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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. April 20, 2006. Scope of H&W Administration. Two interrelated components of “administration” Transactions

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slide1

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

April 20, 2006

scope of h w administration
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
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
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
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 Web-based Technology Solutions
  • Communication/Education
    • Imbedded with HRIS or outsource provider technology
    • Independent 3rd party
      • Online Benefits
      • Enwisen
      • Authoria
      • Workscape
      • Others
why bullish on web

Manual

Cost with

Percentage

Business Process

Cost

Technology

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%

Why Bullish on Web?
  • Effectiveness
  • Cost

Source: The Cedar Group, 2005

top 3 drivers outsource vs in house
Top 3 DriversOutsource vs. In-House
  • 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 house19
Top 3 DriversOutsource vs. In-House
  • 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 house20
Top 3 DriversOutsource vs. In-House
  • 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
Case Study

Opis Management Resources, LLC.

opis management background
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
Opis ManagementAdministration 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
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
Opis ManagementChallenges & 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
Opis ManagementOpportunities & 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
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
Opis ManagementKey Findings
  • Assumes a 37.5 hour work week and 2 Corporate employees
  • Does not reflect time spent by bookkeepers in the field
administration impact with full transactional outsourcing
Administration Impact with Full Transactional Outsourcing
  • With electronic interface, accuracy improvement
  • Saves 64 additional hours of technical resources annually
opis management results
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 study34
Case Study

Saint Barnabas Health Care System

sbhcs background
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
SBHCS Philosophy
  • Focus on “three satisfactions”
    • Patient
    • Physician
    • Employee
  • McDonald’s as template
sbhcs background37
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
SBHCSOutsource Relationship
  • 1997: Outsourced benefit administration/call center
  • 2000: New H&W vendor
  • 2004: New DC/DB vendor
sbhcs administration challenges goals
SBHCSAdministration Challenges/Goals
  • High level of service
  • Low and declining fees
  • Proactive account management
sbhcs outsourcing
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
slide41

SBHCS – Lessons Learned

  • Managing the outsourced relationship
  • Managing management expectations
  • Pitfalls
  • Successes
  • Results
  • Future direction
conclusions
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
Thank You!

Questions