Benefits management overview - Human Resources | Dynamics 365 (2023)

  • Article
  • 10 minutes to read

To remain competitive, you must offer a rich set of benefits to attract and retain your best employees. In addition to standard benefits like medical and dental coverage, you might also want to offer expanded services like adoption assistance, recreation programs, and clothing allowances. Benefits management in Microsoft Dynamics 365 Human Resources provides a flexible solution that supports a wide variety of benefit options. Human Resources also includes an easy-to-use employee experience that showcases your offerings.

  • Enhanced benefits plans let you create and manage unique benefit plans and support complex benefit rate tables and nested tiers. You can easily create benefit programs, bundles, and auto-enrollment rules for an easier employee experience.
  • Flex credit programs let you prorate to support retirement and other life events.
  • Extensive eligibility rules ensure you make the right benefits available to the right employees.
  • Online benefits enrollment provides an easy experience for your employees.
  • Qualified life event processing supports future life events.

If you would like to access the demo data, you'll need to redeploy your sandbox environment.


You can now customize Benefits management pages. Custom fields related to coverage rates can be added to the Coverage option page for benefit plans. For more information about working with custom fields, see Custom fields.

Benefits management overview - Human Resources | Dynamics 365 (1)

Enable Benefits management

This article describes how to turn on features in Human Resources. It also explains which existing features in Human Resources are replaced by Benefits management and which features are disabled after you turn on Benefits management.

(Video) D365 HR Part 7: Benefits Management


After you enable Benefits management in a Production environment, you can't disable it. We recommend enabling and testing Benefits management in a Sandbox environment before enabling it in a Production environment. There are significant differences between the legacy Benefit functionality and new Benefits management functionality that require additional setup and should be tested prior to being placed into production.

For more information, see Manage features.

Process overview

The process of configuring benefits involves the following tasks:

  1. Set up required benefit information.
  2. Set up optional benefit information.
  3. Set up benefit plans.
  4. Set up flex credit programs (optional).
  5. Configure required employee information.
  6. Configure optional employee information.
  7. Process employees to determine eligibility.
  8. Employees select plans via employee self-service (optional).
  9. Confirm employee plan selections.
  10. Life event processing (optional).
  11. Rate updates (optional).

Set up required benefit information

Before employees can be enrolled in the plans, multiple components must be set up:

  • Benefit management parameters – These settings are shared across companies. You can set default reason codes, enable the Benefits annual salary option, set a default payment frequency for new hires, and enable life events. For more information, see Set benefits management parameters.
  • Personal contact eligibility options – Personal contacts are the individuals who will be either dependents or beneficiaries of the plans that are set up. Typically, they are children, spouses, or trust organizations. For more information, see Configure personal contact eligibility options.
  • Coverage options – Set up the types of coverage that will be available for a plan. Specifically, define who should be covered, or how much coverage is available. For more information, see Create coverage options.
  • Plan types – Set up the types of plans that will be available when you create a benefit plan. Examples of plan types include Dental, Vision, and Savings. Some important settings on the plan type determine the settings that are available on the benefit plan. For more information, see Create plan types.
  • Eligibility rules – Eligibility rules are used to determine whether an employee is eligible for a plan. At least one eligibility rule must be associated with every benefit plan. For more information, see Configure eligibility rules and options.
  • Payment frequencies – Payment frequencies are required when benefit rates are configured. The payment frequency that is used on a rate helps identify the amount that the employee and/or employer owes on a weekly, monthly, or annual basis. For more information, see Set up payment frequencies.
  • Rates – Rates define how much a benefit will cost either the employee or the employer. If money should be allocated back to an employee (for example, a credit toward a gym membership), a negative rate is entered. For more information, see Configure rates.
  • Tier rates – Tier rates are used when a rate must change based on some criteria. The most common tier rate is a single tier that is based on age. However, double tier rates can also be set up, where the rate might change based on gender, age, or other criteria.
  • Deductions – The deductions are basically the header information/codes that will be passed on to the payroll system to identify the deduction for the benefit. You must set up these deductions, because they will be required on the benefit plan. For more information, see Configure deductions.
  • Benefit periods – A benefit period is the period when employees will have benefit coverage. It's also known as a plan year. The open enrollment periods are also set up here.

Set up optional benefit information

The following components don't have to be set up to create a benefit plan:

  • Programs – A program is a set of benefits that are governed by the same eligibility rules. For example, everyone in the sales department might get a cell phone.
  • Bundles – A bundle is a group of benefits, where one plan must be selected before the option to select additional plans is available. For example, a high-deductible medical plan might be bundled with a health savings account (HSA) plan.
  • Life event types – Life events are events that allow for a change in an employee's coverage. Life event types are linked to a plan type. For example, a medical plan type might allow for changes to plans because of a birth or adoption, or because of a change in marital status. However, an insurance plan type might not allow for any changes because of life events. For more information, see Configure life event types.
  • Waiting days and waiting periods – A coverage waiting period can be set on a benefit plan. For example, a newly hired employee might be able to enroll in a 401(k) only after three months of employment. In this case, the waiting period is three months. Waiting days are used in the waiting period if new enrollments can be processed and submitted to the provider only on a specific day of the month. For example, if 401(k) enrollments can be processed only on the fifteenth of the month, after three months of employment, the waiting period that is set up is three months, and the waiting day is the fifteenth. For more information, see Configure waiting days and Configure waiting periods.
  • Reason codes – Reason codes are used to explain why a benefit might be changing for an employee. For more information, see Set up reason codes.

