Xerox Proprietary
Speakers
2 May 12, 2016
Mary Armstrong-FlippoNational Practice Leader,Absence & Productivity SolutionsXerox HR Services
East Coast
Yvonne Breiter, MBADirector, ConsultantAbsence & Productivity SolutionsXerox HR Services
West Coast
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Today’s Objectives:
• Determine if outsourcing, insourcing or co-sourcing administration is right for your company
• Understand the various carriers and Third Party Administrators (TPA) in the market and their capabilities
• Learn about new and emerging technologies to manage leaves, disability and ADAAA
• Know how to take the next steps towards a solution
Leave Administration Discussion
3 May 12, 2016
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Administration is burdensome
• Ever changing state laws
• Vague standards and definitions in the law
• Multiple populations (unions, legacy businesses, etc..) add complexity
Compliance with the law is difficult to achieve
• Litigation is increasing and more visible
• Weak point is manager behavior
The Problem with Leave Administration
4 May 12, 2016
Increased use of intermittent leave (multiple small increments of time instead of one continuous period of time)
• Overwhelming to track accurately
• Difficult to manage
• Most negative impact on productivity (typically unplanned absences)
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3 Federal Leaves
• FMLA
• USERRA
• ADAAA – leave as an accommodation
>150 State/Leave combinations:
• State FMLA Leave
• State Pregnancy Disability Leave (PDL)
• State Disability Insurance with Job Protection Leave
The Problem with Leave Administration(cont.)
5 May 12, 2016
• FMLA for care of a same-sex spouse as required by state definition of marriage/gender
• State Domestic Violence Leave
• State Family Military Leave
• State Bone Marrow or Organ Donation Leave
• State Civic Volunteer Leave
• State School Visitation Leave
• State Crime Victim/Court Witness Leave
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Leave administration statistics for the typical employer:
• Total average lost workdays: 6 per employee
• Intermittent leave days per 100 eligible employees: 16
• Continuous leave days per 100 eligible employees: 234
• FLMA work days correlate to percentage of female workers: 41% female
• Average # STD claims per 100 eligible employees: 8.4
• Average # LTD claims per 1,000 eligible employees: 4.13
The total direct cost of employee paid time off was 15.4% as a percentage of payroll.
• This accounts for wages/salaries, overtime costs, and replacement workers.
Leave AdministrationFast Facts*
6 May 12, 2016
Cited: 2015 EMPAQ Report*
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Considerations for Leave Administration
• Full outsource, hybrid co-source or software model?
• Insured or disability product bundling desired?
• Most critical performance imperatives (compliance, quality, customer service, etc..)
• Balance of cost vs. customer service?
• Degree to which customization or configuration are required?
• How “hands on” do you wish to be?
• What are the escalation and integration requirements?
• What are the cultural sensitivities about outsourcing?
Leave AdministrationConsiderations
7 May 12, 2016
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Options for Leave of Absence Administration
• Strengthen current process with updated forms, tools and workflows
• Enhance current process with licensed software – Software as a Solution (SaaS)
• Co-source administration (software + some “shared” vendor-supported workflow)
• Outsource administration (leave and/or disability)
Leave AdministrationOptions
8 May 12, 2016
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Leave AdministrationPros/Cons
9 May 12, 2016
Approach Pros Cons
Strengthen current
process
• Least expensive
• Least threatening
• Can be scaled and prioritized to limit burden on internal resources
• Outcomes dependent on adoption of changes
• Requires some form of surveillance to ensure consistent use
of new tools, workflows
• May not be taken as seriously as options that create more
culture change
License software • Ensures standardized process and materials
• Creates “checks & balances” to ensure compliance with the
process and use of the tool
• Less expensive than outsourcing
• Can receive feeds from disability and workers’ comp programs for
integration
• Requires ongoing “user support” and training to ensure
continued compliance
• Outcomes dependent on adoption of system and appropriate
use
Co-source
administration
• Less threatening than full outsource
• Can target vendor activities on most critical compliance risk steps
• Can be integrated with disability plan administration
• Almost as much work as full outsourcing
• Requires standardization of ‘retained activities’ and process
discipline to ensure support for vendored activities
Outsource
administration
• Most efficient approach
• Ensured consistency of process and compliance
