Discover the best benefits administration software to create the plans your employees want.
Offering your employees enticing benefits can go a long way in terms of recruiting top talent and retaining top performers.
When you present your team the right combination of compensation and benefits programs, you can set your company apart from competitors, making your organization more enticing to work for. But only if you do it right, that’s where benefits administration comes in.
Benefits administration is the process of updating, managing, and developing benefits for employees. Typically, HR professionals perform these duties for their organization as they enroll employees within various programs.
As an human resources professional, it’s essential that you understand the ins and outs of benefits administration, and that your company is utilizing the right software. Let’s dive in.
If you’re a benefits administrator, then you’re responsible for directing and planning all of the day-to-day operations that coexist within your company’s benefit programs.
This entails asking any questions employees may have regarding benefits programs and what they offer, designing the plans, onboarding new employees within the appropriate plans, and investigating new benefits. It’s also up to you to improve any existing programs and understand the ins and outs of all of the software being used.
There’s a lot that goes into benefits administration, no matter the size of your company. In order to conduct benefits administration successfully, follow these six steps.
The benefit plans your company offers provides advantages and flexibility to your employees that salary doesn’t. There’s a long list of employee benefits that your organization can offer, from popular and traditional to voluntary.
Some benefits are required by law for your company to offer. These employee benefits are a set standard across states and industries and every employer must offer them in order to stay compliant with laws created by the U.S. Department of Labor. These include:
In addition to this list, there’s also the employee benefits that are considered the industry standard, like health insurance, family and medical leave, disability insurance, paid time off, life insurance, and stock options.
Some voluntary benefits, or perks, that you can also offer employees include: wellness programs, flexible working hours, holiday parties, and more.
Benefits administration is done right when it can motivate employees while remaining cost-effective for employers.
is the average cost of employee benefits, with $25.91 being the average cost of wages and salary.
Source: Bureau of Labor Statistics
Usually, an employer will cover 70% of medical, dental, and vision costs in the benefits plan. A bundled payment plan with a negotiated price can save your organization on some of these costs.
Your company can also choose to offer a variety of voluntary benefits, as these are less expensive but can still help meet the needs of your employees.
As an HR professional, you won’t be able to enroll employees who aren’t eligible, and you also can’t refuse benefits to those who are. It all comes down to the eligibility rules within your plan document. It also depends on each employee’s regular working schedule.
According to the Affordable Care Act, “applicable large employers,” which are current employers with 50 full-time employees and full-time equivalents, must cover employees working 30 or more hours per week or pay a penalty.
It’s a big task to manage employee benefits, and it requires HR professionals to keep tabs on many items and tasks.
There must be proper communication with employees and C-suite executives, compliance must be met during open enrollment periods, and so much more. Doing everything manually can considerably stifle workflows and leave room for errors.
Thankfully, utilizing benefits administration software helps simplify all tasks at hand for both HR professionals and end-users alike. The right software can effectively streamline the benefits process, while also:
As stated, it’s entirely crucial that your company remain compliant as you administer benefits to employees. This is easier said than done, as there are numerous rules and regulations set by the federal government, including, HIPAA, ACA, FMLA, and COBRA, which encompass medical authorization, labor laws, and financial stipulations.
The Health Insurance Portability and Accountability Act (HIPAA) aims to protect workers with additional opportunities to enroll in group health benefits coverage if they were to lose their health coverage, get married, or add a dependent onto their plan. HIPAA also prohibits employers from changing enrollment or premiums due to the health factors of their employees.
It’s required by all businesses with 50 or more full-time employees to offer some kind of group health insurance plan to their team. If not, they’ll be hit with a tax penalty. Businesses also need to maintain compliance with the Affordable Care Act (ACA). This includes determining which employees are eligible for coverage, sending them 1095-C documents, and filing 1094-C forms directly with the IRS.
The Family and Medical Leave Act (FMLA) makes it possible for eligible employees of covered employees to take unpaid leave for specific family and medical reasons. It covers private sector employers with 50 or more employees, as well as public and private elementary schools and public agencies.
Finally, COBRA is for employers with more than 20 employees, as it protects employees, former employees, spouses, former spouses, and any dependent children from losing health coverage in the event of death, termination, or a reduction in hours.
At the end of the day, the benefits that your organization provides need to make sense for the people being employed. It won’t be one-size-fits-all and you should be able to make adjustments as the demographic of your employees change.
If you have a bunch of recent college grads on staff, it’s a good idea to offer student loan payment. Similarly, while older employees may be more interested in retirement benefits, younger staff will have their eye on what is being offered in terms of paid leave for new parents.
Take a look at the current benefits being offered and see how much they’re being used to see if it’s time for a change. You can also get direct feedback by sending out employee benefits surveys to find out what your employees have to say, what they like, and what they’d like to see added.
Benefits administration software helps businesses of all shapes and sizes plan and administer employee benefits packages while also ensuring compliance with all government regulations.
These tools are used by HR professionals to manage employee benefits, such as various stock options and insurance plans, while also facilitating open enrollment periods. You’ll also find that many options also incorporate employee self service features, which allow employees to view, update, and manage their personal information and documents.
