The New Summary Plan Description Process

hr.com
Mike Byers
July 21, 2007

"Time-consuming, manually intensive and costly" is how TJX described its current process to develop and maintain detailed Summary Plan Descriptions (SPDs) for communicating dozens of benefit plans to employees in preparation for open-enrollment season.

The world's largest off-price apparel and home goods retailer, with more than 110,000 employees worldwide, faced a common challenge every fall: Plan providers deliver the program design updates for the following year, and in turn, TJX's benefit teams translate these details into SPDs.

Some benefit programs - like medical plans - change significantly from year to year. Others are only slightly altered. Regardless, identifying the differences is often done by comparing three-ring binders or Word documents page by page - across dozens of plans, even when there's no switch in providers.

With open-enrollment dates set in stone, late receipt of suppliers' plan details further compounds the crunch.

SPDs are more than just essential for ensuring that employees are participating in the most appropriate health and wellness programs. They're demanded by union groups and required by law; fines for non-compliance can be hefty.

Last year, TJX's benefit team decided to invest in a new approach.

The Devil Is in the Details

The TJX benefits team tapped HighRoads' technology-based solution to unlock plan information from their three-ring binders and make it searchable and easily updated.

It required a one-time investment to migrate to a new SPD management approach, which was offset by the team's new ability to update entire sections and specific language, in batches. This year and the year after, the process will be downright easy.

In the long-term, TJX will gain a visible audit trail for full compliance, lowering legal fees.

A Universally Broken HR Process

Most HR professionals feel the annual pain that comes with processing SPD's. Communicating the scope of health and welfare benefits plans - from the type of plans and what's covered to how much co-payments or deductibles will take out of employees' pockets - is a requirement regulated by law. These SPD documents need to be ready when they are requested by employees, union leaders or beneficiaries.

Successfully meeting these deadlines assumes that all elements fall into place with no hiccups. Pricing and design information is typically received from carriers in June or July, giving benefit teams a three to four month head-start. However, all too often companies don't receive this information until sometimes as late as October, leaving a very small window to translate changes into the SPD.

Compounding the challenge, large- and mid-sized organizations often grapple with disparate data sources, varying plan options and the constant evolution of plan provisions. This makes the creation and ongoing maintenance of 200+ page documents an incredibly tedious process.

Updates aren't easy either. Provision changes don't run holistically across plans. For instance, if new policies on medical leave are implemented, all SPDs containing this information would need to be updated. This requires even more labor-intensive activity to sort and compare dozens of different plans and documents, to ensure every one is up-to-date.

Without tapping technology like HighRoads' SPD designer solution, this process is intensely manual, wrought by hand-offs and double checking. The potential for human error is enormous.

The Transformation of HR: Moving Beyond Administration

We've worked hand-in-hand with so many innovative enterprises in the past several years, and it's consistently amazing to witness how an incredibly fragmented business process can evolve into one of the most efficient.

The case of TJX is no exception. Within days, we worked together to devise a plan that would alleviate the pain associated with SPDs and streamline the entire process, shaving both time and costs.

Leveraging the TJX team's core knowledge of their SPD catalog and templates that identify which sections are common across multiple SPDs, we were able to turn around new SPDs in a fraction of the time required by the traditional approach.

Now, when sections need to be built across more than one plan, TJX can do it simultaneously - an immediate upgrade over the repetitive process of stacking papers and placing them into binders over and over again. If there is a change to a COBRA provision across multiple SPD documents, the team can make the change in one area - and it's automatically plugged into the other SPDs in seconds.

TJX now has core templates for different plan types and has migrated current SPDs for batch updates in a fraction of the time -- while gaining a sustainable platform for future seasons. The efficiencies of its new process will compound, year after year, as changes become merely a matter of plug-and-play.

Perhaps the biggest win? TJX gained new control to pool HR resources more efficiently - and focus them on the strategic initiatives that bring value to the organization.