BAS Blog: Arthur Taylor's Journal

Vista: The Good, The Bad and The Ugly

I understand the disdain many people have for Microsoft, but I like the company. I have owned their stock since the mid 80’s (full disclosure), my company uses many of their software products, and I count on their longevity and success to assure continued improvement and support of their products.

Building software used by tens of millions has just got to be incredibly difficult. I am certain of this because I see how users respond to changes in our own software. Even the smallest change in seemingly immaterial elements such as color and font size can trigger user concerns, questions and commentary.

Thus, overhauling the Windows operating system and Office product line must be a daunting task. Moreover, providing support to the hundreds of thousands of software and hardware developers (e.g., Adobe, HP, Dell, IBM, WebEx, etc.) adds even more complexity to Microsoft’s efforts. The permutations of Microsoft and all other “Windows” software developers and hardware manufacturers is mindboggling.

However, my comments above are not intended to spur on dialogue for or against Microsoft. They are merely written to frame my position on Microsoft, so that my comments about installing Microsoft’s Vista and Office 2007 can be read in its intended context.

I have a very functional Sony laptop (SZ260P). It’s extremely light, and powerful enough for the most demanding business and home video editing tasks. Often it is the envy of other ‘Starbuckers’ sipping coffee and keyboarding.  The system came with XP Professional and I installed a litany of applications to support my world. In short, it’s quite the setup to work from home, the road and in the office.

About a month ago, for some inexplicable reason, the SZ bonked. I messed around with it and tried to revive it, but to no avail. I turned it over to the IT department, and a week later the SZ was still flat lined. So, as the weekend approached, I mustered up the mindset to rebuild the SZ with Vista and Office 2007.

Granted, taking on a brand new OS upgrade should be steeped in Google searches and hardware manufacture support site readings. However, like many “guys,” I wasn’t too interested in reading instructions. So, I loaded Vista, choose “Upgrade,” and waited 3 hours (several people told me it could take many hours to upgrade). The result was a system that wouldn’t boot and took 6 more tries before I resorted to performing a clean install. Fortunately, I had copied all programs, downloads, and data to a USB Firelite drive prior to beginning the install.

Since this blog is not intended to recount each step because that is for more technical writers than myself (nor would it even be possible for me to retell the tale without drinking… green tea to sooth my nerves), my intention is to provide some non-techie insight about Vista and Office 2007.

Let’s begin with Vista. Most users don’t knowingly deal with their OS unless they are going to the Control Panel for a relatively controlled system change such as adding or removing software, printers, etc. However, as many of you know, the OS is vitally important. Vista Ultimate is elegant and when I’m using it I feel the same way as when I get my car washed and detailed. There is a renewed freshness and the system, like the car, seems to run better and faster. Other improvements Vista offers include better wireless and printer setup. Suffice it to say that Vista seems to make a positive, recognizable difference over XP.

There has been mention in the media that Microsoft has copied a great deal from Apple. Though I don’t have a lot of experience with Apple computers (even though I own a MacBook Pro and IMac), there does seem to be several similarities with Apple functionality. Frankly, this doesn’t bother me because I am used to practically every product I have seen has copied/similar features from their competitors. For example, the new Lexus 460 exterior looks just like the BMW 7 Series except for the grill and the relatively new Jeep seems to model itself after the ‘square-ish’ Hummer – Hmm.

The difficulties with Vista have centered on incompatible software. For starters, Sony has not published complete software upgrades for Vista on my notebook model. This means that many of the notebook’s features don’t work such as all of the ‘F#’ keys and the built in camera (I used another model’s software and got the camera working). This makes using the notebook quite awkward, for instance, to control volume and toggling between an attached monitor and the notebook’s screen I have to resort to mouse clicking rather than the ‘F#’ keys.

I have also had disappointing experiences with important software programs such as those from Adobe like Photoshop and – unbelievably – Adobe Acrobat. Can you imagine that there isn’t a Vista compatible Acrobat version? Other problems persist with Cisco’s VPN software. My disappointment continues as I use various software programs only to find out that the vendors have not yet issued Vista upgrades. These include Card Scan, Articulate and HP (actually, I just picked up some HP upgrades while in the midst of writing this blog).

I am also finding some quirky operations with Vista. Often, I find shutting down takes quite a bit of time – longer than seems necessary. In fact, the time has been so long in some instances that I have just powered off.

Like Vista Ultimate, Office 2007 is great (albeit with certain caveats)! I installed the “Ultimate” version and really liked the new menu systems, which present tool bars instead of nested drop downs is sensational. Though the menus take a bit of getting used to, particularly to know where all of the regularly used functions are, the learning curve is 95% complete after writing a few documents.

