiting. 

Popular, useful benefits will also improve workplace morale and the whole company culture.

Strategies that may help your organization and employees get the most out of available benefits plan include:

• Distributing a detailed benefits guidebook once per year to notify users of available perks; this information should also be shared with new employees as they’re onboarded
• Have benefits information easily accessible and well-organized through your digital employee portals
• Train managers to encourage fringe benefits enrollment; if they hear a team member talk about loving the gym, for example, they can make sure the team member knows about the company’s wellness program

Learn more at: get the most out of their benefits plan.

Challenges with Benefits Enrollment

Many employees face difficulties getting started with their benefits, let alone actually claiming them. They may not understand how to select the right benefits for them, know about fringe benefits like wellness programs or employee education assistance, or be familiar with eligibility requirements. 

Understanding the major pitfalls of benefits administration, for managers and employees alike, will enable you to ensure that your workers are getting the most out of their plan, and that all actions are correctly executed to maintain legal compliance. 

When employees are unsure about what their benefits are, who qualifies, or how to access them, the following may happen:

• Employees fail to enroll in essential benefits they need on time, including health insurance; they may, for example, miss the fact that the company’s insurance provider is changing and fail to sign up for new policies  
• Team members may not be aware of career advancement benefits like employee education assistance or mentoring programs, reducing program participation and preventing upskilling 
• HR team members may find themselves bogged down answering the same questions over and over, slowing down their processes 

Compliance with Regulations

Some benefits are protected by state or federal law and must be provided by a qualifying employer if certain conditions are met. Let’s review some of the most critical regulations HR teams need to know about benefits administration. 

Workers’ Compensation: Essential Knowledge

Understanding and effectively managing workers’ compensation is essential for protecting your employees and your business. For businesses, it reduces the risk of lawsuits and shows a commitment to employee well-being. For employees, it provides financial support and access to medical care, bringing a sense of security and well-being. 

Essential information to consider for worker’s compensation may include:

• Most U.S. businesses must have a worker’s compensation plan; the exception would be single-member businesses that are sole proprietors, partners, and LLC members, who do not have to have worker’s compensation insurance for themselves 
• Executive officers who own at least 25% of a corporation are automatically covered
• Many states have their own worker’s compensation laws, which may be more strict than federal regulations

Learn more about workers’ compensation.

Managing ACA Reporting Requirements

Since its inception, the Affordable Care Act (ACA) has had several requirements for employee benefits and annual reporting with some changes over the years.

The dual legislation addresses health care costs, insurance coverage, and preventative care. Of special interest to businesses, the employer mandate requires certain companies to make sure that full-time employees have access to health care.

Regarding compliance, HR teams should consider the following:

• Organizations with 50 or more full-time employees must offer affordable and essential coverage to at least 95% of full-time employees and their dependents
• Open enrollment periods are short and there are only a select number of qualifying events, so make sure that team members are notified repeatedly about upcoming enrollment periods when they can join new policies or adjust coverage 
• Failing to comply with the ACA can result in steep financial penalties 

Learn more about ACA compliance.

COBRA Health Insurance

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1985. It protects employees and their families (under certain circumstances) from going without insurance by requiring that employer-sponsored group plans with 20 or more employees offer team members and their families the opportunity to temporarily extend their health coverage when the plan may otherwise end. 

Smaller businesses are not legally required to offer COBRA. Generally, it’s required at companies with more than 20 full-time employees, as well as state or local government jobs. (Federal workers have similar protections with Temporary Continuation of Coverage under FEHB.)

To support improved compliance with COBRA, organizations should do the following:

• Employees may qualify for COBRA even if they elect to leave your organization as they wait for coverage from their new employer to begin
• Employees have up to 60 days to enroll in COBRA once their employer-sponsored benefits end 
• COBRA may allow employees to maintain coverage for 18-36 months, depending on the individual’s circumstances

Discover everything you need to know about COBRA health insurance.

Continued Employee Engagement

Strong employee benefits are directly tied to increased employee retention rates. To increase employee engagement and program adoption, HR teams should ensure that all team members have easy access to benefits information, enrollment processes, and all potential program changes. 

Employee Self-Service Portals

Employee self-service (ESS) is a labor-saving HR technology solution. ESS allows your employees to access their own employee information and resolve tasks that might otherwise require a manager or Human Resources personnel.

Employee self-service delivers a common-sense need for employees to be able to perform simple tasks for themselves. This saves everyone time and hassle. Why involve additional staff, when an employee simply needs to check their pay stub or confirm a detail about their benefits? 

Employee self-service portals should do the following:

• Contains critical information about open enrollment periods for health insurance 
• Provide information on how employees can access all benefits, including direct links or embedded log-ins to associated benefits partners 
• Be easy to navigate, even for less tech-savvy employees 

Learn more about Employee Self-Service Portals.

Open Enrollment Strategies

Streamlining Open Enrollment 

Open enrollment is ridiculously stressful. Many workers report feeling intimidated about enrollment deadlines and vague coverage options. After the latest period of inflation, 79% of working Americans worry their workplace benefits will get more expensive during open enrollment. 

