leveraging best practices health and welfare - benefits administration

The Journey to World-Class

Leveraging Best PracticesHealth and Welfare - Benefits Administration

Presented to:Lawson Software, Inc. / City of Columbus, Ohio

William Bacote

Manager

The Hackett Group

March 26, 2008

Document Name – HRHW_Assesment© 2008 The Hackett Group. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Objectives and Expectations

Examine current process efficiency, effectiveness, and structure Understand current gaps to best practices, and service delivery model considerations

through examination of Hackett Best Practices Begin the development of a best practices scorecard


Best Practices Defined:A Hackett-Certified Practice is a proven technique that delivers measurable value

Aligns with strategy Reduces costs Improves productivity Promotes timely execution Enables better decision making Leverages existing and exploits emerging

technologies Ensures acceptable levels of control and

risk management Optimizes skills/capabilities of the

organization Promotes collaboration across the extended

enterprise

Hackett’s Best Practices are certified when there is a correlation with world-Hackett’s Best Practices are certified when there is a correlation with world-class performance metricsclass performance metrics


Best Practice Scorecard

Best Practice Current PracticeUsage

Now | Future

End-State Vision

Applicability | Coverage Comments

A description of each Hackett best practice for this process

A description of current utilization of this best practice

CoverageHigh Widespread impact on the enterprise and/or significant value-addMedium Impacts multiple areas, value-add is significant but less relative to processes

ranked as HighLow Impacts a single area or has limited span of adoption throughout the enterprise

CoverageHigh Widespread impact on the enterprise and/or significant value-addMedium Impacts multiple areas, value-add is significant but less relative to processes

ranked as HighLow Impacts a single area or has limited span of adoption throughout the enterprise

ApplicableYes Adoption of the best practice is in line with current/future business needsNo Best practice does not fit the current business needs

ApplicableYes Adoption of the best practice is in line with current/future business needsNo Best practice does not fit the current business needs

CommentsStatements pertaining to the technology enablement, policy enactment and other challenges and/or prerequisites associated with improving the utilization of the Best Practice

CommentsStatements pertaining to the technology enablement, policy enactment and other challenges and/or prerequisites associated with improving the utilization of the Best Practice

No Usage Strong Usage


Best Practice Session


Health and Welfare – Process OverviewProcess Definition – The process of administrating health and welfare plans in accordance with organizational policies,

government regulations, labor contracts and insurance contracts

Major Activities Plan maintenance, enrollment, and record administration

– Maintenance of employee flexible benefits records (vision, dental, medical, short- and long-term disability, life, accidental death and dismemberment and dependent life insurance)

– Plan enrollment and update administration – Health plan-related information administration – Maintenance of records required by third-party providers (e.g., employee eligibility records)

Development of employee assistance programs (EAP) Communication inside and outside of the organization

– Communication of plan revisions to employees – Communication with carriers and third-party administrators regarding claims problems and administrative issues – Management reporting specific to Health & Welfare Plans Administration

Cost analysis of health care plans provided – Health plan accounting and actuarial analysis – Cost analysis of health care plans provided (benefit per dollar)

Coordination with related functions to maximize employee participation


Health and WelfareBest Practice Review – Summary Results

Item Count % of Total Comments

Best Practices Reviewed 20 N/A

Best Practices Deemed “Applicable”

19 95%

Best Practices Fully or Mostly In Use at City of Columbus

5 26% or

Best Practices Partially in Use at City of Columbus

8 42% or

Best Practices Seldom or Not In Use at City of Columbus

6 32%


Health and Welfare – Best Practice Assessment


Now | Future

End-State Vision

Applicability Coverage Yes–No H – M – L

Comments

Simplify benefit plans, eligibility requirements, and contributions (e.g., extend coverage from first day of employment, and eliminate prorating, working spouse contributions and grandfathering)

HRHW001

Currently have different waiting periods and grandfathering for life plans and sick leave bank. Plans vary by group.