Though I haven’t thoroughly explored Office 2007, I quickly discovered that it stores documents in new formats with new extensions (i.e., docx and xlsx instead of doc and xls).  Therefore, I have found it necessary to set my Preferences to save documents in pre-Office 2007 formats, so recipients of my documents/spreadsheets who don’t have Office 2007 (which is 99% of my staff and clients) can open the documents.

One of the useful programs provided in Office 2007 is One Note. Though I bought One Note long before Office 2007 arrived, it is not as ubiquitous among business users as Word. Though I like One Note, it really doesn’t work well in collaborative efforts.

One disappointment I found is with Publisher. I never used it before installing 2007, but since it came with the package, I’ve been giving it a whirl to write one of my monthly newsletters. Publisher is quite easy to use, but it does not incorporate the updates found in Word and Excel 2007. Thus, its menu systems are the XP-type. This doesn’t cause me any problem, but I can imagine the techies’ disappointment that the Office 2007 style changes are not consistent across the entire suite of products.

The new Office Outlook 2007 is very nice and makes managing email, calendars and tasks more fluid and intuitive than prior versions. The various views associated with Outlook functionality are cleaner and offer many color coding options (perhaps a bit unnecessary).

I have not used Access, Groove or PowerPoint to offer any opinion on these programs. However, a quick glance at PowerPoint seems that it has improved usability, based on the same improvements found in Word and Excel.

Overall, Vista is promising once the software and hardware manufacturers update their programs and drivers. Office 2007 seems to offer more immediate satisfaction since it works with XP and Vista without any noticeable/significant issues.

Section 125: Back to Basics

Section 125 of the Internal Revenue Code permits employees to make their payments for group insurance premiums on a pre-tax basis. By making contributions on a pre-tax basis under the governance of Section 125, employees do not pay Federal Income, FICA, and in some circumstances State taxes on their group insurance contributions made from salary reductions. By virtue of employees' contributions for group insurance premium occurring on a pre-tax basis, their employers also avoid paying FICA and FUTA taxes on such contributions. Therefore, Section 125 plans offer employers and employees significant benefits.

Weekly, we meet with prospective clients who allow their employees to make their portion of the group insurance premiums on a pre-tax basis, in accordance with Section 125. However, what is shocking is that the majority of these organizations? plans are non-compliant. In some instances, the employers have arranged for employees to make their contributions on a pre-tax basis without ever implementing a Section 125 plan, and have done so merely because they have heard that other organizations were doing it. In other situations, employers claim they have a Section 125 plan in place, but do not have any, or do not have updated, documentation. And, in most cases, these organizations have not prepared the required employee summary plan descriptions and nondiscrimination testing. Finally, many of these organizations have not file the required Annual Form 5500.

By way of background, beginning in the mid 1980's group health insurance premiums increased at unprecedented rates until such premiums became highly burdensome expenses. To help manage the rising cost of group insurance, employers began shifting some of the costs to employees. In order to reduce the financial impact on employees resulting from this change in cost sharing, employers implemented Section 125 Plans to permit employees to pay their premium sharing portions on a pre-tax basis.

Section 125 Plan permits employees to choose between cash and eligible benefits. Thus, if an employee chooses qualified benefits in lieu of cash, the employees' payroll deductions for those benefits are made free of Federal income and social security (FICA) taxes (and State taxes in certain jurisdictions). On behalf of the employer, Section 125 provides the benefit of eliminating the FICA and FUTA taxes on employee group insurance premium contributions.

Section 125 sets forth very clear plan maintenance and participation requirements including plan documentation, summary plan descriptions, record keeping, discrimination testing, and governmental reporting requirements.

Second, Section 125 clearly regulates who may participate in a compliant plan. Generally, Section 125 plans are for the "rank and file," as evidenced by the nondiscrimination testing and the exclusion of 2% shareholders of S-corporations and partners in a partnership from participating on a pre-tax contribution basis.

These days, Section 125 is not as highly topical for most benefits specialists as it was in the 1980's and 1990's because "everyone has a Section 125 plan." Underlying this statement is the assumption that any organization that has a Section 125 plan would also be in compliance with its requirements. I suspect that this assumption is incorrect.

This past Friday, one of our sales associates told me about a telephone call she received from a Certified Public Accountant. In this conversation, the CPA was calling us on behalf of his client and a prospective client to our firm. He said that we should, and I paraphrase, "just be able to give his client boilerplate plan documents, so they could have a Section 125 plan and be able to begin accounting for employees premium contributions on a pre-tax basis."

The CPA's comments, we find, are commonplace among many accountants, insurance agents, and benefits specialists. These types of comments are indicative of many organizations' use of the pre-tax contribution benefit of Section 125 without fulfilling its requirements.

