HR's Role in Benefit Service & Product Provider Contracts

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  • 0:03 Provider Contracts for…
  • 0:35 Examples of Provider Contracts
  • 1:52 HR Benefits of…
  • 3:10 Lesson Summary
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Lesson Transcript
Instructor: Noel Ransom

Noel has taught college Accounting and a host of other related topics and has a dual Master's Degree in Accounting/Finance. She is currently working on her Doctoral Degree.

This lesson examines the role and responsibility of human resources to coordinate service and product provider contracts to offer employee benefits. The lesson explains the importance of product provider contract agreements to the organization.

Provider Contracts for Employee Benefits

Human resource leaders are experts when it comes to attracting and acquiring top talent for their organizations. Human resource leaders are also experts at managing employee engagement and retaining employees. However, there are some programs and services human resource leaders find easier to outsource to another company. When organizations outsource specific services to other agencies, they use product provider contracts. Product provider contracts are agreements between the employer and another company that specializes in specific employee benefit programs.

Examples of Provider Contracts

Meet Jane, a human resource specialist who works to find outside organizations that provide special services to benefit employees. Jane is looking for a company to offer a health and wellness program that will promote awareness of the benefits of daily exercise and offer an incentive to her employees to participate in exercise programs. Jane discovers a company called Wellness 101 that meets her needs. Jane and the representatives from Wellness 101 create a product provider contract that outlines the service Wellness 101 will provide to the employees within Jane's company.

Under the product provider contract, Wellness 101 agrees to be held responsible for any mistakes with reporting. The company also agrees to provide promotional programs to Jane's employees, such as exercise and weight loss programs. Jane also wants Wellness 101 to incorporate an incentive program that offers a discount on employee monthly health premiums if the employees participate in a certain number of exercise programs.

Jane is happy that she was able to work out an agreement that will be beneficial to both her company and the employees of the organization. Wellness 101 will provide employee access to their health and wellness website and will also take care of tracking all the discounts that Jane's employees will earn. Wellness 101 will report the discounts to Jane's company and Jane will work to give each employee the appropriate discounts each quarter.

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