Confidential

Employee Benefits & Communications

How Technology is Transforming HR

October 13, 2016

Rich GordonSenior Consultant, Technology Solutions| NFP Corporate Benefits

Rich has over 25 years of experience in the health and welfare benefits industry. For over 20 years, he has focused his efforts exclusively in the area of benefits technology and outsourcing solutions. Rich has helped scores of employers identify the most appropriate, cost effective administration practices and streamline the increasingly complex task of administering and communicating employee benefit programs.

As an experienced technology and H&W administration / outsourcing professional, Rich has held key management positions at FLX Corporation, Ceridian, and eBenX, prior to joining NFP.

Rich Gordon2600 Kelly Dr. | Suite 300 | Warrington, PA 18976P: 267.482.8372 | C: 215.264.3594 Rich.Gordon@nfp.com | nfp.com

Provides technology, administrative process and outsourcing guidance.

Rich has worked with dozens of organization’s HR Departments in the areas of Recruitment, Retention, Cost Reduction, and Strategic Planning.

Rich KreksteinVice President | NFP Corporate Benefits

As the VP of Corporate Benefits, Rich manages all of NFP’s regional new client development and marketing initiatives in addition to playing a key role in managing existing clients. His creativity and client focus have been instrumental in attracting and retaining client-partners over the years. Since joining NFP in 2007, Rich has played a significant role in helping grow NFP into the largest privately held employee benefits firm in the area, offering best in class client service and support to over 320 mid-market clients.

Rich Krekstein2600 Kelly Dr. | Suite 300 | Warrington, PA 18976P: 267.482.8389 | C: 215.828.4037 Rich.Krekstein@nfp.com | nfp.com

EmployeeBenefits

Retirement Solutions

Property &Casualty

ExecutiveBenefits

Wealth ManagementSolutions

Fastest growing large brokerage as by Employee Benefits Adviser

Largest U.S.-based privately owned broker as ranked by Business Insurance

#4Largest benefits broker by global revenue as by Business Insurance

#5

Strength in Numbers Nationally

x100

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NFP Corporate Benefits (Locally)

5

Evolution of HR and Technology

PayrollTime & Attendance

Employee Files

Performance Management

CompensationFMLA Tracking

Recruiting

Employee/Manager Self Service

Benefit Elections

Communication / Education

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Landscape of HRIS and Benefit Administration Solutions

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The Challenge

When it comes to human resource services and benefits, businesses today are faced with numerous challenges, including:

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PAPERWORK

Increased ComplexityInformation Overload

Presentation Overview

Technology, as it relates to employee benefits, has two distinct(but very interrelated) areas:

Transaction Management

Communication

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Transaction Management - The Old

Paper Enrollment

EmployeeFrustration

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Transactional Challenges

• Determining eligibility - who’s eligible, for which benefits, at what costs• Multiple benefit groups• Different contribution amounts for different populations• Contingency plans• Voluntary benefits

• Capturing enrollments for employees and dependents• Updating carriers, vendors, payroll• Managing life events and adds / changes / terms• Transfer of deductions $ from payroll to FSA, HSA and Voluntary vendors• Creating self bills• Reconciling carrier list bill invoices• GL accounting of charging cost of benefits back to divisions / locations /

business units / cost centers

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Transactional Challenges – What Could Go Wrong?

• If paper, human error and managing the inconsistent flow of activity• Employees on carrier system long after they should have terminated

• Industry averages tell us that manual administration results in 3%-7% error rate

• At $10K per employee and 300 lives – 5% is $150K• Inaccurate deductions, missed deductions, retroactive deductions or no

deductions at all• Customer service issues arise when administrative delays/errors result in

employee/dependent claims that are not paid or paid incorrectly• Timing delays result in retroactive billing and claim activity which is brutal for

both HR and for the employee• HR time spent fixing problems that should not have occurred in the first place• Opportunity costs for HR staff, time spent away from strategic initiatives

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Administrative Alternatives

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Payroll Vendors

HRIS Vendors Best of Breed

Administrative Alternatives

Payroll Vendors…to name a few!

• Varying degrees of benefits administration functionality ‘out of the box’• Typically can be configured by a non-programmer• Virtually all have web enrollment capabilities• Most will integrate with carriers• Implementation support is ‘hit or miss’• Ongoing support is typically an 800#• Usually little or no built in communication capabilities

Key to success• Understanding what system can and cannot do as it relates to your plans• Automate what you can, put processes in place to manage what you can’t

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Administrative Alternatives

HRIS Vendors…to name a few!