There is a great deal more to having a Section 125 plan than just having some "boilerplate" plan documents. In addition to the "boilerplate" plan documents there is a plan adoption process, an employee summary plan description documentation and distribution process, a record keeping requirement, a requirement to limit certain employees from participation (i.e., certain owners, partners and possibly highly compensated employees), a testing requirement to assure organizations provide their employees with fair eligibility to, and receipt of, benefits, and an annual reporting requirement (waived in certain circumstances).

Think of it this way, the government is giving large tax breaks to employers and employees through Section 125; therefore, they have specific requirements and controls in exchange for such benefits. Thus, the tradeoff is tax breaks for maintaining compliance.

If you are the owner of a business or a human resources/benefits specialist, you can eliminate a hidden problem with very little effort and money.

If you are in group insurance sales or support, understanding the requirements of Section 125 can help you develop new, and protect, clients.

Our firm, Benefit Allocation Systems, Inc. (BAS), can bring you into compliance quickly. We can assist you with adopting our BAS FlexPlan Program that provides all of the plan documentation, guidance, Summary Plan Description, nondiscrimination testing, and Annual Form 5500 preparation services needed to bring your Section 125 plan into compliance.

 

 

 

 

 

Don’t Get Stuck on SAP

I think it’s common for business owners to experience feelings of nervousness and trepidation when their competition launches highly visible advertising campaigns.

Here’s a scenario that I think plays out quite frequently: The business owner/leader comes into the office one day without any extraordinary concerns. A sales team member, who is holding an advertisement and has the deer-in-the-headlights facial expression, greets her.   The owner knows something is wrong and yet she hasn’t even taken her coat off.

As the owner and the sales person walk down the hall like two people in a potato sack race, the sales person explains why the sky is falling, which goes something like, “Jean, did you see ABC Competitor’s mass mailing? Do you think we need to get out our own message? What do you think our response should be, if one of our clients calls us about this advertisement?”

As Jean tries to get her proverbial arms around the situation, she has thoughts like “why didn’t we think of this idea? This campaign must have cost a fortune, how can we compete with this? Are we missing out on sales? Are we going to lose clients?”

From this point on, responses vary. However, my take is that appreciation should override concern. First, business development is a long-term process. Second, most people don’t like change, so unless your services are lacking or your prices are avaricious, your clients won’t jump ship just because of the competitions’ promotions. That’s not to say they won’t call with some questions and a “due diligence” effort, but these inquiries are just efforts to reaffirm their decision to choose your organization.  Heck, it’s even good that they called because it gives you another “touch” with your client and a chance to reconfirm your value.

In yesterday’s New York Times, Business Day section, page C5, Kevin J. O’Brien writes an article titled “SAP Plans New Venture for Serving Small Clients.”  This is exactly the kind of article that can give business owners fits; essentially, the biggest player in your space is trying to make a go of it in your market. O’Brien writes “SAP, the biggest maker of business management software, said Wednesday, that it would invest as much as $520 million over two years on an organization aimed at smaller business clients.”

Until recently, I would have seen an article like this and been worried because my company offers some of the same services as SAP – an ASP-based employee benefits enrollment and administration. Theoretically (and I emphasize “theoretically”), SAP should be able to hit the market and clean our clock. Fortunately, over the years, I have learned that generally this is not what happens and that I should embrace this alleged competition as an opportunity.   Moreover, I have learned that an SAP-like announcement and subsequent marketing effort will likely benefit my organization.  Therefore, I have no fear and welcome the looming opportunities.

Huh? Have no fear and welcome the opportunity you ask?  And, my response is a resounding “yes.” Here’s why and how.

First, the SAP-type announcement and its following marketing blitz will educate organizations that otherwise may not be considering business process outsourcing (BPO).  SAP’s efforts will go well beyond any marketing and educational effort we could make; thus, more organizations will learn about BPO then would otherwise know about it.

Second, the BPO market is far from saturated. In fact, many BPO pundits would argue that the market is quite immature. In fact, a survey conducted by the Aberdeen Group titled “Benefits Management System Benchmark Report—2007” revealed the following about human resource-related systems outsourcing:

47% of the respondents still operated manually or by spreadsheet

13% of the respondents automated through license purchase

7% of the respondents automated through subscription (on-demand)

29% of the respondents automated through outsourcing to benefits vendor

These figures clearly indicate that there is tremendous opportunity for the BPO market, and more specifically the human resource system outsourcing market. Based on the mix of companies surveyed the following organizational breakdown occurred:

Small (<50 Employees): 23%

Midsize (50-2500 Employees): 52%

Large (2500-10K+ Employees): 25%

Third, no matter how large and powerful a company may be, it’s a very big country (and world) and no one company can have every sale in its space – not Microsoft, not GM, not Home Depot, and certainly not SAP.