Software within this category helps HR managers pinpoint the benefits that provide the most value to their employees, while also reducing overall cost. These tools can also ensure businesses are compliant with federal and local regulations, including the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA).
In order to be featured within this category, software must:
* Below are the top five leading benefits administration software solutions from G2’s Fall 2020 Grid® Report. Some reviews may be edited for clarity.
When it comes to an all-in-one software tool that streamlines payroll, benefits, talent, and workforce management, Paylocity has you covered. Because this tool is specifically tailored to HR professionals, they can focus more on daily tasks and less on challenges that may arise. Plus, it boasts best-in-class customer service.
“The implementation with Paylocity was quite painless. I was amazed by how quickly and accurately they loaded our data into their system. There were a few glitches (as there are with any transition) but nothing that they couldn't correct pretty quickly. The system is very easy to use, the report writer is awesome, their customer service has been excellent!”
- Paylocity Review, Sandy B.
“There are some complications to functions related to employee time-keeping, although their product team will work with you to find the best approach to match any use case you throw at them. The complexities involved with deployment did lead to some head-scratching moments on both ends, but in the end, they were both informative, open, and easy to work with to achieve the goals we were set to accomplish with deployment.”
- Paylocity Review, Jason L.
ADP Workforce Now is an easy to use human capital management solution for companies with over 50 employees. From payroll to benefits and even talent management, it encompasses a long list of features designed with HR professionals in mind.
“The functionality of the product and the customer service are top-notch! The connection from onboarding through payroll to discharging employees is seamless. I use the analytics dashboard each week to narrow our focus on areas we need to work on and share that knowledge with our Executive team.”
- ADP Workforce Now Review, Jason S.
“It does so much that I almost can't keep track of all the things it does. I don't like that once implementation is done, we have no contact to help us move forward. There isn't anyone that stays with you and checks in on you to see if you need assistance. Having a team assigned to your account afterward would be so helpful knowing I had a contact that could direct me in the right place without having to call customer support.”
- ADP Workforce Now Review, Karen G.
Workday Human Capital Management provides users with a single source of data to meet all of their changing business needs. It’s user-friendly and can be accessed both on desktop and mobile. It works seamlessly with other Workday products, like Workday Financial Management, Workday Payroll, Workday Recruiting, Workday Learning, Workday Planning, and more.
“I love that Workday is very user friendly, both on the administration side and the end-user. As an administrator, I love that we can be self-sufficient. If we need to create a new report or update a report we can do that. If we need to update or create a new business process or workflow we can do that.
I also love that Workday has a whole suite of products that work together. It makes system fatigue less for the end-user when they can look at their payslip, change their home address, open a position for recruitment, process an expense request or take a required work training all in one place!”
- Workday HCM Review, Sonya M.
“If bought ‘off the shelf’ it can be difficult to implement and training will be required on how to fully utilize the system. It’s not easy to pick up with little to no knowledge of the system.”
- Workday HCM Review, Holly L.
Ceridian Dayforce works to help HR professionals and business leaders make smarter decisions by managing the entire employee lifecycle in one place. This comprehensive cloud platform combines HR, payroll, benefits, workforce management, and talent management in a single application.
“We make use of Ceridian Dayforce HCM for payroll processing, onboarding as well as time and presence. Ceridian Dayforce offers us the adaptability to easily access the flow of data between modules. It also understands when staff member withholding is appropriate based on the worker's address.”
- Ceridian Dayforce Review, Abraham D.
“The tool doesn't allow for tracking anything other than the schedules and work hours. You cannot track if employees are working specific tasks during their work day if those tasks link to a premium or different rates.”
- Ceridian Dayforce Review, Sarah B.
Gusto Payroll puts payroll and benefits all in one place. Plus, users can also access features surrounding time tracking, hiring and onboarding, and even employee finance tools.
“Gusto is now an all-in-one solution for HR. You can handle everything from onboarding (which is now amazing with automatic requisitioning accounts like Google and Zoom), benefits, payroll, and time tracking. I especially love the service. The folks at Gusto have been nothing but kind, quick, and responsive to feedback. I've even been lucky enough to provide input that's been heard and acted on.”
- Gusto Payroll Review, Johnny A.
“Instructions could be more descriptive. It could also be a little more in tune with orgs, creating an org chart or something similar to that. Some form letters could be better, too.”
- Gusto Payroll Review, Adam R.
From creating a robust benefits program, to enrolling new members, and answering all the questions that come with it, there’s a lot that goes into benefits administration.
Remember to think outside the box – there are benefits that your employees need, like healthcare, and there are benefits they want, like paid time off. What will you offer your team?
Make the most of the benefits your company offers and be sure to include them in your recruitment marketing strategy as a way to draw in top talent.
Mara is a Senior Content Marketing Specialist at G2. In her spare time, she's either at the gym, reading a book from her overcrowded bookshelf, enjoying the great outdoors with her rescue dog Zeke, or right in the middle of a Netflix binge. Obsessions include the Chicago Cubs, Harry Potter, and all of the Italian food imaginable. (she/her/hers)
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