Tym Gilbertson
BUS-1010-042-F14
B Chelemes
Term Paper
Cafeteria and Welfare Benefits Manager
For my project, I focused on creating a new position within my company, a TPA (third party administrator) that currently only offers retirement benefits administration. This new position would focus on Cafeteria Plan Benefit administration for our current retirement clients as well other businesses. The position would be the manager of a whole new department and be responsible for all aspects of this department (budget, sales, employee management, administration, etc.). Currently, I work as a retirement benefit account administrator for the company but I have a strong background in cafeteria plan benefits administration. Our TPA has clients that have asked if we administered cafeteria benefits and up until now, they were being sent on to other TPA’s for this service. All of these other TPA’s (National Benefit Services, Benex, MGIS, Health Equity) are our competitors who also administered retirement benefits. Creating this position would allow us offer a one stop shop for our current clients, be competitive with our competition and keep our current clients away from this competition.
Job Description: This new position would require a lot of research to find out what is needed to open up this new department. I will need to research all of the software platforms (Sungard’s Relius Administration and 1Cloud’s Benny Central software for debit cards are great platforms) required to administer the services we are developing. I will need to research current price structures from our main competition so I can market our price structure to be competitive. I also need to see if this new position is a viable option at these prices. It does not make any sense to offer a service at a price that will not make a profit.
This new position will require knowledge of the day to day processes for this service. I need to know how to process claims, payroll and payouts. I also need to know all of the IRS regulations on how to administer cafeteria plans (The United States Code 125 outlines Cafeteria Plan Benefit administration guidelines) as well as how to create all of the necessary documents our clients need to stay compliant (Woltors Kluwer’s F.T. Williams cloud based document manager is what we used for retirement plan documents and they offer services for cafeteria plan documents as well). The position will also require managerial skills for any employees that will be working in the department. Finally, this new position will require sales and marketing skills to help our current clients understand the benefits of this new product as well as going out to find new clients.
General career path: In order to get to this position, you would normally start out at the entry level positions in a TPA offering this service. Usually this is a claims processor or customer service rep. At this entry level position, you will learn all of the basics of the customer care aspect of a cafeteria plan: (claims processing, eligible expenses, etc.)This is a great way to ease into all of the internal workings of cafeteria plan benefits.
The next step up on the totem pole would be the assistant account manager. This position would allow you to expand your knowledge of how cafeteria plan benefits work. You get experience with the payroll withholding processing, new employee enrollment and terminated employee departures, debit card ordering and advance claim adjudication. You will be introduced to the basics of plan management. You will field calls from participants who have questions that cannot be answered by the call center. Most of these questions will center on plan specific requirements (each business can customize their plan to fit their needs and the call center cannot be expected to know all of these differences.) Some of the calls will have customers that are upset about their plan so you will learn how to handle upset clients, conflict resolution and crisis management. You may also start to field calls of higher importance for the account manager in the case of their absence.
After you have learned this position you can move up to an account manager. This position puts you more into the higher up workings of the cafeteria plans. In this position, you move away from the day to day workings of the cafeteria plans and into the maintenance side of the business. You will begin dealing with the HR department and upper management of the businesses that are your clients. You will be asked specifics on how cafeteria plans work, what the IRS regulations are and how you can improve their plans.
This position requires you to be proactive with your job duties. At the lower positions, you are reactive (you get a payroll, you process it, you get a phone call, you answer the question.) In this position, you need to proactively meet deadlines for your clients. You need to send out monthly plan status reports. You will need to test the plan annually to make sure the plan is in compliance. You will need to research daily to keep up with any IRS changes to the code. You will need to reconcile the plan annually and report back to your client on the plan status. Every year you need to attend enrollment meetings and have all of the necessary paperwork for your clients to pass on to their employees. You will also need to file annual tax forms for the plan if the plan requires it.
You will be responsible for the actions of your assistant account manager but you will not necessarily be their boss. You cannot hire or terminate this employee as this is the responsibility for the Team leader or Department manager, but you will be responsible for their mistakes on the plan so some managerial skills will be required. You also need some sales skills when you speak with your current plans about new or different products if their needs change.
After this, you can move on to the department head. If you are in an existing department, this may be called a Team Leader, VP or Department Manager. However, because I am creating a new department, I will be all of these positions at the same time until the department grows enough to expand and hire on new employees
General education and experience required for this career: In the industry, the final position I am researching will require at least a Bachelor’s Degree as well as proficient computer skills. However, you could skirt this requirement as I have done by working up from the bottom with only an Associate’s Degree, using my experience as a supplement and a promise to obtain my Bachelor’s within a certain time frame.
