Have to be a Gamble!

nervousripSecurity

Nov 5, 2013 (4 years and 3 days ago)

78 views

April 20, 2006

Benefit Administration Doesn’t
Have to be a Gamble!

Rich Gordon


Charon Planning

Janell Lockhart


Opis Management Resources

Patrick Donahue


Saint Barnabas Health Care System

Scope of H&W Administration


Two interrelated components of “administration”



Transactions


Enrollment


Carrier integration


Payroll integration


Retirees


FSA, Parking, Transit


COBRA, Direct Billing



Communication


Personalized communication


Customer service

Environmental Factors Impacting

Plan Administration & Communication


Rising healthcare costs


Cost of inaccurate data and transaction errors is
becoming more significant



Communication/education needs associated
with CDHP, HRAs, Wellness, Rx and Life
Events



Plan complexity


fewer plans but more
employee decisions



Growth of the web and availability of


good web solutions


Communication Channels


Not Great


Carrier booklets, multiple enrollment forms and Word
documents in a folder



Better


Single, consolidated enrollment form and a
consolidated booklet



Best


One
-
on
-
one enrollment counselors


“High touch” call counselors


Personalized, ‘just in time’ web


Communication Solutions

Web Technology



Get started!



Today’s Web penetration is significantly higher than
it was two years ago

and in another two years it will
be significantly higher than it is today



Focus on those who do have access and not solely on
those who don’t



Create a short term strategy to get in the game



Build it and they will come!

NOT


Communication


Web
-
based Technology Solutions



Communication/Education



Imbedded with HRIS or outsource provider technology



Independent 3
rd

party



Online Benefits


Enwisen


Authoria


Workscape


Others

Why Bullish on Web?


Effectiveness


Cost

Source: The Cedar Group, 2005

Business Process

Manual

Cost

Cost with

Technology

Percentage

Savings

Enroll in Benefits

$98.94

$21.79

78%

Review Benefits Summary

$11.71

$3.39

71%

Request Dependent Personal Information

$15.55

$3.81

75%

Request Dependent / Beneficiary

Coverage

$15.55

$3.81

75%

Request Savings Contributions

$5.09

$2.75

46%

Request Savings Fund Allocations

$5.09

$2.75

46%

Family Status Change

$29.45

$11.66

60%

Top 3 Drivers

Outsource vs. In
-
House

1.
HRIS automation tools



HRIS automation has improved


ADP


eXpert, Enterprise, HR/Benefits Portal,
Perspective


Ceridian


eSource, Source


Oracle/Peoplesoft


v 8.x


mySAP


Lawson


Others



Deployment expertise and support is critical

Top 3 Drivers

Outsource vs. In
-
House

2.
Perceived value of sophisticated communication
alternatives such as Web and professional call
center



Short and long term plan design strategy


HSAs, Wellness, CDHC


Employee population makeup


Top 3 Drivers

Outsource vs. In
-
House

3.
Opportunity to take advantage of transactional
efficiencies including human capital resource
allocation, data integration and data cleansing
sophistication. Identify costs for various
alternatives:



Human capital


Technology infrastructure


Technology costs


“Leakage”

Case Study


Opis Management Resources, LLC.



Opis Management
-

Background


Employee population


1,900 employees


80/20 mix of blue/white collar


Predominately female, middle age


High turnover



Administration


Decentralized enrollment


benefit designees


Database maintenance using Ceridian Source 550


Eligibility keyed/fed to various carrier through portals


Carrier billing


reconciliation nightmare

Opis Management

Administration Goals


Long term goal


Web
-
based administration



Short term goals


Reduce time/paperwork of enrollment/activity process


Increase data integrity in HRIS/vendor systems


Reduce premium leakage


Opis Management

Environmental Analysis


Diagnostic process


Tasks performed on day
-
to
-
day basis


Amount of time needed to perform tasks


Corresponding cost for each task


The “why” behind each process



Identified current cost of administration



Enrollment


Response to employee questions


Payroll/HRIS resources


Eligibility transfer to insurance carriers


Carrier billing



Opis Management

Challenges & Weaknesses


Limited resources


Not a lot of people


Not a lot of money



Communication/Technical Hurdle


Benefit designee at each site facilitating enrollment process


Employee population not computer
-
savvy



Multiple vendors


Each with own way of doing things


Multiple forms, photo
-
copying


Keying data into multiple portals

Opis Management

Opportunities & Strengths


HRIS


System in place
-

maximum utilization not realized




Company size


Able to respond quickly


Face
-
to
-
face contact with employees




“Quick fix”


