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Employers embrace electronic benefit tools

Business Insurance via NewsEdge Corporation :

Interactive employer Web sites are now the principal source of employee benefits communication at many large firms. Many employers have virtually eliminated paper and mail in benefits communication; others use paper and the telephone only to supplement online information.

Employers also send targeted e-mails-with links to information on their Web sites-and conduct benefit Webinars. Some employees are accessing benefit information with their personal digital assistants.

On the horizon, employees will be receiving benefit information on their iPods and reading employee benefit blogs.

Recent surveys document the increasing use of information technology in benefits communication. Watson Wyatt found that 55% of its surveyed employers offer employees Web access to personalized health benefits information.

The survey also found that 24% of health and welfare benefit transactions and 16% of "life events'' transactions such as marriages and retirement are managed online, up from 20% and 5%, respectively, in 2002.

A Buck Consultants survey found that 93% of employers communicate benefits information via Web sites. Eighty percent of those organizations reported that three-quarters of their workforces are online, according to Scot Marcotte, Chicago-based electronic communications leader at Buck.

In their early use of IT, employers "put a lot of static documents on their company intranet, which easily confused people and were not searchable,'' noted Barry Maxon, executive vp of product strategy at Novato, Calif.-based Enwisen Inc., which hosts employer Web sites. "The result was you still had a lot of phone calls going in to the human resources department,'' he said.

Now, information is "far more personalized,'' Mr. Maxon said. "Employees see only what they need to see,'' based on variables such as whether they are in a union. "And we make it dynamic: If the user is asking one question about maternity, we anticipate other topics-such as hospital choice,'' he explained.

Scrapping paper

"There's a trend toward employers using more online media to communicate with their employees,'' confirmed Jennifer Murphy, health care communications leader at Hewitt Associates in Lincolnshire, Ill.

"This is partly driven by benefit plans becoming more complex,'' requiring employees to do more modeling and projections, which is "a lot easier using a Web-based tool rather than a print-based tool,'' Ms. Murphy said.

For example, she said, at enrollment time, an employee can use an online modeling tool to compare the cost of the three types of health plan the employer offers, considering the employee's needs.

"We have seen a steady increase in benefits enrollment via the Web,'' noted J.C. Dominguez, president of professional employer organization operations at SCI Cos., a Tampa, Fla.-based outsourcer of human resource functions for 1,000 firms, including nursing homes, restaurant chains, motel chains and realtors.

"For the convenience of our employee base, we offer phone enrollment too, but we have scrapped paper enrollment entirely,'' Mr. Dominguez said. "We try to be as paperless as possible'' in HR communications, he said.

A good sign of the demise of print in employee benefits is that Norcross, Ga.-based Unisource Worldwide Inc., a leading distributor of paper products that uses the Enwisen system, has put all its enrollment forms on line and is steadily eliminating paper from benefit communications, said Mike Rowell, Unisource's director of compensation and benefits.

"It's a little unique that we've driven away from the paper market, but you do what's best for the business,'' Mr. Rowell said.

About 78% of Unisource's workforce uses online benefits tools, he noted. Twenty-two percent of employees, mainly "transient truck drivers and warehouse personnel,'' still use a telephonic interactive voice response system. But Unisource is considering eliminating the telephone option in 12 to 24 months, Mr. Rowell said.

Employers have begun to communicate employee benefits information and other job-related information through the same channels. "We're seeing a blur these days of the benefits-related Internet and the enterprisewide portal,'' said Buck Consultants' Mr. Marcotte.

For example, he said, a salesperson out on the road may be using a PDA to access sales tools to help with the next client appointment. The salesperson could also use the PDA to search for a network doctor and read an e-mail about a benefit change. "I wouldn't say that was prevalent,'' Mr. Marcotte said, "but it's where it's trending.''

While employers say electronic communication is more cost-effective than print, there is another advantage. "Some things you can't put a cost on,'' Unisource's Mr. Rowell said. "Morale seems to improve when you implement tools such as these.''

Public Service Enterprise Group still provides some material in hard copy to represented workers, "but we make it all available on our Web site,'' explained Charles Miracola, manager of corporate benefits at the Newark, N.J.-based energy company.

PSEG's benefits communications hub provides everything from summary plan descriptions to information about healthy living, financial planning and retirement planning.

One section of PSEG's Web site contains general information for employees, interactive tools and various types of estimators and comparison tools for dental and medical premiums. Another section is a secure site where employees can look at their 401(k) accounts and project their balances into the future, Mr. Miracola said.

Employees can also opt to receive by e-mail all benefits news that's posted on the company Web site.

"We try to keep things interesting-with graphics and animation,'' Mr. Miracola said. For example, there's a counter at the top left-hand corner of the Web site that tracks what it is costing the company in health care benefits. In mid-November, the number had reached $141 million.

Mr. Miracola said that because "there is a certain point where you need to talk to someone''-especially during hiring and retirement planning-PSEG has a benefits center at which representatives take employees' calls and provide assistance.

What the future holds

Many companies now have a chief executive officer or a division-manager blog, a first-person online communication directed at senior management. "I think it would only be logical maybe to have the vp of HR do a blog to employees in the month and a half before enrollment,'' said Michael Rudnick, Stamford, Conn.-based global practice leader-Internet and portals at Watson Wyatt.

Podcasts-or audio on the Internet that can be downloaded onto an iPod or any MP3 player-could communicate explanations of benefit changes. Employees could play the messages at their convenience and even subscribe to regular benefit podcasts on topics of interest to them, Mr. Rudnick said.

At least two challenges to this electronic future remain.

First, employers need to consider their company culture before making transitions to electronic communications, said John Sias, a senior consultant at Curcio Webb in Stamford, Conn. An employer may need to have a service center that will walk employees through an electronic system and show them how easy it is, he suggested.

Second, there's the perennial challenge of getting employees to read employee benefits materials, said Ray Brusca, vp of benefits at Towson, Md.-based Black & Decker Corp. In a test of its weekly benefits e-mail, the company found that 80% to 90% of its employees deleted the e-mail without reading it.

<<Business Insurance -- 12/16/05>>