• Least demand on internal resources
• Can be integrated with disability plan administration
• May not be a cultural fit
• Most expensive option
• Still requires resourcing of ‘retained activities’ to support for
vendored activities
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Leave AdministrationVendor Market
10 May 12, 2016
Group I: Third Party Administrators (TPAs)
• Typically no insured products (some exceptions)
• More flexible
• More specialization in LOA administration and integration with partners
Group II: Insurance Carriers
• Offer insured and ASO products (generally will not agree to ‘standalone’ LOA without ASO or insured products)
• Less flexible
• Typically better pricing than TPAs due to bundled disability work
Group III: Software as a Service (in house administration)
• Least expensive option
• Relies on expertise and capacity of Benefits/HR team
• Multiple components (LOA, ADAAA, Claim Administration)
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Leave AdministrationVendor Market – Leading Group I TPAs
11 May 12, 2016
Vendor LOA ADAAA Disability / IntegrationWorkers’
Comp (WC)Highlights
CareWorks ASO STD;
Coordination with Insured
Via
partnerships
• Strong clinical management focused on reducing durations
• Employer size 50 – 20,000
ComPsych
(FMLA
Source)
FMLA only; coordination
with STD carrier
n/a • Competitive FMLA outsourcing platform
• Reasonable fees
• Built to suit – custom
• Employer size 50 – 2,000
• EAP add on services a core business
Matrix Via
partnerships
• Owned by Reliance Standard
• Employer size >2,000
• Robust and user-friendly technologies
• Premium bill pay services while on leave
Reed Group Via
partnerships
• Owned by The Guardian
• Developed MDGuidelines
• 2016 acquired Aon Hewitt’s 360 ASP business
• Robust manager dashboards
• Employer size >2,000
Sedgwick • Leader in the industry due to size & discipline
• Insurance partnership with Prudential
• Employer size >5,000
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Leave AdministrationVendor Market – Leading Group II Carriers
12 May 12, 2016
Vendor LOA ADAAADisability /
Integration
System &
ReportingHighlights
Liberty Mutual WC, STD, LTD • Rapid improvements in their product have gained
market share, commitment to emerging technology
(mobile, etc..)
• May consider LOA standalone
Aetna STD, LTD • Strong history in absence
• Typically no standalone LOA (requires insurance)
Unum STD, LTD • Available for smaller employers
• May consider LOA standalone
• Reasonable fees
The Standard STD, LTD • Solid customer service for employers with
“hand-holding” culture
• Limited standalone
• Very strong RTW and Voc Rehab capabilities,
with focus on ergonomics
The above quick-list does not fully represent the carrier market
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Leave AdministrationVendor Market – Leading Group III Software Providers
13 May 12, 2016
Vendor LOA ADAAADisability
/Integration
System &
ReportingHighlights
AbsenceSoft
(AbsenceTracker) In the market less than 2 years. Positive feedback from
clients thus far.
• Developers have deep experience
• Cloud-based offering
• “On-demand” focus with texting, dashboards
• Separate ADA and self-insured STD modules
Absentys
(LeaveLink) • Acquired by Sedgwick 2014
• Leading provider of software as a service ADALink less
flexible than Qcera’s product, but more user friendly
Claim Vantage
(AbsenceDirect) • Cloud-based technology solution
• SaaS and FML/STD/LTD outsourcing options
• Flexible solutions and client size
Qcera
(iTimeBank) • Strong provider
• Integration with self-administered disability
• Superior reporting
Reed Group
(LeavePro) • Offering their product as SaaS
• Integration with their administration of disability
• Not as robust as specialty software
• Integration with MDGuidelines for RTW
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Available TechnologiesVendors
14 May 12, 2016
Jellyvision – Interactive help tools,
intuitive per employee
Manager dashboard - staffing at
a glance for proactive scheduling
Mobile access to report a leave,
review status of a leave
IVR and texting to report
intermittent leaves, check on
a claim
Advice to Pay (ATP) interfaces
with payroll
Leave Status Feed (LSF) interfaces
with HRIS
HR Reporting for actionable insight,
trends and metrics
Bar code scanning of forms and
letters reduces time, quick access
Manager training module for
compliance at fingertips
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ADAAA: Leave and Stay at Work
16 May 12, 2016
Full-spectrum
solutions available
per vendor: Leave as an accommodation,
restrictions, accommodations
Process initial accommodation request
Facilitate employee communications
Review medical certification/clarification
Define essential job functions
Provide documentation & governance of Interactive Process; participation and coaching
Coordinate specialty resources: cognitive, Voc rehab, environmental, etc.