Though the SAP article gets front page business section headlines, there are some pretty tough competitors out there aiming at the SAP who are either already trying their hands at a similar strategy or are getting ready to do so. How about Oracle/PeopleSoft and Microsoft? Do you think these companies are going to let SAP just march in and take the market? I contend: probably not.  And, what about BAS and all the other firms in the space that offer value?

Fourth, bigger doesn’t mean better. Many organizations, big and small, prefer to buy from hardworking, creative, and cost-effective organizations, which in my opinion are the hallmarks of small business capabilities (i.e., less than 500 employees).

Case in point: Yesterday I received a call from a large client (approximately 4,500 employees and 3,500 retirees). The client wanted to find a solution to their employees’ mounting concerned about their new dental insurer’s requirement that employees provide their Social Security Numbers on their claim submissions rather than an insurer issued ID number.  Essentially, their employees are worried about the use of their Social Security Number vis-à-vis all of the issues surrounding privacy and identity theft.

Whether you agree or disagree with the employees’ concerns the important point is that the client’s insurer (one of the largest in the world with remarkable human and financial resources) would not/could not modify their ID cards to eliminate the use of a Social Security Number and replace it with some other unique identifier.

This client called me while I was parking my car to go to a doctor’s appointment. In the fifteen minutes prior to the appointment, our company, Benefit Allocation Systems, Inc. (BAS), came up with the following solution with a five0day implementation timeline:

BAS would design, print, and distribute a letter/ID card combination document for each of the 8,000 insureds that would include the BAS self-service enrollment system – MyEnroll.com – employee-unique ID and other benefit plan descriptive information.

BAS would make a slight modification to MyEnroll.com to generate these ID cards with employee-unique identifiers for each new enrollee and for each employee changing benefit levels throughout the year.

BAS would modify its data exchange with the insurer to include our unique ID, so the insureds could use this ID number rather than their Social Security Numbers.

In short, we were able to deliver a very agreeable, workable solution that the client greatly appreciated and which the massive insurer couldn’t/wouldn’t implement. Therefore, we have a real example where small business outshines big business by bringing real value.

As another example, several years ago a local competitor of ours hit our local market with a mass mailing campaign that included a letter and what I’ll call a “desk gizmo” (a.k.a. ad specialty) that was quite substantial and included the competitor’s name, phone number, and logo.

Since we had received the mailing, we assumed that their mailing was quite broad and could have possibly reached some or many of our clients. Of course, we were nervous. However, in the end, we did not receive one call from any client about this competitor, and we did not lose any accounts to this competitor. In fact, and quite surprisingly, we did get some inquiries from prospective buyers who wanted us to quote our services as a competitive comparison to our competitor’s quotes.

Thus, we got in the mix to quote business without evening lifting a finger (or spending a nickel). This taught me that even a competitor’s marketing effort can be helpful and not nearly as harmful as may be perceived, initially.

Yes, SAP’s new direction will pose competition, and therein lies the opportunity. Yes, we may need to take note and make adjustments to remain competitive, but, there is no need to get stuck on SAP.

 

Yahoo! Friday’s Theory Becomes Monday’s Reality

This past Friday, I met with our newest hires to supplement their training with a brief, ethereal explanation of our organizations’ “Customer Service Philosophy.”  The goal was to instill in these new hires an appreciation – not just an understanding – of the “philosophy” that has been our hallmark since our first company’s start in 1963 and that continues today.

Our philosophy is the antithesis to MBA-like management and metrics that are the underpinnings of so many large organizations’ customer service call centers.  At our companies Taylor & Ochroch, Inc. (www.TandO.com,), Benefit Allocation Systems, Inc. (www.BASusa.com) and (Cobra Control Services, LLC (www.CobraControl), we strive to deliver empathetic, supportive customer service without the time measurement practices that pressure call center agents to get on and off calls as quickly as possible.

We don’t have any policy about length of time on calls supporting clients. Though we maintain metrics on call center activity, its primary use is for client reporting. Interestingly, we have never needed to use this information to manage our call agents’ call time.

I explained to this group that we want them to do anything nice and honest that they can for callers, they looked at me quizzically. In fact, they volleyed back comments like “other places I worked wanted us to close calls out as quickly as possible.” I explained that I didn’t care how long their support calls took - as long as they try to exceed their callers’ expectations as nicely and honestly as possible – regardless how minor the call topic.

So Friday’s work day ended, and I was confident that our group of new hires had a good appreciation for our customer service philosophy.  In short, I confirmed that they are empowered - without fear of managerial reprisal - to be nice, supportive, and patient.

Though I delivered my philosophy message with, what I considered confidence, there was one slight uncertainty playing itself out as a question in my mind – “how long can this philosophy realistically last as our companies grow?”  Unbelievably, and I think fortuitously, I got my answer when Yahoo called.

