With work/lifebalance becoming an ever more important part of that relationship, employers areincreasingly looking for ways to deliver benefits that address theiremployees’ everyday concerns, are easily accessed, and also reduceadministrative costs. This may sound like an impossibly tall order, but just asthe Internet has affected virtually every other aspect of the enterprise, it nowis poised to transform the way we administer and deliver benefits.
The notion of movingbenefits administration onto the employee’s desktop is not entirely new. Inits 1999 report “Managing Workplace Technology,” the William Olsten Centerfor Workforce Strategies found that 63 percent of companies surveyed hadestablished corporate intranets, or private networks that are based on Internetprotocols. Another 21 percent were considering their deployment. At thecompanies that had intranets in place, human resources departments were takingfull advantage of them. Almost 70 percent of the survey respondents indicatedthat they post information about health care benefits as well as employeenewsletters on their intranet sites. These were, in fact, the two most popularapplications of intranet technology cited in the Olsten survey.
Intranets can indeedbe useful. They cut down on the amount of paper that has to be pushed around,and they give employees round-the-clock access to timely information about theirbenefits and enrollment information. But intranets do little to address theadministrative challenge of juggling multiple carriers and vendors, and theydon’t maintain themselves. You need an IT department to set them up and youneed an IT department to keep them running.
Hence the growinginterest in integrated benefits portals. These sites, marketed and maintained bya dizzying variety of third-party vendors, take advantage of the global reach ofthe World Wide Web and the familiar interface of the ubiquitous Internet browserto give employees streamlined access to company-sponsored benefit plans. Theservices offered vary from vendor to vendor, but in a typical implementation, anemployee can update enrollment information with the company’s health insurancecarrier, apply for a discounted mortgage loan, and shop for a used car - allwithout picking up a phone or filling out a single printed form.
“We have brokenthe world down into three vertical channels,” explains Tom Jacoby, CEO ofWorklinks, a New York-based creator of workplace portals. “There’s living,learning, and working. It’s a holistic, employee-centric network thatintegrates products and services across the entire bandwidth of employeeexperience, both inside and outside of work.”
The idea ofdelivering a truly integrated beneﬁts portal is, in fact, a relativelynew idea in this rapidly evolving market. Until recently, some vendors focusedon consolidating access to core benefits such as health and retirement plans,while others focused on voluntary benefits such as group discounts forautomobile insurance and legal services. The former charged their clientsdirectly for access to their services; the latter provided free access to theirsites and generated revenue through sales commissions.
iBenefits of ElSegundo, California, is a good example of a firm that, for the moment at least,still specializes in the administration of core benefits.
“Using our system,employees can not only enroll in all of the benefits that the employer provides,but they can also, throughout the year, take a look and really drill down tofind the information associated with their benefits,” says iBenefits CEO JeffGraves. “And just as importantly, as they have life events during the year, webecome the means by which they facilitate these transactions for both the HRdepartment and the carriers.”
In addition tocollecting enrollment information, iBenefits reconciles the bills that come infrom individual carriers and integrates with existing payroll systems tofacilitate payroll deductions. The goal, according to Graves, is to free HRmanagers from the administrative duties that occupy 80 percent of theirattention, thereby allowing them to focus on strategic concerns such asretention and recruiting.
The company chargesfrom $2 to $4.50 per employee for its administrative services, and TeriErickson, manager of employee benefits for Dura Pharmaceuticals in San Diego,believes that this is money well spent. Dura went online with iBenefits on June1, and Erickson thinks the system has been a great timesaver for both herselfand the roughly 1,000 employees she serves.
“Going online isthe wave of the future,” she says. “Our goal was to go online with ourbenefits and do away with as much paper as possible. More than half of ouremployees are scattered throughout the United States, so time is important forus. With paper enrollment you have to wait to get things mailed back and forthand still meet deadlines. If we can get people to enroll online from theirhomes, it saves a lot of time, from both my side and the employee’s side.”
In addition tosimplifying HR administration, workplace portals provide an inexpensive platformfor delivering and consolidating access to voluntary benefits. These includethings like discounted automobile insurance, roadside assistance plans,financial services, and a variety of retailproducts. Large companies have long offered these perks, but this has saddled HRdepartments with the administrative burden of having to negotiate and maintainrelationships with multiple vendors. Companies like Baltimore-based RewardsPlusmarket themselves with the promise of simplification. They negotiate thediscounts, provide employees with a single point of access to a menu ofcompany-approved products, and allow employees to pay for these products withsimple payroll deduction plans. These vendors deliver the benefits at no cost tothe employer, and they roll the payments to the various vendors into a singlepayroll deduction.
