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HR Support on Employee Benefits Administration
Editor's Note: Effective benefits administration meets the needs of both the employee and the employer.
Overview: Benefits administration involves establishing, maintaining and managing the full spectrum of employee benefit programs for an organization. More than just ensuring compliance, benefits administration is also concerned with making sure employees understand how their benefits work and what requirements must be satisfied in order to be eligible to participate.
From an operational standpoint, some major functions of benefits administration include: (i) ensuring the legal compliance and overall effectiveness of an organization's benefits program including health, welfare and retirement plans; (ii) negotiating with vendors and recommending benefit plans that align with organizational goals; (iii) communicating benefit plan options to both new and existing employees; (iv) processing additions and terminations to benefit plans in a timely manner; (v) verifying bills and making accurate and timely payments to insurance providers; (vi) making sure payroll deductions are in place for employee contributions to benefit plans; and (vii) ensuring employer contributions are done in a timely manner.
Benefits administration involves balancing the needs of both the employee and the employer. It is important to have programs in place that support the employee that are in line with what an employer can afford.
Trends: The newer requirements of the Patient Protection and Affordable Care Act (ACA), commonly referred to as "health care reform", will challenge HR professionals over the next several years as they monitor developments and adjust benefit strategies accordingly.
Tracy Morley, SPHR, Legal Editor
Latest items in Benefits Administration
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Taxation of Employee Benefits
Employee benefits, such as health insurance, sick pay, disability pay, workers' compensation insurance and retirement savings plans, may be subject to withholding for federal income taxes (FIT), Social Security and Medicare (FICA) taxes or federal unemployment (FUTA) taxes. This section assists HR professionals in understanding how each particular type of benefit plan must be structured and how to properly tax and report contributions, reimbursements and distributions in order to ensure compliance with the Internal Revenue Code.
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Retail Resource Center for HR
XpertHR's Retail Resource Center for HR helps retail employers handle their most vexing employment issues by bringing relevant resources together in one place for easy access.
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Feds Release Additional Guidance on Affordable Care Act's Summary of Benefits and Coverage Requirements
The Departments of Labor, Health and Human Services and Treasury released a set of frequently asked questions on Summary of Benefits and Coverage.
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New Quick Reference Chart on State Health Insurance Exchange Decisions Added
The Affordable Care Act requires every state and the District of Columbia to establish a health insurance exchange. XpertHR has added a quick reference chart that identifies state decisions for creating health care exchanges.
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State Health Insurance Exchange Decisions - Chart
The Affordable Care Act requires every state and the District of Columbia to establish a health insurance exchange, or to default to a federally facilitated exchange operated by the US Department of Health and Human Services. This quick reference chart identifies state decisions for creating health care exchanges.
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High-Tech/Software and Communications Resource Center for HR: Employee Benefits
XpertHR's High-Tech Resource Center for HR: Employee Benefits helps high-tech employers handle their most challenging employment issues by bringing relevant resources together in one place for easy access.
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New Section Added on Maine Taxation of Employee Benefits
XpertHR has added a new section to the Employment Law Manual explaining whether employers in Maine must withhold payroll taxes on health insurance benefits provided to employees' same-sex spouses.
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Taxation of Employee Benefits: Maine
Maine excludes from taxable income health insurance benefits for employees' same-sex spouses and their children.
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Taxation of Employee Compensation
Employees' salary and fringe benefits are subject to federal income taxes, Social Security and Medicare taxes, and federal unemployment insurance tax. However, certain cash and noncash fringe benefits may be offered to employees on a tax-free basis, while an otherwise tax-free fringe benefit becomes taxable compensation to employees if employers do not meet the rules for that particular fringe benefit .This section assists HR professionals in determining which fringe benefits (e.g., company car, health benefits) and other compensation (e.g., bonuses, awards) are taxable or not.
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Sequestration May Impact Federal Contractors
If Congress and the White House do not reach a deal on the sequestration,employers with federal contracts should be prepared to take immediate action to deal with drastic cuts in government spending that will result. Federal contractors should anticipate how the sequestration will directly affect their workplace with respect to complying with Worker Adjustment and Retraining Notification (WARN) Act, wage and hour requirements, benefits and immigration status as well as unions and collective bargaining agreement issues. Employers should also expect possible lawsuits from workers laid off due to spending cuts.
About this topic
HR guidance on effective benefit plan administration.
Benefits Administration: Key Items
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Health Care Reform Resource Center
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Benefit Planning and Design
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Taxation of Employee Benefits
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HIPAA Authorization for Release of Information to Employer for Family Medical Leave Act (FMLA) Purposes Only
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Supreme Court Rules Individual Mandate Constitutional; Withholding of Medicaid Funds to States Is Coercive Penalty