On Monday January 22, 2007, I had an approximately two hour telephone conversation with my first Yahoo account representative – Richard Janigian.  The call was preceded with a barrage of emails initiated by my online sign up for a Yahoo ad account, which was followed by Rich’s emails welcoming me to Yahoo and instructing me to read the account agreement, in order to initiate my account.

I interpreted Rich’s emails as stock, auto-generated emails that Yahoo generates to millions of other Yahoo advertisers (wouldn’t you have).  It was as expected; just the well executed use of data automation.  Well, my interpretation couldn’t have been any more wrong!

During my phone conversation with Rich, I had a difficult time paying attention because I was so taken by the enthusiasm of a multi billion dollar company’s representative, for helping me understand search engine optimization and search engine ads.  My mind kept wandering to our own customer service practices in comparison to what I was experiencing with Rich.

I was stunned by the depth of information that Rich provided me without ever making me feel like he had somewhere else to be, that he was tiring of “this conversation again,” or that he was on the clock.  Wow, how can a company the size of Yahoo provide such personalized service (this question goes out to most companies in most industries; in particular, the airlines)?

Yahoo! Friday’s theory became Monday’s Reality.  The exact type of customer service I expect from our team was embodied by Rich at Yahoo!  The fact is Rich proved that a very large organization can make great profits and still buck the conventional, metric-based formulary constricting most call center/customer service quality!

Thank you Rich for showing us the way – in more ways then one!

 

Almost Better than that Dipping Sauce that Comes with an Order of Chinese Steamed Dumplings

After a two day hiatus I’m back (my apologies to those of you who mentioned missing my daily posts.  Things got busy at BAS and I pooped out before being able to write) .  But, I’m back and I have an interesting new perspective on professional blogging.

Prior to embarking on writing this blog, I read a few books on blogs to get some topical insight. As I mentioned in my first post “Trying not to dance like Gumby,” there appears to be great value in blogging as glimpsed from others’ anecdotal tales.  However, admittedly, I was unsure whether someone (me) musing about human resource, employee benefits and other business matters would end up with a valued blog. Today, I got my answer.

First, as I mentioned above, a few people told me my absence was conspicuous. This was a pleasant surprise; albeit, a warning shot about my new writing responsibility.

Second, I was meeting with our company’s largest product reseller in Pennsylvania (you may contact me for their name).  During this meeting, we had an ancillary discussion about their interest in developing a software application for proposal generation. As a software developer with an staff of full-time developers and having just ended a 1 ½ year outsourcing contract to a software development firm in Mumbai, India, I offered a few learned-thoughts about the complication of the software  development process. And, as though this had been scripted for me, I referred them to my blog's January 15, 2007, posting titled The Kapor of the Missing Deadline wherein I reference a new book about the difficulties of developing software and the ensuing expectations.  And, therein lies the professional blog value - I was able to refer them to credible, topical information that included both my commentary and links to the book's page on Amazon.

My blog was instantly gratifying for me - not quite as good as that dipping sauce that comes with an order of Chinese dumplings - but still darn good.  Without lifting a finger I was able to provide a quick and easy resource to make my very important reseller's life a bit easier.  All he had to do was write down my blog's URL and whammo he can get some insight that otherwise would have probably eluded him.  And, nothing builds relationships like sharing!

Thus, as a novice blogger, blog content takes on a whole new meaning.  I will have to begin thinking about this blog not just as a daily commentary, but as a comprehensive resource for information that will be of value to those who do, and for whom I would like to have, read this blog.

Now the big question is (and I apologize to whomever said this at an insurance convention more than 20 years ago as a speaker; because my father retold me this line and I have never forgotten it [and perhaps I should]) and I modify for this writing: "{...writing this blog is} a little like being Elizabeth Taylor's {eighth} husband on their wedding night... I know what to do, I know how to do it, I just don't know if I will be able to make it interesting. By the way, if you coined this originally, please contact me and I will update this post to credit, accordingly.

In short, it's obvious to me that a professional-oriented blog can be quite valuable provided it encompasses quality, credible information.

The Kapor of the Missing Deadline

Who?  Kapor – Mitch Kapor. Who?  Remember Lotus 1-2-3?  Remember the first PC program you used with 5.25” A and B floppy drives?  Not coming back to you?  Well, Mitch Kapor is the founder of Lotus 1-2-3 the killer software application that enticed most of us into PC use.  And now there is a new book by Scott Rosenberg titled Dreaming in Code that tells about the trials and tribulations that Mr. Kapor and his new company have been facing, in order to develop a new high powered software application.

Now, I haven’t read the book yet and cannot not opine on it (but I will do both); however, over the weekend I read an interesting review By Paul Boutin in the Wall Street Journal, January 13-14, 2007, page P8, issue about Kapor’s book.  The review made me realize that anyone interested in software-based solutions (i.e., In-House Developed, HRO, ASP, etc.) may find Kapor’s book a worthwhile read.  In fact, before embarking on an outsourcing solution of any type, reading Dreaming in Code may help set some realistic expectations about software development.

