Electronic Enrollment-What are the Benefits and What are the Holdups to Getting Started?

-Some advantages and disadvantages to electronic enrollment and how to use it effectively.
The explosion of Internet usage has ushered in a multitude of new options to old challenges. Two of these challenges have been the volume of paperwork and time associated with enrolling new employees in their benefits and enduring the annual task of open enrollment. Now there is an answer to eliminating a large portion of the paperwork as well as a way to save time, and improve efficiency.

The answer is electronic enrollment, which is simply using the Internet as the communication link between employer, employees, and benefit vendors. Instead of filling out a mountain of paperwork, a user-friendly enrollment wizard guides the employee through the process on a computer at their workstation, at home on a PC, or at a conveniently located kiosk in the workplace.

The advantages derived from this are many. Enrollment information is more accurate. No longer do administrators have to interpret handwriting or be concerned about misreading numbers. Required fields are always filled in as needed. The system continues to remind employees to fill in the required field(s) before they are permitted to proceed.

Cost savings result when employers make benefit information available electronically. There is a major reduction in mailings to employees, allowing employers to experience dramatic savings in postage, paper, printing and distribution costs. Additionally, the most current benefit information is always available simultaneously, to all employees, online. Other company information, such as company manuals, policies, or handbooks can be made available as well, further adding to cost savings.

Multi-location employers receive instant feedback on the enrollment process. This eliminates waiting days or weeks for the paperwork to be returned by mail. The need for the HR department to track the enrollment process on separate spreadsheets or with piles of forms is eliminated. Information is transferred to benefit vendors quicker...days or even weeks faster than the old way, and is more accurate! This process provides cost savings for everyone involved.

Improved employee perception of working for a modern, progressive company begins to take shape. Because they can view the total benefit package and gain easy access to their benefits, employee appreciation of the true value of their benefits rises. Companies who move in this direction give their employees the impression that efforts are being taken to improve communication.

Switching from total paper enrollment via mail to electronic, Internet-based enrollment is comparable to switching from rotary phones to touchtone phones or from the typewriter to word-processing on the computer. In more recent times we may compare it to moving from using a fax machine to send someone a document to using email. Whatever your comparison, one thing is for certain, electronic enrollment is here to stay!

With these great benefits and cost savings, why aren´t all companies installing these applications as fast as they can? Well, like all new technology, there are preparations that must be made in order to take full advantage of new technology, key ingredients required to make it work.

First, a company must have Internet access; second, the employees must have Internet access; and third, a company must see a financial gain.

The first is the easiest to handle. Many companies already have Internet access and those that don´t can acquire it at reasonable cost. There are a wide variety of carriers to choose from and installation is painless.

The second ingredient, employee access, is the greater challenge. Employee access needs to be addressed with a good plan, one that maximizes the benefits that electronic enrollment and employee self-service offer. For those employees with computers at their workstation, access can easily be provided.

The answer for employees without workstation access is strategically placed kiosks. These self-service portals may be placed in the HR department, break areas, or even in the maintenance shed at a golf course! The key to placing kiosks is putting them in areas that provide employees with easy access. The employee may also gain access anywhere, via the Internet. Statistically, 49% of homes in the USA have Internet access and this percent is growing rapidly.

The financial justification can appear to be a tougher hurdle. Cost savings are a reality even though quantifying the savings can be a challenge. Electronic enrollment programs have been shown to reduce turnover, improve company image and dramatically improve the accuracy of data transfer. Additionally, managing personnel data electronically and increasing employee self-service allows HR more time to focus on strategic planning which is becoming necessary as the economy changes and health care costs rise.

However, some midsize to large companies have been able to successfully quantify their savings. As stated in Netkey´s "Unlocking the Power of HR Self-Service" brief, "Since Microsoft launched its HR portal 5 years ago, it has reportedly saved over $1 million a year-the result of streamlined processes, reduced transaction processing time and the elimination of more than 200 paper forms." At Ericsson Inc. as appeared in the September issue of Workforce Magazine, they have realized an annual savings of $1,348,744.25 with almost $30 thousand of those dollar savings in print production and mailing.

Additionally, with electronic applications there is no longer the need to transfer data to and from new business tools or regularly implement updated software versions. With Internet-based applications the updates are automatic and with most versions, there is no additional cost incurred. This is a huge cost savings.

Of course, the one holdup that is often overlooked may be the biggest of all - the resistance to change... Those comfortable mounds of paperwork can be tough to give up... That too is changing! As people begin to take for granted the ability to withdraw money at ATM´s, check their own bank balances electronically and obtain airline tickets from kiosks, they start expecting self-service access in other financial areas as well. A benefits package is part of an employees overall financial picture.

Companies should plan now for the transition to electronic management of their company´s benefits. The HIPPA compliance regulations are requiring health insurance providers to be able to accept and transmit information electronically. Insurance companies are spending millions, maybe billions, to comply. Common sense tells us that once accomplished, why would insurance companies want to continue to handle paper with all the disadvantages involved after they have spent millions to handle the same information electronically? A time will come when transferring information electronically to benefit providers will also provide discounted premiums.

Web-based applications are a cost effective solution to an age-old problem of focusing on the paperwork instead of the benefits. Turning that focus toward the benefits will help HR departments utilize all the timesaving that modern technology and the Internet have to offer. Now is the time to start your preparation!


As Director of Sales and Marketing, Bob Chapman is responsible for managing the Benefitfocus.com Sales team and directing corporate marketing and advertising efforts. He has over 26 years of management experience in Sales, Marketing, and Operations. The vast majority of his experience is in the manufacturing segment of the market where he was successful in increasing market share, improving profits, and introducing new products in the water handling industry using the latest technologies available. Mr. Chapman served twice as President of the Water System Council in the 1990''s and led the industry through an environmental crisis during the rewriting of the Safe Drinking Water Act. His work resulted in an overall improvement of environmentally friendly water handling products while protecting the interests of the companies producing the products. Mr. Chapman attended Bradley University and is married and has two children and two grandchildren.

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