Explore compensation and benefits capabilities


You are the HR manager for Van Arsdel, Ltd., a bicycle manufacturer and retailer. Although the company generally employs part-time, seasonal, and temporary hires, it also employs several full-time employees. As the HR manager, you need a system that can help you determine which employees are eligible for benefits and how to manage those benefits.

Today, benefits go beyond medical and dental. Benefits might include adoption assistance, recreation programs, and clothing allowances. Dynamics 365 Human Resources supports a wide variety of benefit options for employees. Dynamics 365 Human Resources includes an easy-to-use employee experience that showcases the benefits offered.

Some of the benefits include:

  • Enhanced benefit plans that let HR managers create and manage unique plans and support complex benefit rate tables and nested tiers.

  • The ability to easily create benefit programs, bundles, and auto-enrollment rules for an easier employee experience.

  • Flex credit programs that let users prorate to support retirement and other life events.

  • Extensive eligibility rules ensure HR managers make the right benefits available to the right employees.

  • Online benefits enrollment, which provides an easy experience for employees.

  • Qualified life event processing that supports future life events.

Enable Benefits management

Benefits management is a feature in Dynamics 365 that can be enabled and configured. Benefits management gives HR managers the ability to set eligibility rules and options, life event types, deductions, waiting periods, and other benefits-related tasks.

Set up employee information

Before employees can be enrolled in benefits, HR managers must provide required information. Employers must enroll an employee in a Fixed compensation plan (an employee's regular gross salary or wages) on their start date and must select a Benefit pay frequency in Employment details on the Worker form.

Rates define how much employers and employees contribute for a benefit. When a benefit plan that uses rates is created based on gender or age, a birth date and gender must be entered for the employee to calculate the benefit cost.

Set up Benefits management

Before benefit plans can be created for employees, HR managers need to configure options for the plans.

  • Set Benefits management parameters: These parameters set default values, reason codes, and other options.

  • Create eligibility rules and options: Eligibility rules define which employees can enroll in each benefit plan. You can create eligibility rules, bundles, periods, and programs that will be associated with benefit plans, and then assign employees to benefit plans. Then, you can process enrollment eligibility to see which employees are eligible for each plan.

  • Create personal contact eligibility options: Creating types of personal contacts, such as beneficiaries or dependents.

  • Create coverage options: Coverage options are levels of coverage for a participant's election in a benefit plan or program. Once defined, benefit coverage options can be reused. Options can be associated with one or more plans. For example, coverage options could include Employee Only for a medical plan or 2x Salary for a life insurance plan.

  • Set up payment frequencies: Payment frequencies help calculate the annual benefit salary, determine the benefit premium amount an employee pays each pay period, and establish how often providers are paid.

  • Set life event types: Dynamics 365 Human Resources uses life event types to define events when it is valid to update employee benefits enrollment. For example, getting married or having a child.

  • Create plan types: A plan type is a high-level grouping of specific types of benefits. Each plan type has a code that determines rules for the plan type. For example, the Basic life plan type would have the plan type code Life because it is a kind of life insurance plan and must conform to rules established for the Life plan type code. Another plan type might be Supplemental life, also with plan type code Life.

  • Set up reason codes: Reason codes explain why an employee’s benefits are changing.

  • Set up tier codes: Tier codes are benefit rates paid by employees and the employer. An unlimited number of tier codes and set up rate calculations can be defined to meet the needs of the company.

  • Define rates: Rates define how much employers and employees contribute for a benefit. The value can be an amount or flex credits, depending on user configuration. Use rates to determine how much employees and employers pay for each benefit based on several factors. Coverage rates are date-effective, so users can keep a historical record of rates.

  • Set deductions: Use deductions to determine how much, if any, to deduct from an employee’s paycheck for each benefit. Deductions are date-effective, so users can keep a historical record of deduction information.

  • Set up waiting days: Waiting days establish a monthly milestone to use for benefit plans. For example, a waiting day of 15 represents the 15th day of each month.

  • Set up waiting periods: Waiting periods establish a milestone to use for benefit plans. For example, three months from hire date, the first of each month, or six months.

  • Set up rounding rules: Users can set up rounding rules to meet the needs of their organization. Rounding rules are set up to be applied to numeric calculations in functions within the business application.

  • Create employment categories: Set up employment categories to match workers. For example, specify values for Worker type, Employment category, and Description.

  • Set up employment types: Set up employment types to match workers, such as specifying values for the employment type and description of the employment type—for example, Employee or Contractor.

  • Create employee self-service: Configure tiles for top-level navigation in Employee self-service. Benefit plan tiles direct users to benefit plans they are eligible for.