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Benefits managers are relying on Internet-based benefit information systems to help them do their jobs more swiftly and accurately, experts and users say.
At the same time, the online programs are reducing employers' costs through the elimination of hidden errors and reduced administrative staff to support benefits functions.
"Benefits managers are being asked to do more and do it faster," said Michael Rudnick, national intranet and portal practice leader for Watson Wyatt Worldwide in Stamford, Conn.
In recent conversations with clients, a leading feature sought from the latest employee benefit information platforms is speed, and it is "something we're hearing more and more every day," said Bill Crowley, vp for Aon Consulting in its outsourcing sales division, who is based in Milwaukee.
Chris Carroll, director of human resources for Austin, Texas-based technology services provider NCR Corp., moved benefits administration online after a series of acquisitions caused the company's employee population to spike in less than two years.
"When you go from 100 to 800 employees in a very short timeframe, enrolling all those employees is a time-consuming process to say the least," Mr. Carroll said. "At the time, we were managing all of our employee data using spreadsheets...and we just couldn't keep up with that kind of volume anymore."
Since then, Mr. Carroll and his HR team have grown to depend on a Web-based benefits management system--which is provided by Norcross, Ga.-based Employease Inc.--accessing it on an "hourly" basis, mainly to manage employee benefits enrollment, as well as billing. "We have links set up between our system and our carriers whereby we are able to do a lot of the flow of billing electronically," Mr. Carroll said.
Another key area in which Web-based benefits management systems can save time--not only for benefit managers, but also for benefit brokers and consultants--is during the renewals process, according to users.
"As brokers, we can extract all sorts of information (from the BMIS) we need for the bid process without having to bother the employer," said Valerie Clark, of Reno, Nev.-based Clark & Associates of Nevada Inc.
Ms. Clark has been offering San Diego-based Benetrac's benefits management system to many of her 250 client groups since 2002, to help move "bogged down, paper-clogged benefits programs to a totally paperless system."
"I can take this information and e-mail it over to the carriers I need quotes from, and it's error free," she said. The data-gathering process for renewals that previously took Ms. Clark at least one week, when she relied on a paper-based benefits system, is now typically completed within a matter of seconds, Ms. Clark said.
NCR's Mr. Carroll noted that having employee data from the BMIS system at his fingertips during renewals is critical in helping his company to best reevaluate its benefits program.
"It helps us have a very educated stance when it comes to our participation levels and what (health plans) the employees are enrolled in or not," said Mr. Carroll.
NCR offers its employees a health maintenance organization, two levels of preferred provider organization plans, and is planning to add a consumer-driven option next year.
Additionally, "It allows us to look at our benefit program," and analyze statistics such as "percentages of single coverage enrollees, family coverage and spouse coverage," and subsequently track the associated costs of those plans on a monthly basis, Mr. Carroll said.
Besides the ease and speed online employee benefit information systems offer, a cost-savings factor often exists too, experts say.
For example, "Too often, a terminated employee remains covered after termination," said Art Brooks, a vp at Benetrac. As a rule of thumb, carriers tend to cap refunds in such cases at 60 days, he said, leaving the employers to pick up the rest of the benefits costs that racks up until the error is discovered.
To eliminate such errors, BMIS systems can be designed to trigger an automatic halt of the medical expenses paid on behalf of employees who are no longer with the company, Mr. Brooks said.
According to Watson Wyatt's Mr. Rudnick, cost savings also lie in the shift over the past couple of years where "employers are not buying software and installing the software inside their companies," but instead, using "software as a service."
The trend saves on internal Internet technology department staffing, as "you're technically renting the software and using it over the Internet," Mr. Rudnick said. "Ultimately, on the cost side, it probably saves some money, because the vendors that host this software are very efficient at it."
Mr. Rudnick has observed that his clients are often able to account for the BMIS systems "as an operating expense as opposed to a capital expense, which sometimes makes it easier to get approval (from senior management) and also, you don't have a huge upfront cost."
Using "software as a service"--where fees are typically charged on a per-user per-month basis--also allows midsize and smaller companies to tap into the technology whereas before it may not have been affordable, experts say.
BMIS systems are "no longer just a playground for large organizations; mid- and smaller-size organizations are using the online tools too," said Aon Consulting's Mr. Crowley.
The biggest barrier to the spread of Internet-based BMIS systems, Mr. Rudnick said, remains "control" and "concern about security."
"More traditional companies might say we want all of our software in our company, on our servers and behind our firewalls," Mr. Rudnick said. For larger companies especially, "cost really isn't the main factor."