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TECHNOLOGY Simplifying the delivery of employee benefits OnlineBenefits provides communication tools to help brokers serve client needs By Len Strazewski
When a commercial client talks, the client’s agent or broker has to listen; and when a client asks for a value-added employee benefits service, the broker must try to provide it—even if it is not a usual part of the renewal package. “Our client told us that for the next open enrollment period, he wanted to completely eliminate the paper. No forms, no paper files, just online technology. It became a condition of the renewal,” explains Jeff Jones, chief marketing officer of USI Holdings Corp. in Briarcliff Manor, New York. “If we wanted the business—and we certainly did want the business—it became up to us to locate a vendor that could provide the technology and produce this level of administrative service.” One of the nation’s largest brokerage firms, USI has 80 offices in 18 states and a corporate commitment to providing “excellence of value” for middle market and small employers as well as large corporations, Jones says. While the company was founded in 1994 on a strong base of property/casualty insurance premium, a series of targeted acquisitions and a push for employee benefits business has given the company a more balanced book of 60% P-C and 40% employee benefits. “As health care costs continue to increase—at least in the single digits—brokers can count on stable revenue from employee benefits business, a nice offset to dropping property/casualty insurance rates that are subject to the erratic cycles,” he adds. But the benefits business growth has not come easy, Jones notes. “Most medium-sized and smaller employers are seeking more than a broker who can provide an annual premium quotations service. They are looking for the value-added services that can support their growing businesses. “Most middle market employers have limited resources in their human resources and information technology areas, so that’s where they looking hardest for help from their vendors,” Jones says. To secure this client—an employer with 300 lives in the Northeast—USI teamed with OnlineBenefits, Inc. (www.onlinebenefits.com), in nearby Uniondale, New York. Founded in 1997, OnlineBenefits markets an online employee benefits communication service, BenergyTM, which provides employees with an online benefits statement and service center, among other employee benefits administration products. The products are licensed to agents and brokers who customize them for their employee benefits customers.
“When we started the company, employee benefits business was already on its way to becoming a commodity,” President John Gedney explains. “The number of health plans in any given market was shrinking and it was clear to us that agents and brokers would have to do more to distinguish themselves than offer up the same quotes from the same carriers as their competitors. “Our key question was: How can a broker grow his business and continue to meet the growing needs of his clients?” OnlineBenefits Office, the first version of the product that became Benergy, was the company’s first offering. The goal of this first product was to provide agents and brokers with exactly the kind of services USI’s Jones refers to, says Gedney. “Agents and brokers clearly need to expand the range of services they were providing to their clients, and our first product was designed to give agents and brokers a new tool that they could provide along with the insurance marketing services they traditionally provide. It was also designed to provide an effective user experience to employee benefits plan participants by giving them the range of information they needed about their benefit plans.” Renamed in 2001, the employee benefits portal is now used by more than 4,500 employers and remains the cornerstone of the company’s business. Since then, the company has also added Total Access: FSA, a flexible spending account management system with an optional debit card, available for $4.50 to $6.50 per employee per month and Total Access: COBRA, a benefits continuation management tool available for a variable fee, depending upon use. However, OnlineBenefits continues to add services as identified by employers and its agent and broker partners, Gedney says. Earlier this year, OnlineBenefits formally launched an online enrollment module, “Ready...Enroll Express,” which integrates with Benergy. The new product caught the attention of USI employee benefit brokers who had been shopping for an online enrollment system for their demanding client. Gedney says the product is designed specifically to meet the human resources needs that USI’s Jones has identified by eliminating paper-based processing, error checking and enrollment reconciliation and by automating forms processing with automatic form completion from an employee database. “Employers are not adding resources in their HR departments—even when the services they want to provide to their employees demand an additional staff person,” Gedney explains. “Small employers are even more pressed for help and in many cases, the human resources and employee benefits functions are handled by the same employee as payroll.” The module takes the labor away from the employer staff and guides employees through the enrollment process and helps eliminate the errors usually associated with paper enrollment, Gedney says. The program also gives employees access to decision tools to help them make appropriate choices. The employer can use the module to maintain a current database of employees and their choices, use the information from employee choices to analyze enrollments and create reports and improve employee benefit communications through the Benergy portal. Brokers can use the new module for a 60-day open enrollment event for their clients for a $5 per-employee fee and set up the enrollment process using a simple online wizard, Gedney explains. “The 60-day open enrollment effectively serves as a two-month trial for employers before ongoing charges begin, should they choose to continue with the services.” Ongoing charges are 75 cents per employee per month. McGohan Brabender, Inc., an employee benefits specialty broker in Dayton, Ohio, is already planning for its second enrollment period using the OnlineBenefits technology, says David Homan, director of client services and communications. The 30-year old firm has about 90 employees and about 1,200 client employers. The brokerage began using the Benergy portal three years ago and now uses the enrollment system for two clients with 3,000 and 2,000 lives, respectively. “The enrollment system has been well received, not only for its ability to process without paper, but also for its report generation functions which give us and our clients the ability to analyze enrollment and learn from the process,” he says. Also new this year is Real Value Statement, a personalized total compensation statement that aggregates cash compensation, benefits contributions, and tax savings for each employee and is distributed through the Benergy portal. The statement also displays balances for retirement and investment programs such as 401(k) plans, pension estimates and company stock programs. “The statement can represent total wealth derived from company programs, notes OnlineBenefits Chief Marketing Officer Andrew Ceccon. “Once the Real Value Statement is published to the employee benefit communications portal, employees can access it at any time. As an online tool, it is simple to update throughout the year, giving employees the most current information.” Ceccon says employers or their brokers can build the statements by using an online wizard and a Microsoft Excel-based workbook which speeds up the delivery of the benefits statement from a matter of months to as little as a few days. Real Value Statement costs about 50 cents per employee per month and is already in use by more than 500 agents and brokers. OnlineBenefits also provides some products specifically for use by agents and brokers, including Advisor Tools, an online information resource for employee benefits producers. Client Community, an online resource for clients, and AgencyWare, an agency management system designed specifically for use employee benefits producers. Announced in February 2005, AgencyWare is already being used by 30 brokers with large books of employee benefits business and has more than 40 individual users, Gedney says. “Property/casualty agents and brokers have had sophisticated agency management systems available to them for many years to help them track their P-C clients’ sales and commissions, but there haven’t been many systems that are designed specifically for employee benefits,” Gedney says. “As brokers build their book of employee benefits business, they may have the need to track a hundred or more clients and a wide range of carriers providing various benefits. AgencyWare is a Customer Relationship Manager that is designed for the flexibility that employee benefits business demands.” The new system, designed originally by Captiva Systems, a company that was acquired by OnlineBenefits late last year, integrates sales, service and commission tracking. The database can be accessed online through the Internet for accurate account information from any location, Gedney notes. Agents and brokers pay $1,000 per month for a basic partnership that includes the Advisor Tools and Client Community services and $250 per month for the first five users of AgencyWare. * For more information: |
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