Recommend decision to accommodate
Define essential job functions
Follow up on decision and documentation
Track and manage accommodations
Conduct ongoing outreach and communication post RTW (stay at work)
Provide HR reporting and metrics of ADAAA incidence, accommodation types, etc.Vendor capabilities, 2016 Matrix ADAAA model
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Estimated savings of 10-15% in the first 12-18 months of leave/disability outsourcing due to:
• Moving from unmanaged/decentralized to managed/centralized absence program
• Improved processes allowing key staff to focus on high priority items: trends and metrics, program strategy, return to work efforts
• Savings associated with possible consolidation to one primary provider, economies of scale
• Reduction in incidence and duration of absences, improved productivity
‒ Concurrent reduction in related healthcare costs associated with reduction of durations
• Improved accuracy in managing benefit offsets and overpayments
• Reduction of risk and/or penalties associated with lack of compliance (FMLA, ADAAA, perceived discrimination, inconsistency)
Leave AdministrationOutsource Savings
17 May 12, 2016
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Typical Vendor Selection Timeline
18 May 12, 2016
~ 6 Weeks ~ 8-10 Weeks ~ 12-14 Weeks
Mobilize Analyze Finalize Realize
• Collect and consolidate
program documentation and
utilization data
• Publish project plan and
milestones
• Document current internal
program parameters and
create financial baseline
• Outline initial vendor program
parameters, scope of work &
installation timeline
• Collect and review policies,
procedures and
communications
• Compare to best practices and
compliance imperatives
• Identify opportunities for
improvement & readiness
• Establish Future State model,
including retained activity
strategy
• Prioritize program changes,
finalize future state and
implementation strategy
• Establish internal program
parameters
• Finalize vendor statement of
work & performance standards
• Initiate vendor selection
process
• Select vendor partner(s)
• Work with project team and
vendor resources to translate
implementation strategy into
an integrated implementation
work plan
• Establish work stream teams
and project management
protocols
• Manage to the work plan with
each workstream team
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Phase I: Outsourcing Analysis & Business Case Development
Typical Program Goals
• Enhance the overall customer experience
• Comply with FMLA and state laws
• Reduce the cost and burden of leave administration
• Centralize data for greater reporting and transparency
• Reduce absence and increase productivity
• Coordinate leaves tracking with disability
Phase II: Conduct Request for Proposal and Vendor Selection
Phase III: Implementation Support and Process Mapping
Our Consulting Support Approach: 3 Phases
19 May 12, 2016
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Mobilize (typically 1-2 weeks, depending on data availability)
• Conduct an analysis of current people, processes, and technologies supporting current leaves administration structure
• Create baseline cost of current operational model: staff, incidence, fees
• Create baseline assessment of current risk: compliance, inefficiency, technology
• Define strategic goals – what is the desired outcome for the operations, timing, impact, financials
• Develop a “Needs and Wants” list aligned to the strategic goals, including cultural fit, reporting, self-service tools
Phase I Approach
20 May 12, 2016
Analyze (typically 3 weeks)
• High-level review of market options for complete understanding of services offered
• Define hard and soft “savings” of insource versus outsource models
• Compare current risk and cost to strategic goals
Finalize (typically 4-6 weeks)
• Develop business case, based on full analysis, to identify and support best administration approach
• Leverage documented business case to support action to select a technology offering (insource) or outsourced provider
Xerox Internal Use Only21 May 12, 2016
Mary Armstrong-FlippoNational Practice Leader, Absence & Productivity SolutionsEast [email protected]
Yvonne Breiter, MBADirector, ConsultantAbsence & Productivity SolutionsWest [email protected]
Questions