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The First Text Message

September 14th, 2017 | No Comments

There is a revolution underway in employee benefits management and compliance that most companies are unaware of.  Innovation in employee benefits management and compliance is growing by leaps and bounds.  Technology is being brought to bear on what were previously paper-intensive processes.  Within a few years, management of employee information will be almost completely paperless.

The First Text Message

When I was in grade school in the 1970s, my best friend lived around the corner from my house.  The only thing that separated our houses was our neighbor’s fence.  My friend’s father worked for Western Union, and one day he proposed to setup old teletypes in each of our rooms and run a wire between them so we could communicate to one another without using a telephone.

This was before Steve Jobs got Xerox to demo its graphical user interface (GUI) to his development team at Apple and the “deal of the century” where IBM contracted with Bill Gates and Microsoft to build the PC operating system which became the precursor to Windows.  This was before the internet, before cellphones, before Google and Amazon, before Facebook, YouTube, Twitter and Snapchat.

When I recently related my story to two teenagers they looked at one another and almost simultaneously said, “the first text message.”  They’re right.  Though my buddy’s father had the idea of texting some 40 years before it came to be, I doubt that he was the only one who had it.  The world works that way sometimes; ideas come about and are nurtured collectively.  The airplane and automobile are probably the two of the most prominent examples.

Ideas aren’t that different from the physical universe.  Stars and planets form because gravitational forces attract individual particles until they eventually form a larger mass.  Similarly, ideas such as personal computing, the internet, email and texting coalesced collectively overtime.  If you look back at the history you can see how the different elements fell into place.

We would have ended up here no matter what because so many people had the same or similar ideas about bringing the power of computing to the masses.  A similar wave is gaining momentum in employee benefits management and compliance administration.

The Agony of Benefits and Compliance Administration

Compliance is becoming more complex as regulators require that companies collect more information from employees and provide more specific information to them.  Companies must keep meticulous records for reporting and potential audits by various government agencies.  The cost of non-compliance can be exorbitant.

Until recently, most companies managed benefits enrollment and compliance with paper forms.  Lots of them.  It wasn’t unusual to provide a packet to new hires about half the thickness of a telephone book.  File cabinets were stuffed with employee information, much of it outdated and obsolete.  The information was not centralized and was often susceptible to theft and loss.

Over the past few decades, large companies invested heavily in systems that would manage benefits enrollment and employee information but the cost of this technology was beyond the reach of small and mid-size companies until now.

A wave of new benefits management and compliance systems are now available for employers of any size.  The capabilities of these systems vary.  Some are proprietary and somewhat closed systems while others feature open application programming interfaces (APIs) that work with other proprietary systems like payroll and insurance companies.

So how can these systems can help your company?  Read on.


The bulk of employee information is collected during the new hire process.  It’s at that time the employee completes an I-9, W-4 and most likely a direct deposit form.  That is also the time when companies are required to provide employees with the greatest number of required federal and state disclosures.  In addition, the employer may have forms and policies of its own, like an employee handbook, they want employees to receive and review.

The cool thing is that some of the benefits management systems include the ability to complete these tasks and onboard employees with almost no paperwork.  There are other advantages.  Some systems don’t allow the employee to advance to the next step until the employee completes the required task, ensuring that no task is missed.

Some onboarding tasks, such as the I-9, require that a hiring manager review the information provided by the employee for accuracy and completeness.  Some of the available systems include work flow for management approval of different tasks.

Required employee notices and company specific documents can be provided in electronic form during the onboarding process as well.  These systems can be set to require that the new employee open and review the document before advancing to the next task.

All of this is captured for easy organization and storage for later use such as potential audit compliance.  Using an employee benefits management system to onboard employees shouldn’t just be something “we’d like to do” but “something we must do.”

Benefits Enrollment and Management

These systems can also simplify ongoing benefits enrollment and management, including open enrollment.  The bulk of information provided to employees during open enrollment can be intimidating and difficult to navigate through.  Many of these systems provide a customized employee experience that provide an easy and intuitive way for employees to review the benefits available to them and make elections.

Employees can see the benefits available to them and a cost breakdown of their benefits by payroll period.

A handful of these systems feature APIs that connect to insurance carriers and other third parties allowing for paperless enrollment.

When employees need to make a change, download a form, or view their benefit elections, they can log back into the system, and the system can be set to alert HR of any employee’s request for approval and processing.

Compliance and ACA Reporting

With all this information in one place, companies can easily pull reports and be prepared for audits.  Some employee benefits management systems feature extensive reporting capability.

Since 2015, large employers with 50 or more full-time equivalent employees have been required to file reports with the IRS detailing offers of coverage to full-time employees.  This can be a tall task for payroll companies that do not have access to all the required information to complete the forms.  Some of the employee benefits management systems offer the capability to file the forms directly with the IRS electronically.  The advantage of these systems is that all of the information needed for filing is in the system.

What I Just Told You

Employee benefits management systems can simplify your life in many ways.  The cost and capabilities of these systems vary but are now reasonably affordable for small to mid-size companies.

My friend and I didn’t get the teletypes because our neighbor wouldn’t let us run a wire along his fence, but, as you know, the story didn’t end there.  An employee benefits management and compliance system that solves your needs is no longer out of reach.

If you’re looking for an employee benefits management and compliance system or would just like to learn more about them and how they can benefit your business call me at (952) 237-6956 or email me at mdmowski@comprehensivbenefitservices.com.

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