Yes H Need to establish a process for the standardization of all non-standard employee service dates.

Plan eligibility and service dates are standardized

HRHW015

Standard within each group except vacation for MCP & HACP where difference accelerates accrual.

Yes H System needs to track accelerated credits.

Benefits information including summary plan descriptions and forms is available on the Web 24x7

HRHW010

Not available via internet but available via the intranet. EEs that have a computer have access.

Yes M Make available via Employee self-service (ESS)

Benefits communication provided on-line and in multiple languages

HRHW019

No but contracts are available via intranet

Yes M A common strategy and approach for benefits communications is needed

No Usage Strong UsageNo Usage Strong Usage




Now | Future

End-State Vision


Comments

HRMS utilized for determining eligibility at time of enrollment

HRHW005

Yes by Central Payroll.Have back end reports that validate entry.

Yes H System should determine/validate eligibility and entry up front.

Plan enrollment completed at time of hire using self-service, including tests for eligibility based on plan rules

HRHW002

Not current practice Yes H Web-based ERP package that supports ESS for benefits enrollment.

On-line benefits election modeling instituted for effect of new benefits on net pay

HRHW017

Not current practice Yes M Web-based ERP system that enables benefits modeling via employee self service

A passive enrollment process instituted; reenrollment occurs only when making changes or when legally required, such as for flexible spending accounts

HRHW006

Current practice Yes L Passive enrollment is current process.





Now | Future

End-State Vision


Comments

Employees make changes to their records using self-service, and those changes automatically flow to plan providers

HRHW007

Employees do not make changes via ESS but changes flow automatically to some providers via flat files.

Yes H Need web-based ERP ESS processes for all HR, Benefits and Payroll events in single database.

Employee enters life-event changes and dependent information using self-service with required documentation sent to a Shared Services Center (SSC)

HRHW018

Not current practice Yes H Web-based ERP that supports ESS for benefits life events and dependent information.SSC or division HR handles benefits administration for processing life events and their impact on employee benefits.

Electronic signatures are used to meet approval requirements

HRHW016

Not current practice Yes M Web-based ERP with work flow approval capabilities needed.

Social insurance and national ID numbers are not utilized as IDs or passwords

HRHW023

Current practice is to use national IDs.

Yes H HRMS system in place which can automatically generate Employee IDs .





Now | Future

End-State Vision


Comments

Self service available to view comparative, summary level, year to date plan information for each health care plan

HRHW025

Available with United HealthCare and other vendors.

Yes L Required by contract.

Paperless processing of non-traditional reimbursement/incentive claims

HRHW026

Division handles fitness incentive for Fire & Police. Division sends central payroll transaction for payment.

No L Manual input but volume is small. Only changes when fitness level changes.

Automatic Health Care FSA claim processing once medical claim is processed

HRHW028

Not Applicable

Direct deposit utilized for all claims payments relating to current and former employees

HRHW020

Available through some 3rd parties.

Yes L 3rd parties utilize direct deposit.

Benefits providers paid through accounts payable via electronic funds transfer

HRHW021

Current practice except for vision service.

No L Vendors other than vision payment based on checks cashed.





Now | Future

End-State Vision


Comments

Capability exists to track, identify and analyze employee issues relative to providers and Third Party Administrators

HRHW008

Tracked manually. Yes H Bolt-on solutions in place for collection of analysis data or SSC or single point of contact has software / system for tracking.

Single point-of-contact established for all employee questions related to total rewards

HRHW003

There is not a single point-of-contact. HR is decentralized and employees contact different people.

Yes H Consider a Shared Service Center (SSC) system / database (e.g. log issues, has common benefit Q&A)

Multi-tiered service delivery model in place, utilizing self-service, call centers to provide support to inquiries and transactions

HRHW032

Self-service is not utilized. There are multiple 800 numbers for support including vendors.

Yes H Consider establishing a SSC and/or single point of contact environment


leveraging best practices health and welfare - benefits administration

Documents