Definition: Benefits administration involves designing and managing employee benefits programs within a company. Successful benefits administration strikes a balance between offering a positive employee experience and ensuring business efficiency and compliance.
With over four decades of experience with benefits administration in human resources, Alight is uniquely positioned to answer this question.
Benefits administration has two main objectives when interacting with employees.
Open enrollment (or new hire enrollment): when your employees sign up for their health care benefits.
Ongoing support: answering questions and providing your people with education and guidance throughout the year.
Learn more about Alight Benefits Administration
Ben admin that actually enables your strategy. There’s an easier way for your employees to navigate open enrollment and engage with their health benefits.
What is included in benefits administration?
- Health benefits: These include medical, dental, and vision insurance plans that help cover the cost of healthcare for employees and their families.
- Retirement benefits (often referred to as wealth benefits): These are plans such as 401(k) or pension plans that help employees save for their future and ensure financial security after retirement.
- Healthcare navigation: This involves guiding employees through the complexities of the healthcare system, helping them to find the right providers, understand their benefits, and make informed decisions about their health care options.
- Wellbeing benefits (Mind/Body/Wallet): These encompass programs that support physical, mental, and financial health, including wellness programs, mental health resources, and financial planning services.
- Leaves of absence: Policies that allow employees to take paid or unpaid leave for various reasons, such as maternity/paternity leave, medical leave, or personal leave.
- Additional benefits (sometimes called point solutions in the industry): These include a variety of other perks like tuition reimbursement, employee discounts, and flexible working arrangements.
Employee benefits administration: forcing choices between experience versus cost
Very often, human resource professionals feel as if they must choose between giving employees a better benefits experience (which is a budget killer) and cutting costs to increase efficiency (which is an experience killer).
However this experience vs. cost challenge is unsustainable over time. Companies must shift to a new model that optimizes both, delivering the better experiences their employees will love and the greater efficiency their business needs.
Employee satisfaction: A better experience that your employees will love.
Saving money: Greater efficiency for your business needs.
Employee engagement: Build a healthy and financially secure workforce.
In fact, many employees would even choose better benefits over a pay raise.
Steps to implement a benefits administration system
HR professionals follow several steps to implement an effective benefits administration system. Frequently they will turn to outsourcing these benefits administration activities to provide an improved employee experience and increase their return on investment.
- Planning and Design
- Find out what benefits employees want through surveys.
- Compare your benefits to industry standards.
- Set a budget based on company finances and employee preferences.
- Implementation
- Choose reliable and cost-effective benefit providers.
- Inform employees about the new benefits and how to enroll.
- Set up an easy enrollment process.
- Admin and Management
- Keep accurate records of employee benefits.
- Ensure compliance with laws like ACA and ERISA.
- Offer ongoing support to employees.
- Monitoring and Evaluation
- Track how benefits are used.
- Gather employee feedback.
- Make necessary adjustments based on data.
- Technology Integration
- Automate tasks like enrollment and claims processing.
- Use data analytics to understand benefit trends.
- Provide online portals for employees.
- Ongoing Improvement
- Stay updated with industry trends and regulations.
- Regularly review and improve the benefits program.
- Engage with employees to understand their changing needs.
Creating an employee benefits administration system is a challenging task. That’s why many, if not most companies outsource their benefit plan administration to experienced providers such as Alight.
Today's modern workforce is motivated differently than those of even the recent past.
Employee benefits have become the heartbeat of competition and employer choice in the intense competition for talent.
Alight, with over four decades of expertise in outsourcing benefits administration, is well-equipped to help organizations navigate these challenges and deliver effective employee benefits.
Alight Benefits Advantage
The Alight Benefits Advantage turns benefits from a necessary expense into a game-changing differentiator.