Many workers have had bad experiences with healthcare providers in the past, from missed deadlines to insurance that never seems to cover anything. HR can help reduce some of the biggest problems and fears of open enrollment by doing the following:

• Alerting team members about open enrollment regularly before and during enrollment periods, with a critical “last chance” email before the period ends 
• Providing clear information online and potentially through physical booklets that have breakdowns about different plans and benefits, including deductible and out-of-pocket costs for each 
• Sharing information about provider or policy option changes at least a month in advance, giving employees time to consider their options if needed 

Learn more about preparing employees for open enrollment. 

Trends and Innovations

The Advantage of Mobile Benefits / Benefits on the Go

We’ve become a culture of instant gratification and short attention spans, but that’s not always a bad thing. Your employee benefits administration portal shouldn’t be a difficult place for employees to check their plans and make sure their information is correct. Mobile accessibility is a small way to ensure that your employees are able to easily use their benefits— and increase adoption.

Learn more about mobile benefits management. 

The Rise of Telemedicine in Your Employee Benefits Package

Since COVID-19, fewer patients visit hospitals and doctors in person, though seeing a doctor is still obviously very important. Thanks to growing telemedicine capabilities, a new wave of doctor visits has emerged. 

When possible, ensure that employees have the option to enroll in policies that allow for telemedicine. They can get a prescription for Tamiflu without having to leave their home while sick, potentially increase the speed at which they see providers, and even overcome challenges like care deserts. 

Learn more about telemedicine benefits.

Technology and Automation for Benefits Administration

Benefits administration is the organization and management of benefits-related tasks at your company. Today, advanced HR technology can facilitate benefits administration with features designed to improve enrollment, streamline communication and problem-solving, and ensure compliance. It’s essential for HR teams of all sizes. 

Compatible HR software can automate much of the benefits paperwork, from the enrollment of new hires to COBRA administration. When software for benefits administration manages COBRA paperwork, your company’s compliance is automatically documented. 

Provide employees with self-service portals and digitized forms that minimize the hassle of redundant paperwork. Portals give employees an accurate, up-to-date summary of their benefits plan whenever they need it, including coverage, deductions, and more.

Learn more about how HR technology makes benefits administration easier. 

Improving Benefits Enrollment with HR Technology

Benefits enrollment occurs during a predetermined period of time, during which employees may elect or change the benefit options available through their employer. These options can include health, dental, life insurance, and an array of ancillary benefits.

New hires might immediately receive company electronics and ID badges, but you typically aren’t handing them a personal health insurance card on their first day. 

Throughout the year, HR staff communicate with vendors—directly or via a benefits broker—about any changes to policies and enrollment periods. Paperwork and policy details need to be kept up to date. Additionally, employees need answers to questions, updates about policy changes or coverage, and reminders about deadlines. This (and so much more) is all a part of the employee benefits enrollment experience.

Benefits enrollment is a lengthy, time-consuming process that requires a ton of paperwork, so while a changing job often counts as a “qualifying event” that allows you to make changes to insurance outside of standard enrollment periods, it may still take some time to get you up and running. 

HR technology can improve benefits enrollment in the following ways:

• Streamline the updating of paperwork and policy details 
• Alert employees about critical enrollment periods to increase benefits adoption 
• Provide quick access to detailed information that may help employees select which benefits, policies, and programs are most important to them 

Learn about the employee benefits enrollment experience. 

Features of Benefits Administration Software

Benefits administration involves lots of moving parts. Your employees need options to be able to sign up for the benefits they prefer, and your company needs to ensure accuracy, efficiency, and compliance. Thankfully, benefits administration software offers essential features that streamline many of the actual tasks of benefits administration.

Benefits administration software may offer the following functionality:

• Built-in enrollment services that support team members through onboarding, open enrollment, qualifying life events, and offboarding
• Compliance management to facilitate and track critical task completion for laws like the ACA, HIPAA, and other industry-specific regulations 
• Employee portals that include self-service options, onboarding curriculums with required training, and benefits information 

Learn about the essential features of benefits administration software. 

Automatic Payroll Deductions with Integrations 

Many employee benefits are easily managed with automatic payroll deductions, which are beneficial and preferred by both employers and employees. With 401k plans, those deductions affect the employee’s tax burden, and many employers choose to match contributions. 

For HR and payroll specialists, 401k payroll integration makes it easier to manage and accurately handle 401k transactions in the following ways:

• Streamline automatic payroll deductions to reduce manual tasks and eliminate the risk of potential human error 
• Automate employee match contributions and employee payroll changes
• Track employee eligibility and key data, including employment records, past contributions, and personal data 

Learn about 401k payroll integrations. 

Streamline Processes & Ensure Compliance with Benefits Administration Software 

Benefits administration software can increase employee program awareness and adoption, automate tasks for your HR team, and ensure compliance with federal and state laws. This can improve the experience for employees and HR team members alike, helping your entire organization get the most out of the benefits available to them. 

As benefits enrollment and participation increase, you may see benefits like improved employee retention, employee satisfaction, and company culture, making improved benefits administration processes well worth the effort. 

Netchex’s all-in-one payroll and HR solution offers extensive benefits administration features. Request a quote today.