• Typically limited amount of benefit administration functionality ‘out of the box’• Need a higher level technical expertise to configure application for plan

design• Each client has freedom for unique customizations• All have some level of web enrollment capabilities• All will integrate with carriers although it’s typically pretty expensive• Implementation support is a full blown project involving technical staff and/or

technical consultants• Ongoing support is through internal resources• Usually little or no communication capabilities

Key to success• Open and detailed communication between the IT folks, who are building the

application, and the HR/Benefit staff who are using the application. IT folks don’t know the nuance of benefits administration so HR must stay very involved.

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Administrative Alternatives

Best of Breed

…to name a few!

• Typically used when there is either no HRIS functionality, not inclined to use resources to build out HRIS functionality or have multiple HRIS/Payroll instances

• Built specifically for benefits administration so typically includes functionality for the latest offerings...HSA, Limited Purpose FSA, Surcharges, Wellness Credits, Voluntary Benefits, etc.

• Implemented, configured and supported by benefits administration professionals• Usually a long list of nice, useful standard reports• Custom reporting tools built for relatively non-technical users• Rich, integrated communication tools

Key to success• Allow plenty of time for the implementation and work closely with internal

resources to integrate application with HRIS and/or Payroll systems.• Take advantage of communication functionality

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Case Studies

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• Implementing ADP which had previously not been implemented• WFN web enrollment• Carrier feeds replaced manual efforts and found significant

errors• Integrated with payroll• Introduced third party communication initiatives

Case Studies

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• Client with HRIS system but hadn’t done carrier feeds• Introduced a carrier connection integration tool• Pre-carrier feed audit of data• Carrier feeds• Billing reconciliation• Claims reconciliation

Case Studies

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• Client with old HRIS with plans to upgrade• Best of Breed• Replace one-on-one enrollment with web enrollment• Carrier feeds• Drive participation in HDHP plans• Voluntary benefits pays for technology

Implementation Pitfalls

• Set your own proper expectations• Be patient and finish the job!• Automate carrier feeds whenever possible … there could be real

money lost• If carrier feeds are not possible, periodic audits

• Don’t try to make a system do what it doesn’t want to do• Introduce communication tools whenever and wherever possible

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HR Technology - Benefits Communication

HR Benefits Communication

The Old• Minimal plan changes due to minimal cost increases• Relatively simple plan designs, typically rich benefits• Fewer employee choices

The New• More choices within the plan• Greater responsibility of employee regarding use of plans• More employee money at stake• Competition for mindshare, need for shorter more targeted messages• Need for ‘just in time’ information• Information must be personal to be effective• Potentially huge difference between how your population digests information

• Young/old• White collar/Blue collar

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The Who, The What , The How

• Who are we communicating to?• Employees• Spouses & Dependents

• What is the goal of the communication initiative?• Education• Behavioral change

• What medium can we use to get message across?• Paper• Email• Video• Interactive media• Web

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The Who

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1 Career Bulder 2016 survey - Pew Research Center

They Aren’t Who We Think They Are

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The What

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The Old

The New

Types of Communication Initiatives

• Plan Selection - Which plan is right for my family and me?• Decision support tools designed to help employees pick the right plans for their

current income, health profile, and health risk appetite• Plan Education - How do I use the plan I selected?

• CDHP education• Deductible vs. Coinsurance• 3 Tier Networks• Formularies, Step Therapy, Service Referrals

• Consumerism - How to become a better consumer of healthcare?• Provider negotiation• RX- Brand vs Generic• Which provider, for which services, quality vs. cost?

• Behavior Change• Wellness initiatives / preventive screening compliance / lifestyle changes• Disease management compliance• ER vs. Urgent Care• Imaging

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Plan Selection - Decision Support Tools

• Meet Alex• Ask Emma• Employee Profiles• Employee Cost Calculator• Carrier Tools

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Plan Selection - Employee Cost Calculator

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Plan Selection- Employee Profiles

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Plan Selection - Carrier Tools

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Plan Education

• Guidespark• Brainshark• Video Guy• WebEx• Interactive Guidebooks• Carrier Portals

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Consumerism

• Healthcare Blue Book• Cost vs Quality of Care???

• Castlight• Emails and Flyers

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Behavior Change

• To change behavior you must show the “WIFM”• What’s in it for me?

• ER vs. Urgent Care • Imaging• Rx

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Putting the Pieces Together

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Transaction Management

Communication

Launching Communication Pieces From Enrollment Screens

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Launching Communication Pieces From Enrollment Screens

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Questions

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