J.D. Edwards EnterpriseOne Benefits Administration
You use the Benefits Administration feature of Human Resources to implement and support benefit packages for the employees in an organization. The Benefits Administration feature enables you to enroll employees in the benefit plans that the organization offers. You can end enrollment whenever employment ends or the organization changes benefit plans. You can also add new benefit plans, change the cost of current plans, and remove old plans from the system.
After a company has determined which standard, government-mandated, and supplemental benefits it will incorporate into its benefit package, benefit professionals must administer the plans. Record keeping for the plans can be time consuming, and it generally involves interaction with health insurance companies, unemployment insurance offices, and pension plan administrators. Many companies hire a third-party administrator (TPA) to assist in administering the plans, maintaining plan compliance, and submitting regulatory reports to the appropriate administrators.
In addition to maintaining the benefit plans, benefit administrators must enroll employees in these plans. Many factors, such as eligibility requirements and enrollment periods, affect how employee enrollment is administered. Most benefit plans have eligibility criteria—such as age, length of service, and employment status—that employees must meet before they are permitted to participate. For example, a pension plan might stipulate that for an employee to participate in the plan, the employee must be at least 21 years old, work a minimum of 20 hours per week, and have been employed by the company for at least one year. Sometimes the company decides these eligibility requirements and sometimes the company works with the plan administrator to decide the requirements.
Some benefit plans contain open enrollment or re-enrollment periods. Open enrollment refers to a time during which employees can change their benefit coverage or begin enrollment in a plan in which they were not previously enrolled. If an employee makes such changes outside the open enrollment period, waiting periods might be required before the changes take effect, or employees might be prohibited entirely from making changes outside the open enrollment period. Re-enrollment occurs when a plan is based on a specific time period, typically one year. Employees must re-enroll in that plan annually. During the re-enrollment period, employees can sign up for different coverage than they had previously.
Frequently, annual re-enrollment periods are associated with cafeteria plans or flexible spending account plans. Cafeteria plans—often referred to as flexible benefit plans—are an effective way of allowing employees to choose benefits that are useful to them. Employees select from a group of benefit options and pay for only those options that they select. This method of selecting benefits represents a cost savings to both employee and employer because both pay only for benefits that the employee uses. Generally, employers grant employees a specified number of flexible credits that they used to pay for the benefits that they select. Each benefit option has a flexible cost, and that cost is deducted from the total number of flexible credits granted to the employee.
When an employee does not have enough flexible credits to pay for the benefits that the employee selects, the excess amount can be deducted from the employee's payment through payroll deduction.
When an employee has more than enough flexible credits to pay for the benefits that the employee selects, some employers allow the employee to use the excess credits in one of these ways:
Receive the excess amount in the form of a taxable addition to the employee's pay.
Use the excess amount for other life needs, such as tuition expenses, weight-loss programs, smoking cessation programs, or financial planning expenses.
Some employers do not permit employees to use excess flexible credits.