You may have heard the term “benefits administration,” but what exactly does it entail and how can it help your business?
Simply put, benefits administration is the process whereby a business creates, manages, and updates its benefits program for employees. It’s important for retaining talent, attracting new employees, and keeping your benefits package running as smoothly as possible.
But how do you get started? What are the different components involved? This article is going to reveal all you need to know.
What exactly does benefits administration involve?
Benefits administration is an essential function for companies that offer employee benefits programs. Specifically, it involves planning, developing, and managing a variety of employee benefits, ranging from health insurance and retirement plans to wellness programs.
The main goal? To keep employees healthy, keep them happy, and keep morale high. A survey showed that 42% of employees are likely to remain in a job that offers good health benefits.
But what are the specific benefits?
This benefit is one of the most important and sought-after employee perks. Companies can offer employees an abundance of healthcare plans, from case management to opioid oversight, emergency room coverage, and preventive care. It all depends on the company’s needs, size, and budget.
Retirement benefits are another cornerstone of any benefits package, typically in the form of defined contribution plans like 401(k)s in which both the employee and the employer contribute toward a retirement fund.
Other types of retirement benefits may include pension schemes or profit-sharing plans. Offering competitive retirement plans showcases an employer’s commitment to the long-term financial well-being of their employees.
Wellness programs have emerged as an important component of benefits administration. They exist to support employees in maintaining or improving their physical and mental health.
Wellness benefits could include gym memberships, on-site fitness centers, incentives for preventive screenings, and more. Employee Assistance Programs (EAPs) can offer free counseling sessions and stress management resources to support mental health wellness.
How a TPA can help
Third-party administrators (TPAs) exist to streamline benefits administration, making it easier for employers to manage claims, save costs, and stay compliant.
An effective TPA will help with:
- Understanding exactly what your employees need and the benefits they would value most. They will be able to dig deep into exactly what benefits will suit your company, rather than taking a one-size-fits-all approach. A TPA will be able to create a customized plan tailored to your exact needs, so you can always get the best value.
- Balancing costs and benefits is a critical piece of benefits administration. TPAs help by showing the company the financial implications of different benefits packages. With their knowledge of the industry, they make sure the benefits are sustainable over the long term and help maintain the vital balance between employee satisfaction and financial viability.
- Clearly communicating benefits to employees is essential to the successful implementation of any benefits package. TPAs are experienced in creating and executing communication plans that employees can understand. These comms will clearly lay out the benefits on offer, the eligibility criteria, and the process for accessing the benefits.
- Getting a TPA involved to help with administration means they can cover administrative tasks such as enrollment, eligibility, ID cards, recordkeeping, and overall health plan management. Employers can spend time on other important daily tasks and have confidence in their healthcare administration.
- Understanding regulations and keeping on top of compliance is challenging. The complex web of regulations related to employee benefits is always changing. TPAs have expertise in local, state, and federal laws, meaning they can ensure compliance with ACA and ERISA, reducing the risk of penalties.
- Finally, a TPA can process claims and resolve issues quickly and efficiently, managing the entire lifecycle, from claim submission to processing and reimbursement. It not only goes a long way toward nurturing employee satisfaction but also prevents delays and inconsistencies that could potentially harm a company’s reputation.
Benefits administration is a complex but highly necessary component in a company’s benefits offering. In order to remain competitive, a company has to support its employees in maintaining their physical and mental health, especially in a world where good health has never been more topical.
A solid TPA plays a vital role in relieving companies from the day-to-day administration of benefits, and it can go the extra mile by offering health plan management, user-friendly technology platforms, and a dedicated account manager.
As a result, a business can always have confidence that it’s offering the best benefits for its people.
Do you want to talk about how we can help with benefits administration? Get in touch with us today.