You need at least a high school diploma and decent computer skills to get in at the entry level positions and in order to move up to the next levels, you will need an Associate’s Degree. You will get the experience and knowledge for the cafeteria benefits as you work your way through the ranks.
Average Salary: Because I am creating this position from ground up, there is no real data for the average salary of this position. Instead, I have focused on positions in other TPA’s that have similar job responsibilities to the position I am creating. The salary range is quite large because it all depends on how much you do for the company. I learned from my interview with James Hubbard that the position of Team Leader (a position that he held at NBS) will only earn between $40K and $60K per year. As a vice president of the department, you should make above $50K and your salary could reach into the $100K range depending on how large the department is, how many team leaders you manage and if you cross over into other welfare benefits (COBRA, Wellness Benefits, etc.). One vice president at a competing TPA in my immediate area receives a salary in the $100K range because he is also the VP of the COBRA benefits for the firm (this is the position held by a mutual friend of both mine and James – name withheld upon request).
As I developed this new position/department and entered into salary negotiations with the owners, I was able to procure a different type of income structure all together. Because I was going to be out selling their product with no wholesale backup, I opted for a lower than average salary ($50K/year) that was supplemented with a percentage of the year’s annual billing (10% of annual billing calculated quarterly). With this structure, the sky is the limit on how much I can earn. It all depends on me bringing in more clients.
Career outlook: Cafeteria plans have been in existence for decades and there is no sign of them going away. In fact, with the amount of interest President Obama’s Patient Protection and Affordable Health Care Act (PPACA) has garnered across the nation in the past years, the chances of this career disappearing any time soon is almost zero. As the PPACA continues to redefine the IRS section 125, many employers will not be able to keep up with all of the changes and will begin looking for an outside source to handle this for them. In the industry, only TPA’s and a few Accounting Firms are interested in keeping up with all of these changes. Insurance Companies keep up with the changes that relate to their products, but do not have the time, resources, or the desire to provide the changes that each company needs to implement in all of their products (especially products that they do not provide). Accounting Firms only keep up with how much tax savings each company can accrue and also are not interested in the legal side of Section 125. Some law firms will wade into it but with the amount they charge for their services, it is not always a viable option.
Enter the TPA. Specializing in record keeping and maintenance of the legal documents required to operate a Cafeteria Plan, along with our more reasonable fee schedules for these services, we are the perfect response for companies looking to offload the responsibility of maintaining their Cafeteria Plan. The only way this new career could fail is if I allow it to fail.
Bio of someone in the profession: James Hubbard has worked in the Cafeteria Plan Benefits for over 10 years. He is my mentor for this profession and I would not be where I am today without his help. Before I began working at my current employer, I was hired as an assistant account manager by James at another TPA. James was a Team Leader in the Cafeteria Benefits department. He had managerial responsibilities over five Account Managers, five Assistant Account Managers, one Claims Adjudicator and four customer service representatives. James had been working at this TPA for five years before hiring me and his wealth of knowledge was paramount to my success. All of the information that I reported on in the Career Path, General Education, and Average Salary sections came from my personal interview with him (over lunch – my treat). After one year, James gave me the opportunity to move into the Account Manager position. Unfortunately, shortly after this promotion, James was terminated from employment with this TPA for inappropriate conduct with a co-worker. To this day, James maintains that the accusations towards him were false and he should not have been terminated (shortly after James’ termination, the employee that accused James was terminated for making false claims against another employee.) James has never told me if our former employer every apologized for their actions or not. James immediately bounced back from his termination by accepting a job with my current employer and competing TPA, Alliance Benefit Group Rocky Mountain (ABGRM). James actually started laying the groundwork for my new department before I even started at ABGRM. After working for ABGRM for 18 months, James was offered a position within a family business that was too good to pass up. It was at this time that James rewarded my loyalty to him by recommending me to replace him in his current position. James has been a great resource in continuing to develop this new department by referring to me contacts he has made for the software, legal document creation, audit assistance and other areas.