Set up benefit plans

When you set up a benefit plan, you must complete the following steps before employees can be enrolled:

(Video) Benefits Management Workspace

  • Assign a benefit period.
  • Attach coverage options.
  • Set a valid-from and valid-to date on the General tab.
  • Assign at least one eligibility rule.
  • Set the Allow/continue enrollment field on the Setup tab.

For more information about how to set up benefit plans, see Set up benefit plans.

Set up flex credit programs (optional)

You can use flex credit programs to enroll employees in benefits, based on a predetermined number of flex credits. Employees can choose how their flex credits are allocated. For example, if employees are already covered under their spouse's health insurance plan, they don't have to use their credits for health coverage. Therefore, they might want to use them for other benefits instead. For more information about flex credit programs, see Set up flex credit programs.

Configure required employee information

Before you can enroll employees in benefits, you must provide required information for them.

The employee must have a Position assigned to them. A Position can be assigned to the employee on the Worker or the Position pages byupdating the Worker assignment.

Next, employees must be enrolled in a fixed compensation plan on their start date, or have an Annual benefits salary amount. Prior to assigning Fixed compensation to an employee, a Position must be assigned.


The Fixed compensation start date cannot be before the Position assignment date.

(Video) Dynamics 365 Human Resources Overview

Alternatively, if you have an employee who receives supplemental compensation like commissions, you can add a Benefits annual salary amount from the employee record. Human Resources will use the Benefits annual salary amount when determining coverage amounts, instead of the Fixed compensation annual amount. The Benefits annual salary must be valid as of the employee's start date or the beginning of the benefit period, whichever is latest. However, a position is not required to assign the Benefits annual salary. To enable the Benefits annual salary feature, go to the Human resources shared parameters page, on the Benefits management tab. This feature is turned off by default.


If both a Fixed compensation and a Benefits annual salary amount is entered for an employee, the Benefits annual salary will be used in determining coverage amounts. In the Employment details section of the Worker page, you must select a value in the Benefit pay frequency field.

Configure optional employee information

When you create a benefit plan that uses rates that are based on gender or age, you must enter a birth date and gender for the employee to calculate the benefit cost.

Process employees to determine eligibility

Before employees can be enrolled in plans, eligibility processing is run to determine which plans they are eligible for. You can view the results of the eligibility process in the Process results viewer. For more information, see Process enrollment eligibility.

Employees select plans using Employee self service (optional)

When open enrollment occurs, employees are newly hired, or a life event occurs, employees can select or update their benefits using Employee self service. For more information, see Configure employee self-service.

Confirm employee plan selections

The benefits that employees select must be confirmed before the employees will be considered enrolled in them. Benefits can also be selected on an employee's behalf. To select or confirm benefits, on the Employee page, on the Benefits tab, select Worker benefits plans. To select or confirm benefits for multiple employees, use the Worker benefit plans bulk update page.

(Video) Elevate your HR with Microsoft Dynamics 365 Human Resources

Life event processing (optional)

During the employee lifecycle, each employee might experience various life events, such as marriage, changes in employment, or changes in dependents or beneficiaries. To use life events, you must enable them on the Human resources shared parameters page. Set up life event types and life event options for plan types.

Before you can process life events, you must have run open enrollment at least one time during a hiring time frame. In the United States, open enrollment typically occurs one time per year. Outside the United States, open enrollment might occur at the time of hire. Life event processing doesn't require that workers select a benefit plan. However, the workers must have been included in open enrollment processing. For more information, see the following topics:

  • Process life events
  • Process life event changes
  • Process life event eligibility

After the life event processing is completed and for as long as the life event enrollment period is open, employees can make changes to the plan options that are affected by the life event. Admins can make the changes on behalf of employees. After the enrollment period has ended and no unconfirmed plan types are related to the life event transaction, the transaction is closed.

All the plans that are affected by the life event must be either selected or waived and then confirmed. If a plan isn't selected, isn't waived, and therefore isn't confirmed, the life event transaction isn't closed.

Admins can manually close a life event transaction as required, by selecting it and then selecting Close. If there are unconfirmed plans in the transaction, and an admin wants to close it, closure of the life event might restrict edits to those plans.

Closed life events can't be deleted.

Admins can reopen a life event transaction as required, by selecting it and then selecting Reopen.

Rate updates (optional)

Sometimes, the rate of a benefit changes during the plan period. To update the rates for employees who are already enrolled in the plan, you must process the rate changes. For more information, see Process rate changes.