The fact is, and Dreaming in Code appears to support this contention, that developing feature-rich, workable software is tough.  And, many times, impossible.  There is a plethora of case studies that describe software development projects (i.e., outsourcing, insourcing, etc.) that run afoul for a multitude of reasons – irrespective of how much money is thrown at the project, how sensational the people are on the project, or how good the idea underlying the project may be (for starters search Google “software projects that go bad” to delve into commentary on this reoccurring problem).

Fortunately, at Benefit Allocation Systems, Inc. (“BAS”) we have been able to avoid such difficulties with our development of MyEnroll.com – our Online, On-Demand, ASP solution for Human Resource Administration and Employee Benefits Self-Service Enrollment.  This success is largely in part due to our own employee benefits specialists - who have years of experience selling and administrating employee benefit plans – designing the software rather than starting the design with technologist.

Thus, the practicality of the MyEnroll.com software is a special blend of needs and wants producing solutions that implement quickly and effectively.  It is this functional practicality that gets built in rather than a lost focus over cool, but little used, features.

If you are going to embark on developing a software solution through insourcing or outsourcing, it seems that Mr. Rosenberg’s Dreaming in Code will help you and your team set expectations, or at least minimally, understands the potential development pitfalls.

They Saved over $360,000 Using MyEnroll.com Online Enrollment

I don’t care how much money an organization makes, saving $360,000 is significant. This is what we do every day – save our clients a great deal of money by automating the life cycle of employee benefit plan transactions from hire to retire.

Now, you may be wondering how any 600-employee company could possibly save $360,000 just by converting their employee benefits enrollment process from a manual, paper process to an online, automated process.

Here are the facts: Company A (and I’m changing the client’s name since no organization would want to disclose its financial losses that otherwise are not required to be disclosed) has 600 employees with a typical set of benefit plans including medical, dental, vision, life, and disability plan options. Prior to converting to MyEnroll.com and its online enrollment solution, Company A added new hires, changed existing employees, and separated employees vis-à-vis benefit elections as follows:

An HR Specialist in each of three regional divisions was responsible for calling or e-mailing Company A’s insurance broker with updates on new hires, terminations and changes in elected coverages. Unfortunately for Company A, these notifications were too often delayed or forgotten altogether. The notification process lacked a system of checks and balances to coordinate data between the people responsible for hiring, booking payroll and booking insurance plan elections.

After a few years of this type of inefficient, error-prone processing, Company A's errors amounted to approximately $30,000 of premium inaccuracies - and not in Company A's favor (of course)!

These errors were discovered by our new account implementation team during their regular data reconciliation process.  In short, our team discovered that Company A’s communication and documentation process failed to account for separated employees and changes in employees from employee/spouse and employee/family coverage to employee-only coverage (e.g., due to changes in life events such as divorce).

Furthermore, our implementation process uncovered instances where Company A was paying premiums for over-age dependents (i.e., over age 18 without student status certification), and for  premiums covering divorced spouses even though the employees’ payroll deductions had been reduced to recognize such divorces.  In short, payroll records were generally accurate, but insurer enrollment was incorrect due these reporting and documentation inaccuracies.

Though Company A’s situation sounds unbelievable, the fact is that we see Company A’s type of insurance premium inaccuracies quite regularly.  In fact, The Express-Times wrote on December 20, 2006, that Northampton County (Pennsylvania) overpaid health claims or fees by an estimated $200,000 due to covering dead people and former employees remaining covered when they should have been otherwise removed from the insurers’ eligibility records.

So, why do so many organizations have an underlying problem with non-reconciled insurance premium and payroll deduction records?  The answer appears to be quite evident when one considers an example of a 400 employee company whose HR/Benefits department manually administrates benefits (i.e., they receive employees’ elections on paper and either submit that paper to a third party or process it through the insurers’ web portals).

Let’s set the stage for our example.  Commonly, a 400 employee organization will have employee group benefits including: (1) medical, (2) dental, (3) vision, (4) prescription, (5) basic life and AD&D, (6) voluntary life and AD&D, (7) voluntary spouse life, (8) voluntary dependent life, (9) short-term disability, (10) long-term disability, (11) health care flexible spending account and a (12) dependent day care flexible spending account.  Thus, 400 employees with 12 benefits each (elected or waived) amounts to 4,800 monthly records.

Reconciliations typically occur either manually or electronically between employer’s records.  In many instances, reconciliations occur manually because either the employer’s data is in a format (i.e., aggregated into certain payroll deduction categories) that do not match with insurers’ invoicing layouts or the data is not available in electronic format.  And, even if the data is available electronically, the HR/Benefits personnel may not have the programs to perform the data comparison.

