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If you build it, they will come.
-W.P. Kinsella, "Field of Dreams"
As companies move to establish an online presence by linking their internal networks to the Internet, benefit information is fast becoming a popular offering on employers' intranets.
"There's a lot of money being invested in corporate intranets" as more and more employers try to catch the technological wave of the future, observed Wayne Randolph, a senior consultant in the World Class Human Resources Practice of KPMG Peat Marwick L.L.P. based in New York.
And because employee benefit administration and communication are so easily adaptable to the interactive Internet environment, benefit departments are getting a lot more attention within corporations. "Only training is more interactive in the exchange of information," he pointed out.
"But that's the good news and the bad news," Mr. Randolph said.
While benefits are getting top priority on company intranets, employers need to maintain other forms of benefit communication, he advised.
"Say you don't have to use a PC in your job and you don't have one at home. What do you do?" he queried. "Will we be creating a population of information haves and have-nots?"
Unless an employer can afford to invest in computers for all of its employees, other media-including interactive voice response, kiosks and, yes, even paper-still will be necessary, Mr. Randolph said.
And even though benefits seem to be at the forefront of the online revolution, few employee benefit transactions are being conducted on the Internet, experts say.
One reason is that employers want to reassure workers that online benefit information will remain confidential.
In fact, some employees just this year are gaining the ability to obtain information on their health plans or to check their 401(k) account balances.
For example, more than 1 million employees and dependents of 2,500 California government agency employers can access more than 100 electronic pages of information about their health care benefit programs and pension fund investments on the World Wide Web.
Employees of California Public Employees Retirement System members also can download a special program to estimate their monthly retirement benefit. In the future, they will be able to
calculate a benefits estimate online. Users also eventually will be able
to print a CalPERS form or application from the World Wide Web site, http://www.calpers.ca.gov.
Two other large employers-Rosemead, Calif.-based Southern California Edison and U.S. West of Denver-have been working with Health Pages, a New York-based consumer health magazine and information service, to develop a Web site.
The site, which is located at http://www.thehealthpages.com, designed to help employees make choices during open enrollment, includes plan descriptions and HEDIS performance information. Plans also provided information on their affiliated physicians.
A number of sorting features were built into the site to allow employees to narrow their searches. For example, employees can isolate searches to find physicians who are board certified or affiliated with certain plans.
The site also includes hypertext links to Web sites maintained by the managed care plans the two employers offer.
Numerous health plan providers, such as Guardian Life Insurance Co. of America, have developed Internet-based enrollment systems for employers that buy coverage from them.
"We're looking at a way to educate people in a friendly, consumer-focused way," said Robin Appelbaum, manager of worksite selling and enrollment for the New York insurer.
But, even with today's high-speed Internet communication capabilities, when employees can make open enrollment choices "online," their elections still are being routed directly to the benefit department, which uses a modem connection to deliver the information to vendors in "batches."
Such is the case with Guardian Life's system.
"The key is to give the employee or employer the power to confirm elections," Ms. Appelbaum explained.
Often, billing is being done on "the honor system," with employers calculating premiums themselves based on the number of employees enrolled in a specific plan. The benefit department then issues checks to the various plans based on those calculations.
"All of us a year ago had a vision of a transactional system, but all we could achieve was information access. It's more a look-up than a transaction system," explained Curtiss Butler, director of new media at Buck Consultants Inc. in New York.
"What's new and exciting about what's happening now is the ability to personalize information," he said.
For example, while a year ago employees might only have been able to access generic information about mutual fund performance on their 401(k) fund managers' home pages on the World Wide Web, they now can find out how much they have invested in their individual accounts, Mr. Butler said. "Today we're closer to having transactional systems, and a year from now we'll be there."
"Between creating intranets, linking PCs and Macs and publishing, most employers are now just beginning to give employees the capability to do their own transactions," said KPMG's Mr. Randolph.
By 1998, most Internet-savvy employers will conduct their open enrollment online, he predicted. And eventually every automated employee benefit department will use the Internet to educate employees and to make transactions.
Depending on their level of technological sophistication, employers may be at one of three stages in the evolution of Internet-based benefit administration, Mr. Randolph said.
The first stage is one-way communication, using the Internet or corporate intranet to publish benefit information, such as plan descriptions and physician directories.
The second stage is to personalize information for employees, such as 401(k) fund balances.
The third and most advanced stage is to permit employees to complete transactions online, such as selecting health plans or primary care physicians during open enrollment.
But not all employee benefit information systems can be accessed via the Internet without some sort of software "bridge," according to Mr. Randolph (see story, page 10).
"When Internet technology is brought in-house, it has to be integrated with the other existing systems," such as human resources or employee benefits and payroll, Mr. Randolph explained.
Furthermore, "there are some inherent weaknesses in database access and information management on the Internet," Buck's Mr. Butler noted.
For example, most "calls" for information are being conducted individually via a process known as "Common Gateway Interconnect," he said.
"Every single CGI call is a separate call to the database, so it goes out each time to get information. It doesn't just maintain the connection," he said.
This can make transactions cumbersome and time-consuming.
For example, an employee cannot send out one request to find out how much supplemental life insurance he or she can purchase on each dependent. Instead, the employee first must look up each dependent and then make separate requests on life insurance available for each of these dependents.
CGI is especially inefficient "when you've got 10,000 or 20,000 employees and they all want to access information at once, say at lunchtime," Mr. Butler said. The solution is to access the database with an "Application Programming Interface," which would tell the database management software what kind of information is being sought so that it could go out and retrieve it from multiple sources at once.
Employee benefit information system vendors are developing this type of software, he explained.
As insurers, HMOs and 401(k) fund managers shift to Internet-based applications, vendors also are working on software to create a single point of entry for employers with more than one benefit plan.
Other new entries to the Internet-based benefit communications market are presenting solutions to the problems Messrs. Butler and Randolph cited.
For example, New York-based R.R. Donnelley Financial is getting ready to roll out its "Benefits Selection" product that takes a multimedia approach to benefit administration and communication by combining Internet access with interactive voice response and print materials.
R.R. Donnelley Financial, a unit of R.R. Donnelley & Sons Co., decided to get into the business after participating in a pilot project involving MedAccess Corp.'s Internet-based Health Fair On-Line product.
"They were an employer that used it, and they liked it so much that they invested in the company," said Gene Pettinelli, vp of Lexington, Mass.-based MedAccess. Its site is at http://www.medaccess.com.
Indeed, "by capitalizing on MedAccess's online technology, Donnelley can provide a total communication service that integrates phone, online and traditional paper in the selection and enrollment process," said Lia Spiliotes, vp and director of R.R. Donnelley Financial's Benefit Communication Services group in Boston.
No matter how popular the Internet becomes, a multimedia approach will always be necessary, because "many employees don't have PCs," KPMG's Mr. Randolph pointed out.
This is "just one part of a total benefits communication strategy" that should include other media, such as interactive voice response and print, he warned.