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There are three major key issues in benefits administration: communication about the
benefits program, claims processing, and cost containment. Discuss each of them. Also state
which is the most critical and why?
Benefits administration:
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Employees benefits are basically the part of the total compensation package, other than pay
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for time worked, provided to employees in whole or in part by employer payments, e.g. life
insurance, pension, workers’ compensation, vacation. The administration of these benefits
has a significant importance in these compensation plans. Benefit administrators do more
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than plan what benefits to offer and to whom. They must take care of the benefit package that
is in effect. This administrative task consists of communication about the benefits program,
claims processing, and cost containment. We are going to discuss all of them one by one.
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Communication about benefits programs:
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Communication is required to reduce the complexity of the benefits programs and putting
resources to explain it to the employees. Whenever you need to communicate the benefits
programme to the employees and stockholders you have to keep in mind that there are three
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major elements of effective communication. Whenever company is going to launch a benefit
program, it must spell out its benefit objectives and ensure communication achieve the
objectives. The second element that the company should seek for the communication is
appropriate medium of communications. More effective medium will resultant into the huge
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success for the benefit program. Here a factor is required that the message should match with
the medium applied. The possible medium for the organisation are:
– Use of intranet – an internal organizational online Web through which all
forms of communication within the organization can be streamlined
– Streamlined call center operation
The all the possible methods of communication are Employee handbook, personalized benefit
statements, Meetings with employees, Multi-media presentations, Intranet and Streamlined
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call center operation. The third essential element for the communication is the content of
communication. These Content of communications package must be complete, clear, and free
of complex jargon. More the clear contents more the motivation level can be achieved by the
employees.
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Claim Processing:
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Employees ordinarily have to request that benefits be invoked, and it is up to the organization
or others, such as insurance companies, to decide if the request is legitimate. Here the
company has to determine if the act claimed has occurred, the payment is appropriate to that
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person. This work can be time-consuming but does not necessarily require highly technical
skill to perform. Here is the role and technical knowledge of the processor is very important.
The step wise role of processor is as followed:
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– Determine whether the act has, in fact, occurred
– Determine if the employee is eligible for the benefit
–
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Calculate the payment level
When counselling employees who have been turned down for a claim and showing them and
keep them cool for why they did not qualify requires good interpersonal skills.
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Cost Containment:
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It is the process through which a company can best offset the rising costs associated with
benefits, while still providing the best benefit package available for their employees. This is
the reason why some companies look to immediate, short-term solutions, such as raising
deductibles, increasing employee contributions, or terminating some plans for employees
such as retirement benefits. There are four major prevalent practices that major companies
adopt for the purpose of cost containment which are:
1. Probationary periods
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2. Benefits limitations
3. Co-pay
4. Administrative cost containment
Conclusion:
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The administration of benefits is becoming much more important in organizations; staff
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specialists are assigned to this function. Planning out the program is not the only requirement;
control of costs is also becoming a major goal. To maximize the impact of benefit plans,
organizations are developing sophisticated communication programs to explain to employees
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the advantages of their benefits. As all of the above three factors are considered all have their
own significant importance. Failure in the single element of the administration of benefits can
cause the benefit programs to turn down. As I analyse the whole process critically, I found
the communication factor more important than any other elements despite the factor that all
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of the other elements have their own significant importance. It is more important because if
you fail to communicate a clear, free of complex jargon and easy to understand benefit
program, it will be problematic in future. That will cause the failure of the process claiming.
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It will be difficult for both processor and for the claimer that what they are claiming and what
will be the possible benefits they can achieve by the program. Similarly that will be
problematic in such a way that the employees don’t show interest in the program. So if a
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communication of benefit is implemented correctly then the desired objective will be easy to
achieve. Employees’ contribution to the program will be high and their motivation and
loyalty to the company will boost up their operations as they come to know that their own
company is offering them the extra benefits. So the internal mouth of words can increase the
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goodwill, efficiency and the high turnover for a company. Failing to do so can let you down.
So keeping in mind all of these benefits and drawbacks show that the communication about
the benefits has a critical importance for the benefits administration and for the company
progress too.
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References
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Journal:
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Maren, Peter H. (1994). Administering and Communicating a Comprehensive Benefits
Program to All Employees on a Large and Diversified Campus: CUPA Journal, v45 n1 p15-
18 Spr
Book:
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George W. B & Scott A. S. (June 16, 2000). Managing human resources: South-Western
Educational Publishing; 12th edition
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Internet:
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www.wisegeek.com/what-is-benefits-administration.htm
http://management.uta.edu/Dr.Wheeler/5322%20fall%2007/Chap012.ppt
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