Copyright © 2002 Business Insurance

"Web Transactions a Boon to Reduce Benefits Staff" November 4, 2002

By Michael Prince

NEW YORK -- The Internet continues to make it easier for benefit managers to do their jobs, and that help is especially welcome at a time when many benefit staffs are being trimmed by employers to cut costs.

From automating enrollment and claims processing to providing benefit managers with detailed reports of plan participant activity, the online tools that have emerged in recent years are allowing benefit managers to streamline and simplify their administrative work.

And Web sites that go beyond merely providing information to allow benefit managers and employees to conduct transactions have become standard in recent years.

"Almost any employee benefit Web site worth its weight has all employee data and allows transactions,'' said Scott Japko, director of product management at Mellon HR Solutions in Fort Lee, N.J.

Automated online benefit management tools have been a boon to benefit managers at companies forced to cut staff in the tough economy, said Curtis Peterson, general manager at Ceridian Corp. in Salt Lake City. By using Internet-based benefits applications, benefit managers can "empower employees to take care of their own transactions,'' Mr. Peterson said.

With online employee self-service, "the benefit managers can focus more on strategic issues,'' rather than on administrative tasks, he said.

"Web enrollment is so much more efficient,'' said Michael Kriner, director of pensions and benefits at NCR Corp., a data management company in Dayton, Ohio.

Mr. Kriner said NCR relies not only on the individual Web sites of its benefit service providers but also on the Fidelity NetBenefits Web site, which acts as a portal linking NCR's health care, prescription drug and behavioral health providers, as well as Fidelity's pension plans.

The Fidelity NetBenefits Web site, operated by Boston-based FMR Corp., provides "one-stop shopping for employees and retirees,'' Mr. Kriner said.

Having employees conduct their own transactions is all the more important at a time when many companies are operating with reduced benefits staff, said M.J. Burg, director of health and welfare benefits at printer R.R. Donnelley & Sons Co. in Chicago.

"When you really achieve your economies of scale is to redo the workflow so the computer does the work that a clerk might have done,'' she said.

In addition, Web transactions give shift workers full access to benefit services; in the past, those individuals often had limited opportunities to interact with benefit professionals while at work, Ms. Burg said.

Ms. Burg said that Donnelley uses a site offered by CitiStreet, a company jointly owned by Citigroup Inc. and State Street Corp., that acts as a portal to Donnelley's various benefit vendors.

And Ms. Burg noted that the CitiStreet site is set up to look like Donnelley's own Web site. "What the Web can do is to help you create a more cohesive front-end picture,'' she said.

Health plan automation

Managed care plans in recent years have expanded the capabilities of their Web sites.

For example, the number of managed care Web sites that allow members to check the status of their claims grew to 59% at the start of 2002, compared with 27% in mid-2001, according to a study conducted by Cap Gemini Ernst & Young U.S. L.L.C. earlier this year.

In addition, the number of sites that permit online claims submission mushroomed to 31% from 4% in 2001, the study states.

Health plans have added other applications to aid benefit managers.

Many sites now allow benefit managers to change health plan membership lists as employees come and go, said David Finkel, senior vp of e-business for CIGNA HealthCare in Bloomfield, Conn. Such online transactions cut out "days and days of a paper-based process,'' Mr. Finkel said.

At CIGNA, over 75% of employers use their online tools more than once a year, said David Musto, vp of product management at CIGNA Retirement & Investment Services in Hartford, Conn.

One of the most common benefits-related uses of the Internet is online plan enrollment. According to a report released earlier this year by Hewitt Associates Inc., the percentage of employees that take advantage of online enrollment opportunities has nearly doubled in the past two years.

Among those employers that offered Internet-based enrollment in 2001, 70% of employees elected to enroll online, up from 51% in 2000 and 36% in 1999. Meanwhile, the use of telephone call centers for enrollment dropped to 22% last year from 33% in 2000 and 34% in 1999, the report states.

One benefit of online enrollment is that it makes it easier for benefit managers to keep track of employees who have not yet signed up during open-enrollment periods and to send e-mail reminders to such individuals, Mr. Peterson said.

Benefit managers also can easily determine which plans are attracting employees and which are not, he said.

Retirement applications

Online retirement-planning applications also have been useful. Many companies now offer their employees online applications that permit them to change their retirement investment allocations.

Benefit managers can use such applications to track employees' investment decisions, allowing benefit departments to gauge the efficacy of their investor education efforts, said Michael O'Sullivan, assistant vp of e-business at CIGNA Retirement & Investment Services in Hartford.

In addition, many online applications allow benefit managers to generate up-to-date reports on members' contribution rates and fund elections. "It gives the ability to get the information they want when they want it,'' Mellon's Mr. Japko said.

Other uses

Donnelley's Ms. Burg said that she also visits Web sites run by the Washington Business Group on Health and the Midwest Business Group on Health, which provide information and news articles on health care issues. In addition, she said, she frequents the Web sites of the large benefit consulting firms, to read their latest surveys and research reports.

Vendors that want to attract traffic from benefit managers should ensure that their online tools are straightforward and easy to navigate, NCR's Mr. Kriner said.

Reams of information and services galore aren't helpful if an individual can't figure out how to use the site, Mr. Kriner said. "If someone goes to your site and it's hard to use and not designed properly,'' he said, "people won't come back.''

© Copyright Business Insurance 2001, 2002