Considerations for Evolving Benefits Administration

July 7, 2015 Zuman

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Benefits administration is a challenge for many organizations because of the complex laws that vary by state as well as the need to offer more competitive benefits within an employee retention strategy.

With the ruling from the U.S. Supreme Court on marriage equality, benefits administration will likely change for most employers. Prior to the decision, employers had to navigate a multitude of laws, which often differed by state. In states that did not already have marriage equality, employers may have chosen to honor domestic partnerships for LGBT employees. Nearly 77 percent of employers have been offering benefits to domestic partners since the 1990s, according to data from Aon​ Hewitt. In general, this trend will likely be positive for employers because it will streamline benefits administration.

Switching the approach to benefits administration would likely reduce costs for employers because it benefits department will need less time to manage paperwork.

How Can Employers Change Benefits Administration?
How to approach the Supreme Court’s monumental ruling depends on whether the organization is public or private and whether it is insured or self-insured. Government entities will need to start extending health care coverage to same-sex partners. Organizations that already offered full benefits may not need to make many changes. Companies that didn’t previously offer these benefits must evaluate their offerings because the risks of not providing equal coverage could be significant. Some may get rid of domestic partnership coverage because it’s easier to just extend marriage benefits for everyone.

One of the big changes will be family leave policies. Organizations may need to revise how they define a spouse. Because the decision happened at the federal level, it will have far-reaching implications in states that did not previously have marriage equality. Employers likely need to review their policies and change any language to make it relevant to the law.

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