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 or Obamacare, in addition to the repeal of section 3 of the federal Defense of Marriage Act and the legalization of same-sex marriage in numerous states, will challenge HR professionals in both the short- and long-term as they monitor developments and adjust benefit strategies accordingly.
Author: Tracy Morley, SPHR, Legal Editor
Updated to include forthcoming state developments regarding right to request laws.
The IRS has released a Chief Counsel Advice Memorandum discussing the tax treatment of wellness program benefits and employer reimbursement of premiums provided on a pretax basis under a § 125 cafeteria plan (under the Internal Revenue Code - IRC).
Updated to reflect EEOC final rules on wellness programs, the ADA and GINA.
The Equal Employment Opportunity Commission (EEOC) issued final rules on employer wellness programs, which address employee protections under the Americans With Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
Updated to reflect information on the Patient Protection and Affordable Care Act's maximum annual limitation on cost sharing.
Updated to reflect details on the 'substantially all/predominant' analysis and on the information-disclosure requirements under the Mental Health Parity and Addiction Equity Act.
Updated to reflect the final Summary of Benefits and Coverage template published by the Department of Labor.
An employer with a certain percentage of employees who have consented to a voluntary plan for payment of disability insurance and family leave benefits, must provide written notice to new hires.
The IRS has announced the 2016 annual cost-of-living adjustments made to several employee benefits and taxable amounts, based on changes to the Consumer Price Index. These are the maximum amounts that may be excluded in 2016 from an employee's taxable income for specific benefits.
HR guidance on effective benefit plan administration.