Customer Stories
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Nevada's Carson City School District Gives High Marks to
Computer-Driven Benefits Program
The era of computer-driven benefits administration has arrived and one Nevada school district has taken the lead in delivering a state-of-the-art program to its 1,000-member workforce. Fueled by the trend toward “consumer-driven” benefits, where employers make contributions that are allocated toward different programs, a “computer-driven” infrastructure had to be in place before the Carson City School District’s benefits administration program could evolve in this direction.
According to Art Brooks, Vice President of Sales, at Hawthorne Benefit Technologies, creators of the BeneTrac online benefits administration system, “A computer-driven approach to health benefits has the potential to drastically change the ways employers provide and workers receive their benefits packages.” What follows is one school district’s success story in making the switch from a paper-laden system to a streamlined paperless computerized benefits administration program.
Bob Anderson, Director of Fiscal Services, joined the Carson City School District in February 2001. New to school district administration, he brought with him years of computer industry and business knowledge. Anderson said that one of his first charges was to evaluate the efficiency of the administration programs used in the 10-school district, modernizing and improving the efficiency of any antiquated or outdated systems.
The benefits administration system was among the first programs he scrutinized. The CCSD has four labor unions and five classifications of employees. Anderson said, “Our benefits administrator had to manually prepare a census of each employee group for each separate provider -- medical, dental, vision and life. The benefits administration system included retirees and former employees receiving COBRA benefits. Additionally, we were working with a third party administrator (TPA) that added to the system’s complexity.”
The CCSD benefits package includes: high and low premium options for their HMO; high and low premium options for their PPO; dental; vision; life; and FSAs for childcare and medical. On a monthly basis, deductions were pre-paid by employees to the TPA one month, and then any adjustments were either credited or deducted the following month. Says Anderson, “It was an administrative nightmare and it took hours and hours to manage and reconcile each month.”
Concurrent with the district’s evaluation of their benefits administration system, they had enlisted the services of a new insurance broker in January 2002 – Valerie Clark of Clark and Associates. Says Clark, “One of the first things I asked for was an employee census. It took them three weeks to get it to me. That signaled me right away that we needed to look at how they were currently managing their data and probably make some changes in their system. Once we had that conversation, it seemed like what they needed was a mini H.R.I.S. system.”
A committee was formed to manage the implementation of the new benefits administration system. It was determined that the ideal benefits administration system would offer the following components:
• Manage flexible dollar accounts for medical and daycare
• Offer online enrollment
• Provide employees with online access
According to Anderson, “It needed to be web enabled – that was a priority. At the time, we were also considering implementing a benefits program with elective contributions. The elective contribution portion was not passed by the district’s unions in time to be administered this year, but it will be a consideration in the future.” Clark said, “Timing was an important consideration.
If a new system was going to be installed, it had to be ready for implementation prior to the start of the open enrollment period on May 1. There was also a staffing concern. To administer all the paperwork that would have been required by a ‘manual’ open enrollment, the CCSD would have needed additional personnel, an added expense.”
That gave the CCSD about eight weeks to finalize their decision on a service provider and to have the system fully ready for Open Enrollment by May 1 and fully operational by the July 1 effective date.
Clark summarized it this way: “From the start, we had a strong desire to get from Point A to Point B. Point A was a paper-laden, outdated system, and Point B -- as we envisioned it -- would be an easily managed state-of-the-art paperless, web-based system. So, all parties – the school district, our staff and the service provider – would have to work together to find a solution to a big problem.”
The committee members did their due diligence and evaluated presentations from three companies. Clark, Anderson and CCSD’s Benefits Administrator Barbara Aguilera, who would be in charge of overseeing and implementing the new program, grilled presenters about their experience, price, capabilities and program features.
According to Clark, “In the end, the BeneTrac team had more flexibility, more ability to personalize and customize the program, and more experience in delivering the finished product. They really were the ‘clear winner.’” With less than six weeks to go until their May 1 deadline, all parties sprang into action. The CCSD would undertake what was called a “positive” open enrollment. Even people who were already in the system would be required to enter their information fresh into a specially created computerized program.
Whereas previous open enrollment periods had lasted for five days, the computerized data entry of BeneTrac enabled CCSD to lengthen their open enrollment period to 21 days, allowing 9 extra days at month’s end to review and correct any incomplete entries. It was decided that a group enrollment session would be held at each of the district’s10 schools and one at the administration offices. There were 11 school site sessions in all, and if those sessions were still not suitable times, enrollees had the option of either enrolling from home or making an appointment to enroll one-on-one at the district office.
Prior to May 1, information packets were distributed to CCSD members to provide them with plan information in advance of their enrollment date. At the 2002 enrollment session, only one page of instructions was included, reducing paperwork by thousands of pages and contributing to the program’s overall cost savings.“ At the open enrollment session, everything was available online, including plan descriptions, plan comparisons, booklets, list of providers – everything,” said Aguilera, who added that next year she will skip the pre-enrollment packages and place all the enrollment data online.
