JD Edwards EnterpriseOne Benefits Overview
After a company has determined what standard, government-mandated, and supplemental benefits that it will incorporate into its benefit package, benefit professionals must administer the plans. This task can be time-consuming and require a lot of paperwork. It generally requires close interaction with health insurance companies, unemployment insurance offices, and pension plan administrators. Therefore, many companies hire a third-party administrator (TPA) to assist them 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 affect how employee enrollment will be administered, such as eligibility requirements and enrollment periods. Most benefit plans have eligibility criteria, such as age, length of service, and employment status, that employees must meet before they are allowed to participate in the plan. For example, a pension plan might stipulate that for an employee to be eligible to participate in the plan, he or she 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 of 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, generally 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 select benefits that are useful to them. Employees pick from a group of benefit options and pay only for those options that they choose. This method of selecting benefits represents a cost savings to both employee and employer because they both are paying only for benefits that the employee uses. Generally, employers grant employees a certain number of flex credits that they used to pay for the benefits that they select. Each benefit option has a flex cost, and that cost is deducted from the total number of flex credits granted to the employee.
When an employee does not have enough flex credits to pay for the benefits that the employee chose, the excess amount can be deducted from the employee's payment through payroll deductions.
When an employee has more than enough flex credits to pay for the benefits that the employee chose, 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 flex credits.
The JD Edwards EnterpriseOne Benefits system from Oracle provides the tools to manage an organization's benefit plans. The feature provides online integration with other human resources information and payroll processing. With the Benefits Administration feature, you can respond to employees' requests for information about their benefits.
The JD Edwards EnterpriseOne Benefits system has features that enable companies to perform these functions:
Administer plans with varying amount or rate options.
Separate employer and employee portions of the costs of plans and options.
Administer both pre-tax and post-tax benefits.
Track non-cash benefits, such as use of a company car or health club dues.
Determine benefits eligibility based on system or user-defined criteria.
Generate payroll deductions.