Employee benefits administration

Employee benefits administration is a process that determines, manages, and updates benefit programs for employees. The process is usually done by human resources using HR software. A traditional benefits administration takes care of employees’ insurance, vacation, retirement plans, paid leaves, etc. The benefits have also expanded to pet health insurance, student loan repayment, discounts on products and services, and many more.

Steps for employee benefits administration

There are a few steps that a company can follow to create a good employee benefits administration.

  • Start by evaluating the current benefit programs. It is essential to check if they abide by the government guidelines and regulations—research the other industry’s programs to understand and formulate a beneficial program.
  • Communicate with benefits suppliers and learn about their terms and conditions.
  • The next step is to create benefit programs. The company needs to determine the kind of programs offered, for example, retirement plans, PTO policies, etc. It is also crucial to decide which employees are included in the program among permanent, temporary, and contract employees.
  • The employees have to be informed about the benefit programs. HR needs to train the employees on how to sign up for the program and let them know about the procedure and deadline of the program. Training in the corresponding HR software will also be beneficial.
  • The organization has to review and update the benefits program with time regularly.


Why is it important?

Having an employee benefits administration is essential for various reasons.

  • To attract and hire efficient people- Having a benefits system tied with the employee’s performance helps attract the top talent of the industry. Highly talented people will be interested in joining the company with great benefits.
  • Employee retention and engagement- When the employees get extra benefits other than salary, they feel heard and appreciated. This helps to improve the productivity and performance of the employees.
  • Reduces stress and gives peace of mind- When many things like retirement accounts, leaves, and vacations are taken, it reduces the stress of an employee and gives them peace of mind to focus on the work better.
  • Saves money for the company- While creating or updating a benefits program, reviewing the current programs, and checking the programs in other industries, helps remove the underutilized programs in the company, thereby cutting the cost for the company.


Employee Benefits Security Administration (EBSA)

  • Employee Benefits Security Administration is an agency in the US department of labour that assists workers in understanding the benefit plans. Its goal is to make labourers understand their rights and use the employee benefit plans. It also helps benefit administrators comply with the law and develop better employee benefit administrations.


Essential skills required for a benefits administrator

An employee benefits administrator is an HR professional who creates, manages, and updates the benefit programs. They should be familiar with federal guidelines and government laws and regulations. They should also have skills like good communication, good with the relevant software, negotiation, and teamwork.


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