My fit in this Career: Before opening this department, I had more than two years of experience in Cafeteria Benefits from my previous employment at a competing TPA. I have all of the knowledge and expertise needed to manage Cafeteria and Welfare Benefits. Prior to selling insurance, I was a manager in the oil and gas industry. Having to manage workers in an office setting is nothing compared to managing employees out in the oil fields. When the recession hit and I had to work multiple jobs to stay afloat, I learned a lot about sales by selling cars and insurance. All of these skills combined with James’ recommendation give me the best shot at making a successful department for my employer. I believe this is why they gave me the chance when they were lukewarm about it with James.
Sources. 1 –26 USC §125
2 – CCH Incorporated Wolters Kluwer (2007) F.T. Williams [Cloud Based software]. Milwaukee, WI.
3 – Competitors we have sent clients to in the last five years that offer the same services:
National Benefit Services (NBS), Benex, MGIS, Health Equity
4 – Evolution1 – a WEX Company (2014) – BennyTM Central [Cloud Based software]. St. Louis, MO.
5 – Hubbard, J. - Personal Interview with James Hubbard (J. Hubbard, personal communication, November 10th, 2014)
6 – Sungard Data Systems (2002 ). Relius Administration Solutions for retirement services [computer software]. Calabasas, CA.
7 – United State Department of Labor, “2013 Instructions for Form 5500 Annual Return/Report of Employee Benefit Plan.” 22 Nov. 2012. Web.17 Nov. 2014
BUS-1010-042-F14
B Chelemes
Term Paper
Cafeteria and Welfare Benefits Manager
For my project, I focused on creating a new position within my company, a TPA (third party administrator) that currently only offers retirement benefits administration. This new position would focus on Cafeteria Plan Benefit administration for our current retirement clients as well other businesses. The position would be the manager of a whole new department and be responsible for all aspects of this department (budget, sales, employee management, administration, etc.). Currently, I work as a retirement benefit account administrator for the company but I have a strong background in cafeteria plan benefits administration. Our TPA has clients that have asked if we administered cafeteria benefits and up until now, they were being sent on to other TPA’s for this service. All of these other TPA’s (National Benefit Services, Benex, MGIS, Health Equity) are our competitors who also administered retirement benefits. Creating this position would allow us offer a one stop shop for our current clients, be competitive with our competition and keep our current clients away from this competition.
Job Description: This new position would require a lot of research to find out what is needed to open up this new department. I will need to research all of the software platforms (Sungard’s Relius Administration and 1Cloud’s Benny Central software for debit cards are great platforms) required to administer the services we are developing. I will need to research current price structures from our main competition so I can market our price structure to be competitive. I also need to see if this new position is a viable option at these prices. It does not make any sense to offer a service at a price that will not make a profit.
This new position will require knowledge of the day to day processes for this service. I need to know how to process claims, payroll and payouts. I also need to know all of the IRS regulations on how to administer cafeteria plans (The United States Code 125 outlines Cafeteria Plan Benefit administration guidelines) as well as how to create all of the necessary documents our clients need to stay compliant (Woltors Kluwer’s F.T. Williams cloud based document manager is what we used for retirement plan documents and they offer services for cafeteria plan documents as well). The position will also require managerial skills for any employees that will be working in the department. Finally, this new position will require sales and marketing skills to help our current clients understand the benefits of this new product as well as going out to find new clients.
General career path: In order to get to this position, you would normally start out at the entry level positions in a TPA offering this service. Usually this is a claims processor or customer service rep. At this entry level position, you will learn all of the basics of the customer care aspect of a cafeteria plan: (claims processing, eligible expenses, etc.)This is a great way to ease into all of the internal workings of cafeteria plan benefits.
The next step up on the totem pole would be the assistant account manager. This position would allow you to expand your knowledge of how cafeteria plan benefits work. You get experience with the payroll withholding processing, new employee enrollment and terminated employee departures, debit card ordering and advance claim adjudication. You will be introduced to the basics of plan management. You will field calls from participants who have questions that cannot be answered by the call center. Most of these questions will center on plan specific requirements (each business can customize their plan to fit their needs and the call center cannot be expected to know all of these differences.) Some of the calls will have customers that are upset about their plan so you will learn how to handle upset clients, conflict resolution and crisis management. You may also start to field calls of higher importance for the account manager in the case of their absence.
After you have learned this position you can move up to an account manager. This position puts you more into the higher up workings of the cafeteria plans. In this position, you move away from the day to day workings of the cafeteria plans and into the maintenance side of the business. You will begin dealing with the HR department and upper management of the businesses that are your clients. You will be asked specifics on how cafeteria plans work, what the IRS regulations are and how you can improve their plans.