Relatively simple solutions to achieve short term goals

Opis Management

Senior Management Presentation


Presentation to Chief Financial Officer



Delivered objective evaluation



Provided information in an easy
-
to
-
digest format



Presented multiple viable options


Full Outsourcing


Partial Outsourcing


Process Improvements

Opis Management

Key Findings


Assumes a 37.5 hour work week and 2 Corporate employees


Does not reflect time spent by bookkeepers in the field

Actual Hours
(per pay)

Total Available
(per pay)

%

Transactions/Admin
of H&W

60 hours


150 hours

40%

Call Center Activity
for H&W

31 hours

150 hours

21%

Mgmt of LOA and
Disability

25 hours

150 hours

17%

Total

116 hours

150 hours

78%

Administration Impact with

Full Transactional Outsourcing

Hours per
pay

Total Available
per pay

Outsource
%

Current

%

Transactions/Admin
of H&W

6 hours

150 hours

4%

40%

Call Center Activity
for H&W

28.5 hours

150 hours

19%

21%

Mgmt of LOA and
Disability

25 hours

150 hours

17%

17%

Total

59.5 hours

150 hours

40%

78%


With electronic interface, accuracy improvement


Saves 64 additional hours of technical resources annually

Administration Cost with

Full Transactional Outsourcing

Annual

Current

Transactional
Outsourcing

Potential
Savings

Total Human Capital
Expense for Opis

$138,504.94

$69,947.00

Leakage of 1%

$65,000.00

$0.00

Cost of Outsourcing
Solution

$80,000.00*

Totals

$203,504.94

$149,947.00

$53,557.94

* Annual Fee

Administration Impact with
Interfaces & Process Improvements

Actual
Hours


(per pay)

Total Available
Hours

(per pay)

With
Interface

%

Current

%


Transactions/Admin
of H&W

42 hours

150 hours

28%

40%

Call Center Activity
for H&W

31 hours

150 hours

21%

21%

Mgmt of L OA and
Disability

25 hours

150 hours

17%

17%

Total

98 hours

150 hours

66%

78%


Cost of Administration with

Interfaces & Process Improvements

Annual
Current

Carrier
Interfaces

Potential
Savings

Total Human Capital
Expense for Opis

$138,504.94

$121,202.38

Leakage of 1%

$65,000.00

$0.00

Cost to develop and
maintain 3 carrier
interfaces

$15,000.00*

Totals

$203,504.94

$136,202.38

$67,302.56

*
One time fee

Opis Management


Results


Short Term


Electronic data integration with vendors


Single enrollment form


Self
-
billing


Cost savings projections were exceeded!



Upcoming


Online communication site


My Benefits View


Reference tool for benefit designees


Employee
-
based self
-
service solution



Case Study



Saint Barnabas Health Care System



SBHCS

Background


Organizational overview



14,000 full time employees


15,000 benefit eligible employees


37 number of facilities


7 Unions with 4,400 members


3,000+ turnover and 2,200 life events annually

SBHCS

Philosophy


Focus on “three satisfactions”


Patient


Physician


Employee



McDonald’s as template


SBHCS

Background


History



Multi
-
hospital mergers in 1996
-
1997


Many plans/plan designs/vendors


Limited resources


78 HR designees in field locations


Small corp HR staff


9 total/3 benefits & comp


HRIS environment



Peoplesoft


7.5 (55% of employees)


ADP


1.0

SBHCS

Outsource Relationship



1997: Outsourced benefit administration/call center



2000: New H&W vendor



2004: New DC/DB vendor

SBHCS

Administration Challenges/Goals


High level of service



Low and declining fees



Proactive account management



SBHCS

Outsourcing


Enrollment



Paper enrollment kits


Web tools in OE


Face to face for new hires


Call counselors



Carrier data integration


Call center
-

high touch vs high tech


Fulfillment


Managing the outsourced relationship


Managing management expectations


Pitfalls


Successes


Results


Future direction

SBHCS


Lessons Learned

Conclusions



Understand your costs


Create costing models for alternative solutions


Have a short term and long term plan


Scour the marketplace



Outsourcing solutions are not for everyone and are not
‘all or nothing’


Developing a strategic plan


Ensuring that the qualified/expert support is in place
prior to moving to implementation


Thank You!



Questions