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What is Benefits Administration?

Malcolm Tatum
By
Updated Jan 20, 2024
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Benefits administration involves the creation and management of employee benefits, as well as providing a means for employees to be trained in understanding how the benefits work, and what types of standards employees must meet in order to qualify for the benefits. Often, benefits administration occurs within the Human Resources department of a larger company, although smaller companies may designate the function of benefits administration to other areas or individuals. Here is some background on what an effective administrator does on a daily basis.

Much of the work of the administrator is devoted to coordinating a benefits plan that is currently in place. Benefits administration involves spending a lot of the day making sure benefit plans are running smoothly. This will often include review of accumulation of personal days, vacation days, and sick days. The administrator will make sure the process for adding days off to an employee’s account is being done according to the company’s defined process. In addition, the administrator will work with the payroll department to make sure that the employee is paid for any approved days taken, and that those days are deducted from the appropriate resource.

Next, benefits administration often involves overseeing the health insurance coverage for qualified employees. This means making sure that payments are made to the insurance provider in a timely manner, as well as ensuring that every qualified employee who wishes to be included in the group coverage is processed properly. The administrator will also be responsible for implementing a benefits plan for new employees who complete the probationary period that many companies require before being eligible to accumulate paid leave and health coverage.

When the employee benefit program includes an investment or retirement program, benefits administration personnel will also oversee the daily functioning of those programs as well. This may involve making sure payroll deductions are in place to help fund any contributions put in place by the employee, as well as ensuring that any matching funds that are promised by the employer are applied in a timely manner. This places the administrator in direct contact with the financial officers of the company, who will work with the administration team for the good of all employees of the company, both hourly and salaried.

Part of benefits administration also involves interaction with the employee. At any given point, an employee should be able to meet with an administrator and obtain the latest information regarding the status of his or her benefits. From this perspective, the administrator is a means of communication between the company and the employee. This may occur by allowing employees to make inquiries when they wish, as well as proactively providing periodic updates to each employee about the status of their benefits.

It is important to recognize that benefits administration is involved in not only seeing to the welfare of the employee, but also the well being of the company. To that end, efficient benefits administration means developing benefit programs that are good for the employee, but do not place undue pressure on the company to meet those benefit commitments. For this reason, administrators are often looking at new options for benefits, attempting to find programs that will provide at least as much for employees, while keeping the cost to employers as low as possible.

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Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By anon342579 — On Jul 22, 2013

I have got a lot of new ideas regarding benefit administration, but most of our companies are ignorant of these ideas since this may be from lack of awareness about it. I believe that this program will make the organization become productive as long as they implement these ideas in a wise manner. --Shambel G., Ethiopia

By robbie21 — On May 17, 2011

@Bhutan - I am sure that benefit plan administrators are wonderful people with the best of intentions. So why is it that at big companies, benefits seem to be a truly enormous headache? "No, you need to call payroll for that." "That's handled in the offsite office."

The smaller companies I've worked at, with just one person doing benefits administration, have had much smoother operations and even some creative ideas. I worked at one place that got everyone a plan with a $3K deductible--but the employee was only responsible for the first $1500. The company then saved premium dollars on the healthy employees who never came close to the deductible.

By Bhutan — On May 03, 2011

I know that many companies offer a health benefits administration orientation every year during the time of open enrollment in the health care plan. They usually tell you the differences or changes in the plan and offer you a few options for you and your family to decide.

I know that the benefits administrators at my husband’s company are great about answering questions because some of the benefits information can be confusing.

The paperwork can seem overwhelming and it is nice that they summarize the information for you.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
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