The computerized “data” screens that employees used to enroll were created by the BeneTrac team in less than two weeks. To enable BeneTrac to prepare these screens, CCSD and BeneTrac worked together to compile all the data that would be needed by each provider. The end result would be a comprehensive relational database that would contain complete files of employment and benefits information for each employee.
Everything was ready for the first open enrollment a day ahead of schedule, in spite of the fact that the district was running a little behind schedule in finalizing their choices for major medical.
Using the BeneTrac system, enrollees selected their plan options, and validated basic information such as current phone numbers, addresses, dependents, etc. To ensure there were plenty of people to assist with the open enrollment sessions, CCSD, BeneTrac, and Clark and Associates all contributed on-site personnel. According to Clark, “The people who were enrolling were in and out in just a few minutes, and most were very positive about how easy it was. There were some that were resistant in the beginning, but when it was over, they were asking, ‘Is that it? That’s all?’ and they seemed really positive. Some people had even chosen to enroll from their homes.”
Anderson had concerns that some enrollees might be hesitant to provide personal information for use online. Fortunately, that didn’t happen. “For the few employees who did have security concerns, I think they now understand it is safer than having the information go through the mail. The employees control their log-in and password. They can now look at their account online anytime and see group insurance selections, their flexible dollars for medical and dependent care, and link to the carriers and third party administrator.”
At the conclusion of the 21-day open enrollment period, information was verified over a 9-day period and then electronically transmitted to providers. Employees received their new cards the last week of June. “It could have even been sooner, but the company held off on sending them since they didn’t want employees using them before their effective date of July 1,” said Anderson.
“In addition to having more opportunity to share information about options, employees were also able to take an active role in the ongoing management of their particular benefits program,” said Aguilera. “We wanted employees to better understand the importance of their benefits, to be aware of the monetary value of their benefits package, and to take responsibility for making sure that the information contained in their files was correct.”
Administration of the program with members outside of the district was also effortless, according to Aguilera. “We have the same program options, the same drug stores. We are able to provide the same package to retirees within the system who are located in all parts of the country.”
While being pleased at the ease of administration and extended open enrollment period, Anderson does admit that the plan’s implementation was not totally free of challenges.
“One thing that we would do differently next year is to better emphasize to people that the choices they make during online enrollment are going to affect them for a year. Next year, we’ll probably add in some verbiage like, ‘Here is what you have selected. Please make sure this is correct.’ And then we’ll have them confirm it using a button. We want to make very sure that every employee understands the significance of his or her choices. It’s similar to putting a hammer in the hands of the employees, and once the gavel drops, at the end of the 21-day open enrollment period, they must accept, without further ability to change, their selections for a year.”
But challenges didn’t mar Anderson or Aguilera’s assessment of the program’s overall success, and in particular, CCSD’s return on its investment. He says, “As far as a cost benefit analysis, we have immediate payback. Had we not installed BeneTrac, we would have had to manually create 1,000 files. What would that cost? I’m guessing between $10,000 to $12,000 when you include creating the files, labels, and labor. Then we’d have to warehouse them here in the office. With BeneTrac, everything is stored electronically.”
The other advantage to the BeneTrac system is that it now has a powerful relational database, the same type of “mini H.R.I.S.” that Clark had envisioned at the onset of the project. Aguilera said, “The (BeneTrac) system offers a tremendous amount of information about employees. We’re adding in job locations, dependents, medical reimbursement accounts and daycare reimbursement accounts. It has given us the ability to create wonderful reports in real time about each employee and their current benefits. We can compare and verify all types of employment information. As far as the ongoing administration of the program, the district updates the information once a week and BeneTrac forwards the changes to our providers.”
Anderson sees unlimited potential as he finds new ways to utilize the enrollment data. “Our employee information currently resides on an AS400 system that we have in house. The relational database offered by BeneTrac can be used to independently verify information housed on our main computer system. But the real value is in the incredible reports that we can now create. For the first time we now know exactly in real time how many benefited employees are in the system. Barbara can prepare monthly reports on an Excel spreadsheet that detail exactly who is enrolled in each program. There is no limit to what you can do. We are going to maximize reporting and tracking to accomplish our goals through this system for years to come, we have no doubt.”
Technology has more closely linked the world of the insurance broker and human resources professional. As districts see their benefit dollars stretched, they must discover programs and professionals with the expertise on how to best supply a diverse workforce with the optimum benefits package for the buck. New tools within the insurance industry are helping employers to meet those challenges, and for those H.R. professionals who are approaching open enrollment, you may want to start talking with your insurance broker now to see what new products are available to simplify the enrollment process.
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