Therefore, in our example, if an HR/Benefits personnel need to manually reconcile premium information, they need to compare their 4,800 records with the insurers’ 4,800 records every month (57,600 records annually).  Imagine one person having to compare its listing 4,800 records with the insurers listing.  Imagine the probable error rate.  Moreover, imagine the research and other follow up work that needs to be accomplished when they discover discrepancies.  This incredibly tedious, time consuming work is not on anyone’s favorites list.

If we take this example on another avenue, imagine that the HR/Benefits personnel process employees’ enrollment applications directly into the insurers’ web portals.  If there are 12 categories of benefit plans, there are probably 5 or so insurers/TPAs.  Thus, the HR/Benefits personnel need to process the enrollments into 5 portals and into the payroll system.  This means they have to logon to 5 different systems.  In short, there is an overwhelming, tedious, and error prone set of tasks, in order to enroll, update and maintain records between the HR/Benefits department, insurers and payroll.

Fortunately for our clients, MyEnroll.com coordinates an organization’s benefit elections data to make sure that its new hires are electronically picked up out of the organization’s payroll system, that core benefits (those benefits provided to employees at 100% employer cost) are assigned automatically, and optional benefit elections are clearly defined online and sent to the insurers and the payroll system for corresponding deductions week after week - without fail.

Additionally, MyEnroll.com manages an organization’s new hire waiting periods, eligibility rules, coverage-specific election rules, evidence of insurability, documentation requirements and client-specific messaging all within a powerful Oracle database designed with centralized eligibility management, COBRA notification and billing, Flexible Spending Account administration, and communication processes.

MyEnroll.com’s powerful mid-year life event module provides clients with highly granular eligibility rules management and employee self-service processing, in order to assure compliance with Section 125 regulations governing mid-year life event changes and an organization’s specific eligibility rules governed by its various Summary Plan Descriptions. Functionally, MyEnroll.com controls employee’s access to changing each and every benefit option, based on an internal matrix of benefit-to-life event rules and includes support for documentation requirements such as notifying employees of birth certificate or marriage license documentation requirements.

MyEnroll.com’s automated separation process assures that all benefits are terminated accurately and completely, that insurers are notified and COBRA/HIPAA notices are sent timely – again, a closed system for assuring complete and accurate processing.

Overall, MyEnroll and BAS enrollment support services provide our clients with unparalleled enrollment accuracies, reconciliations and audit trails, so that their data is accurate and accountable.

Interested in Online, On-Demand HR/Benefits Enrollment and Administration?  Call Benefit Allocation Systems, Inc. at 1.800.945.5513 or visit www.BASusa.com.

Value Your Local Chamber of Commerce (and Participate!)

Since 1986, through one of my companies, Taylor & Ochroch, Inc Insurance Management Services, I have participated in the Phoenixville Area Chamber of Commerce. My primary role has been as the Chamber’s endorsed group health insurance administrator. My secondary role has been as Chamber member and member of the Board of Directors.

As the group health insurance administrator, Taylor & Ochroch has managed the sales and service of Independence Blue Cross Association Group Health Plans for the Chambers members.  Essentially, these no preexisting condition, well-priced plans offer small businesses a broad array of plan design options that would otherwise only be available to large organizations.

As a board member, I have had the privilege to participate in the Chamber’s reorganization and the satisfaction of seeing the good work of the Board lead by immediate past President Bob Ryan (Robert Ryan Catering), current President (Tammy Klotzbach of Campbell Ennis Klotzbach Funeral Home), and Chamber Executive Director Kim Cooley (Phoenixville Area Chamber of Commerce) culminate in remarkably strong membership growth and a renewed sense of community.

Kim Cooley advanced the idea of holding a “Chamber 101” breakfast for prospective and current members, in order to promote the value of Chamber Membership. 80+ people attended this first Chamber 101 breakfast – a wonderful turn out for 7:30 AM! The event was well hosted by the Chamber’s immediate past President Bob Ryan and his Columbia Station banquet facility.

This first Chamber 101 featured the stand up testimonials of several Chamber Board members including yours truly. My previous day’s preparation for my 5 minute speech took me down memory lane to my first days as a rookie group insurance salesman walking door-to-door in the Phoenixville area to promote our group insurance programs.

I always enjoyed being in Phoenixville – perhaps it was my nostalgic pining for simpler times akin to a Norman Rockwell painting. You see, until recently, Phoenixville was a sleepy little “main street” town with a proud, but fading memory of its glorious steel manufacturing days, so prevalent throughout Pennsylvania until the last few decades.

