From BLR's Best Practices in Compensation & Benefits

Open enrollment. For human resources people, the words may conjure up images of exhausted employees buried beneath stacks of papers, working late into the night; mounds of forms that must be returned to employees for corrections ("You're designating your cat as beneficiary?"), and piles of enrollment papers yet to be reviewed for accuracy.

If any of this sounds familiar, you may be interested to know that there is an alternative. You've probably heard about automated online enrollments, but maybe you're a little nervous about making the switch. We talked with Kevin Haugh of ProAct Technologies (www.proacttechnologies.com), an expert in the field, and got some advice that can help you.

According to Haugh, there are two primary reasons to automate your enrollment process. One is cost. "A lot of employers today still do a lot of their benefit communications and enrollment in a very manual way," says Haugh. "When you think about all the things that go into providing benefits and communicating them to people, it's a tremendous cost. You create documents that describe the benefits, have them approved, train and educate employees in what the benefits are, make sure the elections are processed correctly, and so forth. There is a whole set of things that companies have to do in order to get people aware of and enrolled in their benefits."

Better results, less money

Often, though, cost is not the primary reason to automate the process. "This is about trying to find a more effective way of doing things," Haugh continues. "And that means not just doing it cheaper, but doing it better." Rick Jenkins, director of compensation and HRIS at Rexel, Inc., agrees. His company implemented a technological solution during their last open enrollment. The prime motivation, he says, was not financial, although he anticipates the move will save the company money. "We knew from experience that open enrollment is stressful for employees, and really stressful for HR staff," he says. "Entering paper forms is a labor-intensive process that creates a lot of errors. As a result, you've got fixes that have to be done after the fact, people in the wrong coverage, things like that. We were just trying to make the whole process a little less stressful and a little easier on everybody by switching to automated enrollment. We were able to do that."

"If you look at how enrollment happens today [in a paper-based system]," Haugh says, "a person is handed these booklets and given a form. Very often they fill them out incorrectly or fill out incomplete information. In a web environment, you can actually walk people through the specific steps and ensure they do exactly what they're supposed to do. If they fail to do something, or try to do something that doesn't make sense, you can present them with specific messaging to put them back on track. Your ability to deal with it, and reduce frustration in the process, means a more accurate and more effective process."

Automation reduces paper waste

Automation is a solution to problems around open enrollment, but it can also apply to other paper driven areas of benefits, says ProAct's Haugh. Streamlining employee communications is a cheaper, better way than distributing piles of booklets, he says. "If you eliminate the paper communications, the Summary Plan Description and others, and replace them with electronic means of communicating, its much more effective," he says. "It means being able to do things that previously were not possible through print-based media. Paper-based communication documents, SPDs, and plan booklets and things like that, cannot be easily tailored to an individual.

On the other hand, through technology, you can easily break them down and personalize them based upon who the employee is and what he or she cares about. If there are three plan options, for example, a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO) and a Point-of-Service Plan (POS), technology allows you to access the features you care about in each plan and generate a comparison across those plans. That's an example where you can actually do something better for cheaper."

While it is still necessary under the law to make paper copies of certain communications available for employees who request them, the volume of printing is greatly reduced by using the Internet or the company's intranet. "The old way is just not up to solving the problem very well," says Haugh. "The old way is throwing an 80- or 90-page document at somebody. It's legalistic, and often not organized very well, because it doesn't know the questions you have. If I'm making plan selections, I may care about how the coverage differs from one plan to another. I may care about something very specific, like who the providers are in each plan. Paper-based documents do not do a good job of allowing me to compare what I care about. If a comparison is available at all, it likely does not get down to much detail. The bottom line is you can be much, much more effective."

ProAct Technologies has thought through these comparisons for its software. "You can compare the basic stuff, like deductibles, co-insurance, and out-of-pocket limits. Beyond that, there are certain key services that people tend to care about, like the mental health benefit or prescription drug coverage. We've developed a piece of software that allows you to define the comparisons at whatever level you want to as a company."

Event-specific information

Automation can also allow customization of communications and enrollment actions based on specific life events, Haugh says. "People don't use an application just to surf around it," he says. "They've got a reason. There is some event, something that has prompted them to go online and access this. One of the things that technology allows you do to is be able to take action based upon the specific event." For example, if an employee has a baby, the system can prompt for answers to particular related questions, such as: "Do I need to be sure the baby is enrolled as of a given date?" "How soon do I have to add the child to be sure they're covered?" "What's the additional cost?" "What is the maternity benefit?" and "Is the pediatrician I've chosen in the network?"

"The enrollment system needs to be able to apply rules and messaging around the event, and make sure I go through the appropriate steps," Haugh explains. "Think about the manual process you have today. When someone is going to have a baby, they pull out some booklets and search for answers to the questions they have. There's no way to effectively walk people through what they should be doing for that event."

Doing things better for less money makes sense to Jenkins of Rexel, Inc. "This is just a smart way to go," he says. "I know we will never go back to paper. Once you've done it this way, you'll never go back."