(Video) D365 HR Part 5: Leave and Absence Management

Help us understand

We want to learn more about how people use Microsoft's custom Help toolkit. Take the survey (in English) and help us understand:


What is benefit management HRM? ›

Benefits management is the specialist discipline of HR that plans and delivers employee benefits within an organisation. Employee benefits are extra compensation or perks given by an employer to a worker on top of their wages.

Is Dynamics 365 human resources free? ›

Dynamics 365 Human Resources: $120/user/month Dynamics 365 Human Resources Self-Service: $4/user/month for employee and manager self-service capabilities.

What is D365 Human Resources? ›

Dynamics 365 Human Resources seamlessly connects your HR and IT functions in the cloud providing a more secure, intelligent and connected platform based in the larges D365 suite from which you can modernise key HR processes like recording leave & absence, maintaining certifications, creating benefit plans, and enabling ...

What HR system does Microsoft use? ›

Human Resources | Microsoft Dynamics 365.

What are the 4 major types of employee benefits? ›

There are four major types of employee benefits many employers offer: medical insurance, life insurance, disability insurance, and retirement plans. Below, we've loosely categorized these types of employee benefits and given a basic definition of each.

What are 5 employee benefits? ›

These benefits typically include medical insurance, dental and vision coverage, life insurance and retirement planning, but there can be many more types of benefits and perks that employers choose to provide to their teams. Many of the benefits employers provide are only available for full-time employees.

Does Microsoft Dynamics 365 have payroll? ›

Payroll 365 is a global payroll solution built on Dynamics 365 for Operations that helps streamline payroll activities and integrates payroll processes with associated business processes.

Does Microsoft Dynamics have payroll? ›

Microsoft Dynamics 365

Payroll 365 is a global payroll solution for Dynamics 365 for Operations that helps to streamline the payroll processes and improve payment accuracy of the businesses.

Does Microsoft have human resources? ›

Microsoft has a wide range of Human Resources opportunities for you to explore.

Does Business Central have HR module? ›

Overview of the employees and their skills

Lessor Human Resources has been developed for Business Central on-premise. Lessor is a certified Microsoft partner, and the HR module acts as a fully integrated add-on for Business Central.

What HCM does Microsoft use? ›

MS Dynamics AX HCM - good tool in MS Office platform

Helped teams to create reports, dashboards, integrate with other Microsoft products, data management, and related tasks.

How does Microsoft use HR analytics? ›

It enables HR leaders to explain and predict the impact of everyday actions and then drive and measure change. Microsoft Graph surfaces data in the Workplace Analytics tool. This can equip you with actionable information which you can use to: Quantify the impact of day-to-day activities by leveraging fresh insights.

What is included in Microsoft Dynamics 365? ›

Dynamics 365 apps and features

Includes Power BI for analytics and visualization, and artificial intelligence tools to identify customer behaviors and provide predictive scoring. Customer Service -- Omnichannel customer engagement tools, customer self-service and communities, and tools for support agents.

How does HRM benefit organizations? ›

An effective HRM allows organizations to tackle human resource issues strategically. HRM supports in attracting and retaining competent employees, helps the organization's leaders and employees in adapting to organizational change, and enables the adoption of technology.

What are the benefits of strategic human resource management? ›

Effective HR management can yield:
  • Exceptional corporate culture.
  • Increased productivity.
  • Enhanced customer loyalty.
  • Greater focus on corporate goals.
  • Better preparation for potential issues.
  • Effective leadership in implementing strategic initiatives.
2 Aug 2021

What are the benefits of human resource planning? ›

Benefits of Human Resource Planning
  • A Better View to the business decision. ...
  • Retaining top talents. ...
  • Addressing the organization's manpower needs. ...
  • Minimum Cost. ...
  • Ensuring that the right people are hired. ...
  • Facilitating expansion programs. ...
  • Training employees. ...
  • Managing employees.
10 Mar 2020


1. D365 HR Part 6: Compensation Management
2. Walkthrough HR Management for Microsoft Dynamics 365
(HR Management for Microsoft Dynamics 365)
3. Latest and Greatest of D365 Human Resources!
(Pakistan User Group)
4. Microsoft Dynamics 365 Finance and Operations Benefits
(Rahul Ingle)
5. Dynamics 365 Finance, Project Operations, and Human Resources 2022 Release Wave 2 Release Highlights
(Microsoft Dynamics 365)
6. HR Management for Microsoft Dynamics 365
(Business Experts)
Top Articles
Latest Posts
Article information

Author: Moshe Kshlerin

Last Updated: 02/12/2023

Views: 5630

Rating: 4.7 / 5 (57 voted)

Reviews: 80% of readers found this page helpful

Author information

Name: Moshe Kshlerin

Birthday: 1994-01-25

Address: Suite 609 315 Lupita Unions, Ronnieburgh, MI 62697

Phone: +2424755286529

Job: District Education Designer

Hobby: Yoga, Gunsmithing, Singing, 3D printing, Nordic skating, Soapmaking, Juggling

Introduction: My name is Moshe Kshlerin, I am a gleaming, attractive, outstanding, pleasant, delightful, outstanding, famous person who loves writing and wants to share my knowledge and understanding with you.