Sylvan LearningCenters has been a RewardsPlus client since the summer of 1999. George Skidmore,Sylvan’s manager of benefit programs, likes the service because it fills outthe company’s core benefits program at a very low cost.
“If we can make iteasier for our employees to shop for automobile or homeowners insurance, whynot?” he asks. “It improves how they feel about things and it gives themmore time to spend working. And RewardsPlus takes care of all the administrationand paperwork, so it’s very successful for what it’s costing us.”
Skidmore notes thatin addition to RewardsPlus, Sylvan outsources its core benefits administrationto a third-party broker. The company’s 3,000 full-time and 4,000 part-timeemployees can access that information simply by logging on to the corporateintranet. Hence, Skidmore is able to manage the workload with the help of justone assistant.
Steve Fecko can beforgiven if he looks at this situation and sees one vendor too many crowding thepicture.
Fecko is the seniorvice president of marketing at RewardsPlus, and as far as he’s concerned, theline that once separated voluntary benefits providers from benefitsadministrators is rapidly blurring. Having developed an infrastructure that canhandle the administration of one set of benefits, vendors are finding that it isa relatively simple matter to take on administration of the others. The leap isless technological than conceptual.
“It can all bedone in one place,” says Fecko. “We have the ability to enroll andadminister all benefits. So whether it’s voluntary benefits or whether it’score benefits, we can do all of the enrollment and all of the census and datamanagement online. Plus, we can integrate all of this information into acompany’s ERP and HRMS systems and all the way down to the carrier, whetherit’s an insurer or a healthcare provider.”
Emerging from itsorigins as a voluntary benefits provider, RewardsPlus is aggressively marketingitself as a one-stop HR solution. Coming at it from the other direction,iBenefits’ Jeff Graves expresses less enthusiasm for this level of benefitsintegration. He admits, however, that providing a sales channel will eventuallybe an important part of his company’s services. And aggregating a variety ofemployee-friendly services in one easy-to-use portal is what WorkLinks is allabout, according to CEO Tom Jacoby.
Thus, it appearsthat integration is in fact the wave of the future. And judging by the reactionsof HR managers who have used the services that are currently available, this isa trend that will make life easier for employers and employees alike.
Since March 15 ofthis year, for example, Ericsson Inc. has been using services providedby San Francisco-based Abilizer Solutions, Inc., to deliver a package ofvoluntary benefits that include discounted products and services and classifiedadvertising. Ericsson also uses the Abilizer portal to disseminate company newsand local community affairs announcements.
“It’s reallygood and it saves us a lot of money,” says Shelly Weber, manager ofEricsson’s work/life program. “It allowed us to centralize our discounts.Our employees don’t have to spend time talking to different vendors. We letAbilizer do it.”
Andrea Schuker,human resources manager for Turnstone Systems in Santa Clara, California,similarly praises BeyondWork, a provider of work/life benefits that is based inSanta Clara. BeyondWork provides its clients with the now-familiar menu ofdiscounted goods and services, as well as calendar listings for both the companyand the surrounding community.
“People are verybusy and this is a way for them to take care of some of their outside, personalobligations, getting discount tickets or whatever may be the case,” explainsSchuker. “They can do it in a very quick and efficient manner, so itstreamlines their lives, which means that we’re able to work more.”
Schuker notes thatanother firm, Melita-McDonald Insurance Services and Employee Benefits of SantaClara, maintains a Web site that gives Turnstone employees access to their corebenefit information as well. As the only HR manager for an internationalworkforce of 182 employees, Schuker views online benefits management assomething of a lifesaver.
“I love it,” shesays. “It’s great.”
The only drawbackshe has seen is the same one voiced by other portal users - the initialreluctance of some computer-shy employees to embrace this new way of managingtheir benefits packages.
“Sometimes peopledon’t get it and they come to me thinking that I have all the answers,” saysSchuker. “But I don’t. So it takes a little bit of training to get peopleused to the idea.”
(Another problem forsome is lack of Internet access, according to a survey of 1,000 peoplecommissioned by Xylo Inc., formerly known as Employeesavings.com. More than halfof the respondents said they did not have Internet access on the job.)
The HR managers whohave implemented benefits portals say that once employees get accustomed to theconvenience and services delivered by these systems, they embrace them wholeheartedly. As benefits packages grow ever more complexand the call to hold down administrative costs rings louder, Internet portalsbecome an increasingly attractive alternative to traditional managementpractices. It’s an idea, it seems, that all of us will eventually get used to.
Workforce,October 2000, Vol 79, No 10, pp. 54-61 SubscribeNow!