What do a Baptist church in Texas, Jimmy Buffet’s Margaritaville in Key West, Florida, an oil and gas company in New Mexico, several Texas school districts and a well-known Colorado Springs architectural firm all have in common? The answer: BDA Administrators, a third party administration (TPA) company, based in Colorado Springs.
BDA Administrators, started by insurance industry pros, Roger and Jerry Jo Shires, in 1984 specializes in providing outsourced benefits administration; full-service/claims administration for self-funded companies; and retirement plans for individuals and groups to clients in multiple states. The couple and their four employees focus their efforts on school districts and on companies with at least 50 employees — tracking cafeteria plans (employee benefits including healthcare, dental, cancer, disability and life insurance accounts) and retirement programs for more than 10,000 individuals.
“The relationship between a TPA and its clients is based on trust. Some of our longtime clients in Texas or New Mexico send us wedding invitations and birth announcements – and some even stop by when they’re in the area on a band trip or vacation just to say ‘hi,’” Jerry Jo said. Shires also notes that her company has the U.S. Postal Department completely baffled. “One day our postman stopped in and asked us what we do. He couldn’t figure it out since our mail comes postmarked from a Texas Budweiser distributor, a Baptist church, two Texas school districts, a few Colorado Springs professional offices – and then there are the envelopes with margarita glasses printed as part of the return address from Key West.”
As an industry, TPAs operate intense but vital behind the scenes offices that track, update, report and administer employee benefits that are an integral part of most employees’ payroll deduction plans. The same information must also be accurately recorded to the employer’s IRS or Pension Welfare and Benefit Administration account. “I’ve actually called FedEx five minutes before 7 p.m. to tell them not to lock the door and let them know we’re on the way with employee benefits checks that must arrive in time for the next day’s payroll,” says Jerry Jo. “I don’t care if there’s four feet of snow on the ground – our clients still need their employee benefit checks or updates ready to go out with payroll. We can’t let them down.”
BDA Administrators, as a TPA, was recently contacted by the developers of SmartBen to help introduce a stream concept to employer groups. “Third party administration companies like ours already have the HR relationships in place and are a logical way to get the message out about the online benefits information enabled by SmartBen,” said Roger Shires.
As a longtime insurance professional, Roger Shires, CLU, ChFC says he has called on companies annually, set up employee meetings to explain changes in benefits and has answered hundreds – perhaps thousands — of follow-up questions on medical, disability and other insurance benefits. In the traditional world, companies might set aside entire weeks of meetings for shift workers and 8-5 employees – just to explain the latest nuance of the medical or dental policy. Those days of “group gropes” may be gone permanently thanks to a product that Shires has introduced to the marketplace.
“It just makes sense,” said Shires, a former U.S. Air Force pilot who served in Vietnam prior to beginning his insurance career. “Especially with all the 2001 Health Insurance Portability and Accountability Act requirements that require employers to begin conducting health care transactions and exchanging coverage information electronically.” For those not involved with employee benefits, the government now requires that any employee must receive a certificate of insurability, issued upon termination for his or her job. This certificate may be used to waive waiting periods required by the employee’s new employer-sponsored health insurance plan.
So far response to SmartBen has been enthusiastic says Shires, who likes marketing the program because it makes him a veritable superhero to his clients. This state-of-the-art interactive employee benefit system, developed in 1999 by Andy Anderson of Smart Benefits, Inc., a former employee benefits attorney, empowers employees with a tool more powerful than a locomotive to evaluate what-if deduction scenarios for all medical, dental, disability, and life insurance employee benefits; plan descriptions; and overviews of each – all accomplished with the click of a mouse at home or at work.
In addition, once benefits are selected, employees can amend them, as desired, without one trip to see the HR or benefit administrator. This feat is accomplished faster than a speeding bullet – on a 24/7 basis via the Internet, allowing employees to calculate a variety of options on a what-if basis. Individuals can even check how each decision impacts payroll deductions – preventing Enron-type situations in which employees have no control over their own retirement plans.
And thanks to technology, he helps HR departments leap tall buildings with a single bound — saving them expensive administrative time required to answer complex benefit inquiries (not to mention finding the broker who initially set up the company’s health or disability plan). Shires says SmartBen spares employers and employees those yearly “benefit update meetings” that match silver-tongued brokers with a roomful of dazed employees, overwhelmed by insurance industry lingo. Remember this: “Now what exactly is the difference between the HMO, POS, and PPO program again…?”
In the February 2001 issue of HR Magazine, an article by Susan J. Wells described how 140,000 employees of IBM Corporation began to receive their benefit enrollment materials online. In the article, Glen Brandow, an IBM spokesman said, “We had an overwhelmingly favorable response,” noting that 80 percent of employees enrolled via the intranet system. Brandow said that it allowed employees to personally model the information most important to them in order to make better benefit selections. The experiment also turned out to generate “more than $1 million in cost savings associated with the delivery of benefits information,” according to Wells. She also points out that more than 90 percent of 342 companies surveyed (representing more than six million employees) said they experienced increased employee satisfaction and as much as 100 percent return on investment within just one year.
So, armed with smart products like SmartBen; with regular government updates on regulatory changes affecting tax-sheltered retirement and employer/employee cafeteria plans; and with years of deepening relationships with clients who appreciate their service, BDA Administrators plans to continue to grow and develop new services. “A few weeks ago, we completed a survey sponsored by the Society of Pension and Benefit Administrators,” said Jerry Jo. “We discovered that 71 percent of our TPA clients have been with us for more than twelve years. That’s come almost exclusively from word-of-mouth and referrals from satisfied customers. I guess we’ll just continue delivering good service and innovative products like SmartBen – and the business will come.”