Paperless Perks: How our interactive web site works for clients

Minnesota Life is one of the first benefits providers to offer online enrollment for client companies' employees. Internet-and intranet-based automated systems are likely to become major tools for making and tracking enrollment changes.

By Dee Depass
Star Tribune Staff Writer
January 31, 2000

At a time when corporations want less paper and greater efficiency, St. Paul-based Minnesota Life Insurance Co. has become one of the first in its industry to offer online employee benefits enrollment. Other companies are starting to follow, as the Digital Age meets the personnel department in what is expected to be a large-scale change in the way companies nationwide process benefits changes.

Another sign of this trend is the recent success of Minneapolis-based eBenX, which specializes in helping companies administer benefit plans electronically.

At Minnesota Life, the new Intranet service allows workers to sign up for health, life, disability and variable insurance with a click of a mouse. An employee's previous coverage selections, co-payments, deductibles and insurance limits are displayed on the screen for easy comparison.

Last summer, General Mills became the first company to adopt the Minnesota Life system, and 950 General Mills workers signed up for their benefits online. Six weeks ago, Minnesota Life introduced the system to its own 2,400 employees for the first time.

"We liked it," said Mike Davis, vice president of compensation and benefits for General Mills. "We thought it was a good thing, and we are sure it is probably saving us money."

An increasing number of corporations are turning to Internet and Intranet outlets for enrollments and other routine tasks.

Minnesota Life saw 10 companies adopt its online benefits tracking service last year. Three weeks ago, Allianz Life Insurance of North America in Minneapolis introduced an internally developed Intranet enrollment system for its 700-plus employees. And Minneapolis-based ReliaStar just announced that it is developing its own Internet and Intranet enrollment capabilities for group life clients.

Beyond, benefits, General Mills lets workers order prescriptions online and track and change 401(k) plans at home.

"When we put our work out to bid, we consider the Internet thing to be a critical element," Davis said. Employees liked the flexibility of electronically analyzing benefits or 401(k) plans during the day, night or weekends, he said.

General Mills officials were surprised to learn that many employees chose Sundays to take care of 401(k) and insurance duties.

Competitors got a peek at Minnesota Life's new technology this summer during a demonstration at a Nashville benefits convention.

"Four competitors came up to us and said, ‘Nobody is able to do this. You must have amazing technical people,' " said Kristi Matousek, Minnesota Life's group marketing specialist.

"We are seeing a lot of excitement about this when we talk to industry consultants," said Paula Bilitz, Minnesota Life's group marketing manager. "Consultants are saying they are not seeing this from anyone else. So we are enjoying our competitive edge."

The edge is not expected to last long. When General Mills put out bids for employee benefits last year, a number of companies presented options that involved computers, although none offered all the interactive abilities that Minnesota Life did, Davis said.

Patty Ash, senior analyst with Connecticut-based LIMRA, a trade association of 800 life insurers, said she didn't know of any other company that offers electronic employee benefits systems, but she expects such systems to be quickly copied by other insurers.

Like the phone enrollment system that predates Intranet enrollment, a few large companies will tackle the service first and be followed by smaller players, Ash said.

"It should really work for the employers because they can reduce the size of their H.R. staff and the other people who usually do enrollments," she added. "It is automated, so it would provide a quick track record of exactly who signed up for what."

Still, it may take a while for all workers to get comfortable with the option.

General Mills was Minnesota Life's first major client, and its employees were given the choice of enrolling for benefits electronically or on the phone. About 950 workers enrolled online. Another 2,600 used the phone, according to Minnesota Life.

"Internet use is just beginning and a lot of companies know their employees are not ready for it right now," Matousek said. " But ... more and more companies and employees will want this.

Unlike General Mills employees, who had a choice of enrollment methods, "there wasn't another option with Minnesota Life. If you wanted the benefits, you had to enroll online, " Bilitz said. "It was a piece of cake."

Maria O'Phelan, director of Minnesota Life's customer service and technology division, said that by going online, Minnesota Life saved $50,000 with its first enrollment last month because human resources workers didn't have to transfer data from paper to computer.

While the system cost "hundreds of thousands of dollars" to develop, O'Phelan expects it to pay for itself over time. Corporate clients don't have the development expenses and should see immediate savings.

Online benefits enrollment is confidential. Each worker gets a password and a user ID and can choose only benefit options that apply to them.

Allianz created its benefits enrollment system for less than $100,000, said Allianz project manager Paul Sipe. Unlike Minnesota Life, Allianz's system won't be offered to group life customers. And there is no guarantee that the system will survive once Allianz and merger partner Life USA combine payroll and benefits systems.

Minnesota Life created three auto-mated benefit systems. The first lets employees sign up for the personal and family insurance they want while tracking the premiums for each selection.

The second system is designed for human resources administrators to track employee coverages, premiums and claims. The third lets employees who sign up for various life insurance products track or change investment options online. The second system is the most popular among the eight companies currently using it and nine more that are in the process of getting set up, O'Phelan said. Employee benefit enrollment requires every employee to have access to the Internet on the job; but the human resources tracking system requires only that human resources staff have Internet access.

Copyright 2000 Star Tribune. Republished here with the permission of the Star Tribune. No further republication or redistribution is permitted without the express approval of the Star Tribune.

Note: Minnesota Life offers a full range of products to meet employee benefit needs, including: Group Term Life and Supplemental Group Term Life, Group Universal Life and Variable Group Universal Life Insurance. The company does not provide medical insurance.

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