One of the biggest headaches for any human-resources department is the annual preparation of booklets for employees that summarize their health benefits and 401(k) coverage, as required by federal law. Compiling these summary plan descriptions takes hundreds of human-resources staff hours, requiring personnel to triple-check the thousands of variables that go into benefit plans. The tab for printing and distributing the updates can easily reach into the tens of thousands of dollars, even for small companies.
To help HR departments cope with the load, Authoria Inc. this week will unveil software that automates the process of developing these descriptions and lets companies deliver them online or via E-mail. The software, called eSPD, leads HR users through question-and-answer sessions and, based on their responses, automatically generates a plan that complies with the Employee Retirement Income Security Act (ERISA). Variables such as deductibles are kept in a database; as they change, the electronic summary plan description is automatically updated. HR professionals also can update the resulting PDF file as their own or government policies change, and the software archives past documents, should questions arise about claims made under previous policies.
Authoria says it hired HR and benefits experts to work on content for the software to ensure accuracy. But James McElligott, a partner in the law firm McGuire Woods LLP and a specialist in employee retirement issues, says companies should still have their lawyers, actuaries, and boards of directors read and review the results. Says Woods, "What's important is getting the legal pieces correct."
Authoria expects companies will see their biggest savings in printing and distribution costs. A company of 10,000 people spends about $500,000 annually on summary plan descriptions--roughly the cost of eSPD, including updates reflecting changes to ERISA, the vendor says.
ESPD duplicates 80% of the con-tent found in the company's flagship HR and benefits product, Authoria HR. Users of that software can import data into eSPD to create online versions of plan descriptions.