Your company benefits program is your ace in the sleeve for attracting the best talent and making your organization stand out above the competition. During this time when mental health and wellness are top of mind, knowing that a company provides extensive coverage in the areas of health care, dental care, disability, flexible spending accounts, retirement accounts, vacations and paid time off, sick leave, and parental leave can be even more valuable to potential candidates than the salary alone.
When the human resources team is up to date with benefits administration, they can confidently speak about different aspects of the benefits package, which can attract top talent who may have competing offers from other firms.
Let's explore what benefits administration is, the main categories of employee benefits, and how to improve benefits management for your team.
What Is the Purpose of Benefits Administration?
Benefits administration refers to the process of providing health benefits to employees. This role is undertaken by the HR department.
The duties of a benefits administrator are to:
- Decide which benefit plans to offer, including benefits other than health care
- Design group health plans with external providers and negotiate pricing
- Manage the day-to-day administration of health plans for the whole organization
- Provide plan information to employees, including making new hires aware of their eligibility during onboarding
- Seek out new benefits add-ons to stay current and improve existing offerings
- Supervise the benefits administration systems to ensure their functionality
Benefits administration is an essential part of human resource management. When it works well, it can ensure that employees are healthy and happy while performing their jobs.
What Are the 5 Most Popular Types of Benefits?
To help narrow down your choices, we’ll cover the five main categories of health benefits offered by organizations.
These five benefit types will help your employees feel protected in unforeseen circumstances. In exchange, by easing your employees’ worries, your company is building employee loyalty and strengthening retention. Here are the top five benefits employees look for most:
1. Health Insurance
Many potential candidates will hope to have at least basic health coverage of their medical expenses when seeking employment. Health insurance is costly to buy on your own, so this can be a game-changer for uninsured employees.
Health insurance typically partially covers the cost of physician visits, prescriptions, and hospital room expenses. Vision insurance and dental care are usually separate options that employees can choose to add on to their plan.
Organizations can choose whether to contribute to premium costs for dependents when providing a group plan, to include the spouse, domestic partner, and children of plan-eligible employees. Under the Affordable Care Act (ACA), dependent children must be covered up to the age of 26, regardless of whether they share the same residence as the employee.
Many companies provide health benefits only to their full-time workers (40 hours a week). Still, some organizations might extend their benefits offerings to part-time employees, too, once they've passed a probationary period.
2. Retirement
Even for employees who love what they do, there's always the dream of the day they can retire and relax. Having some money squirreled away is necessary to achieve that dream, and employers can opt to help by providing retirement benefits.
The two types of retirement plans are:
- Defined retirement plans, more commonly known as pension plans, are where the employer is responsible for making contributions to a retirement fund on behalf of employees. Workers will receive payouts from the fund when they reach retirement age. The amount they receive is formulated by the length of time the employee has worked and their salary when working.
- Defined contribution plans, also known as 401(k)s, allow employees the option to contribute part of their paychecks to an account designed to fund their retirement. Employers can offer to partially or entirely match those employee contributions — a definite benefit.
Sometimes, an Employee Stock Ownership Plan (ESOP) option is provided in a small business or start-up environment instead of the more traditionally offered options above.
3. Life Insurance
This type of insurance is a type of protection for the employee's family in case of an untimely death. After such a death, life insurance helps pay for funeral costs and provides a safety net for the family’s living expenses.
Often, life insurance is a benefit an employee must choose whether or not to partake in. Policies vary in the payouts they offer, although they can cover up to $50,000 or even the employee's total salary.
4. Disability Support
If an accident occurs and renders the employee disabled or requires a prolonged recovery time, this benefit ensures the employee still receives their salary.
The company can provide long-term and short-term disability options so that basic expenses are covered while the employee either recovers or finds another position. Short-term disability is a percentage of the employee's salary paid temporarily, whereas long-term disability may be provided for up to ten years.
5. Wellness Add-Ons
People have never thought about their health more so than recently, and this is therefore a unique opportunity for organizations to offer perks that step outside traditional benefits administration categories.
Examples include:
- Gym memberships
- Wellness subscriptions or magazines
- Mindfulness courses
- Group exercise classes or retreats
- Incentivized wellness programs using points to receive perks and rewards
- Allowances for wellness tools or accessories, like a pedometer
Wellness programs have been shown to positively impact productivity and budget, even if at first it seems like an added expense.
A Harvard-affiliated study shows a drop in medical costs by $3.27 for every dollar spent on wellness programs. Absenteeism costs also drop by $2.73 for every dollar invested in keeping employees well.
Having happy employees has an incredible effect on the company culture, which also benefits through recruitment of top quality hires and retention.
2 Simple Ways to Improve Benefits Administration Processes
Now that we have an idea of benefits administration and the various types of benefits that employers can invest in to help employees feel secure, let's dive into how to enhance the benefits administration experience status quo for everyone involved.
Here are two important ideas to get you thinking about taking your employee benefits administration to the next level.
Continue to Do Research Into Your Benefits Offerings
Schedule a call with your organization’s benefits providers to regularly revise your offerings and get updated on benefits information. As workplace landscapes shift and change, so should your policies.
You need to keep evaluating which benefits your company should offer to ensure they genuinely reflect the demographic of your workforce.
Asking for anonymous feedback through polls or surveys might be one way to decipher whether your plan is meeting employee needs. You can also look at how benefits have been historically used by employees and which benefits have not been used or requested.
This research can help you to forecast a more thoughtful way forward. Create a space for employees to share any ideas and thoughts about benefits they feel are lacking. Some of their suggestions might be low-cost fixes that enhance the employee experience and help to retain talent.
Use Benefits Administration Software
Rather than outsourcing (which is costly and slows things down), try an automated HR software like Pulpstream. Automating the benefits administration process can help to streamline communication and generate real-time reports that support the entire HR team.
Here are just a few benefits of automation:
- Track important milestones with custom notifications.
- Reduce manual errors and ensure compliance.
- Gain easy and secure access to records anywhere, anytime.
- Custom features and logic-driven workflows save your HR team time so they can focus on other people-centric tasks.
Automation is the future of human resources management, whether the end result is greater visibility of crucial information or enhanced processes that enable transparent and compliant communication.
Boost Your Benefits Administration Process With Pulpstream
Mental health and wellness have become hugely popular workplace considerations, and there's a good chance this trend will continue. When job candidates are weighing a new opportunity, they will definitely consider the benefits a company offers. For employees, the various types of benefits offerings make them feel safer, and you can't put a price on peace of mind.
When the HR team uses supportive tools for benefits administration, the increased efficiency leads to more accessible information, clearer processes, and faster turnaround times for employees who claim their benefits.
Discover how Pulpstream streamlines, automates, and modernizes benefits administration to help you remain competitive in the marketplace — and to keep both your existing and future team members happy.