It struck me that I have been participating in the Chamber for 20 years and that all of the little things we, as a business, have done with this Chamber have amounted to a tremendous level of name and brand recognition. It became obvious to me that “chipping” away at marketing over a long period can be highly successful.

The unannounced theme of my speech, coincident with the assigned speech topic of “Testimonial about Chamber Membership”, was “Participate and you’ll succeed.” Over the 20 years in the Chamber, I have seen hundreds of businesses join and some leave with the complaint that they didn’t get anything out of their membership. In retrospect, I see that membership worked for me and Taylor & Ochroch, Inc. If a member of a Chamber really takes participation seriously, company and product branding, awareness, and reputation will all become well expanded and entrenched.

However, it has only worked for us because every year, without fail, we participate.  This participation takes many forms including, but not limited to:

Buying an ad in the annual dinner ad book Participating on committees (something we have at least one employee do) Participate on the Board (something that ownership has done on and off – subject to election – over the years) Sponsored the annual golf outing (though this is relatively expensive, there are many other levels of golf sponsorships that bring good recognition at extremely affordable costs) Attend monthly Chamber breakfast events (and sponsor the video taping and/or the breakfast itself) Attend monthly business card exchanges Attend the “grand opening” of members’ businesses Provide ad specialties (i.e., logo coffee cups and other items) for the new member tote bag

In the scheme of advertising and marketing, these participation opportunities may seem trite; however, there is no doubt that consistent, long-term participation works.  Taylor & Ochroch’s name and brand is extremely well known throughout its primary service areas of Montgomery and Chester counties.  And, I am always pleasantly surprised to have this confirmed when I am at an event and meet someone for the first time who says “Oh, you’re with Taylor & Ochroch the chamber health insurance program….” It’s like anything good in business – it’s about execution!

Try Not to Dance Like Gumby

This is not about golf, but golf is where the story begins.

Late fall is a great time to play golf. In the Northeast, the golf handicap/score tracking systems are put into hibernation until the dogwoods bloom again and, instantly, the game seems easier to play – go figure.

In late October 2006, I was having Sunday breakfast with one of my regular Sunday golf buddies who brought his nephew in-law-to-be – a 20 something “yout” – to fill in for the round. We made our cursory introductions at the breakfast table and I posed the typical obligatory questions “where do you live,” “what do you do for a living,” etc. This yout’s answers really caught my attention. In particular, what he did for a living.

Brian was a clean cut, unassuming, young professional who designed products. You know, CAD/CAM Design. This was a nice change from the cliché doctor, lawyer and insurance agent (especially on the golf course).  I asked him what type of products he designed and he explained his specialty focused on containers such as cosmetic bottles and tubes. So, I asked for whom he worked and he answered he worked for himself out of his New York apartment.

Wow, was I surprised!  Immediately, I queried how he, as such a young man in business, was able to attract clients and he said by blogging.  He explained that through blogging he was able to attract a very large, prestigious client. He further explained after his success with his first big account more blogging quickly attracted an even bigger account – one of the largest cosmetic firms in the world. Ok, you don’t have to tell me twice!

Now here I am the 45-year-old President and CEO of a successful high-tech, ASP-based software development and support service family of companies – Benefit Allocation Systems, Inc. (“BAS”) www.BASusa.com, COBRA Control Services, LLC (“CCS”) www.COBRAControl.com, and Taylor & Ochroch, Inc. Insurance Management Services (“T&O”) www.TandO.com – and I’ve been aware of blogging for a while, but this was my first experience with an entrepreneurial, blogging success story – legit and quantifiable.

One of the benefits (or detriments) of running a benevolent dictatorship is you get to make decisions quickly, if you want too. So, before taking my first swing on the first tee, I decided I would begin blogging. It’s taken me a few months to actually get started – primarily because our busy season supporting companies’ annual employee benefits open enrollment with our online, employee self-service enrollment and administration system (www.MyEnroll.com) is in full swing during the last quarter of each year.  But, now I’m in: January 8, 2007.

Writing a first entry in a blog is a little like jumping on to the dance floor and all of a sudden the other dancers take a break and leave you standing there trying to bust a move without looking like Gumby.  Plus, writing about human resources and employee benefits – what this blog will generally focus on hereafter – may not be blog-hip; thus, will anyone other than my wife read this?

Well, time will tell. I think there is good information to share like how our firm just saved a 600-employee organization more than $250,000 in erroneous employee benefit premiums. I’ll blog about this tomorrow.  And, from time-to-time, I will highlight online benefits administration success stories and important HR/Benefit issues and regulations. I might even opine about some of the fabulous (or not so fabulous) work of organizations in other industries. Regardless of the day’s topic, I hope to make your time visiting with me worthwhile. If you feel so inclined, I welcome your comments; however, I reserve the right to review all submissions and will post any relevant, responsible writing.  Good day!

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