This position requires you to be proactive with your job duties. At the lower positions, you are reactive (you get a payroll, you process it, you get a phone call, you answer the question.) In this position, you need to proactively meet deadlines for your clients. You need to send out monthly plan status reports. You will need to test the plan annually to make sure the plan is in compliance. You will need to research daily to keep up with any IRS changes to the code. You will need to reconcile the plan annually and report back to your client on the plan status. Every year you need to attend enrollment meetings and have all of the necessary paperwork for your clients to pass on to their employees. You will also need to file annual tax forms for the plan if the plan requires it.
You will be responsible for the actions of your assistant account manager but you will not necessarily be their boss. You cannot hire or terminate this employee as this is the responsibility for the Team leader or Department manager, but you will be responsible for their mistakes on the plan so some managerial skills will be required. You also need some sales skills when you speak with your current plans about new or different products if their needs change.
After this, you can move on to the department head. If you are in an existing department, this may be called a Team Leader, VP or Department Manager. However, because I am creating a new department, I will be all of these positions at the same time until the department grows enough to expand and hire on new employees
General education and experience required for this career: In the industry, the final position I am researching will require at least a Bachelor’s Degree as well as proficient computer skills. However, you could skirt this requirement as I have done by working up from the bottom with only an Associate’s Degree, using my experience as a supplement and a promise to obtain my Bachelor’s within a certain time frame.
You need at least a high school diploma and decent computer skills to get in at the entry level positions and in order to move up to the next levels, you will need an Associate’s Degree. You will get the experience and knowledge for the cafeteria benefits as you work your way through the ranks.
Average Salary: Because I am creating this position from ground up, there is no real data for the average salary of this position. Instead, I have focused on positions in other TPA’s that have similar job responsibilities to the position I am creating. The salary range is quite large because it all depends on how much you do for the company. I learned from my interview with James Hubbard that the position of Team Leader (a position that he held at NBS) will only earn between $40K and $60K per year. As a vice president of the department, you should make above $50K and your salary could reach into the $100K range depending on how large the department is, how many team leaders you manage and if you cross over into other welfare benefits (COBRA, Wellness Benefits, etc.). One vice president at a competing TPA in my immediate area receives a salary in the $100K range because he is also the VP of the COBRA benefits for the firm (this is the position held by a mutual friend of both mine and James – name withheld upon request).
As I developed this new position/department and entered into salary negotiations with the owners, I was able to procure a different type of income structure all together. Because I was going to be out selling their product with no wholesale backup, I opted for a lower than average salary ($50K/year) that was supplemented with a percentage of the year’s annual billing (10% of annual billing calculated quarterly). With this structure, the sky is the limit on how much I can earn. It all depends on me bringing in more clients.
Career outlook: Cafeteria plans have been in existence for decades and there is no sign of them going away. In fact, with the amount of interest President Obama’s Patient Protection and Affordable Health Care Act (PPACA) has garnered across the nation in the past years, the chances of this career disappearing any time soon is almost zero. As the PPACA continues to redefine the IRS section 125, many employers will not be able to keep up with all of the changes and will begin looking for an outside source to handle this for them. In the industry, only TPA’s and a few Accounting Firms are interested in keeping up with all of these changes. Insurance Companies keep up with the changes that relate to their products, but do not have the time, resources, or the desire to provide the changes that each company needs to implement in all of their products (especially products that they do not provide). Accounting Firms only keep up with how much tax savings each company can accrue and also are not interested in the legal side of Section 125. Some law firms will wade into it but with the amount they charge for their services, it is not always a viable option.
Enter the TPA. Specializing in record keeping and maintenance of the legal documents required to operate a Cafeteria Plan, along with our more reasonable fee schedules for these services, we are the perfect response for companies looking to offload the responsibility of maintaining their Cafeteria Plan. The only way this new career could fail is if I allow it to fail.
Bio of someone in the profession: James Hubbard has worked in the Cafeteria Plan Benefits for over 10 years. He is my mentor for this profession and I would not be where I am today without his help. Before I began working at my current employer, I was hired as an assistant account manager by James at another TPA. James was a Team Leader in the Cafeteria Benefits department. He had managerial responsibilities over five Account Managers, five Assistant Account Managers, one Claims Adjudicator and four customer service representatives. James had been working at this TPA for five years before hiring me and his wealth of knowledge was paramount to my success. All of the information that I reported on in the Career Path, General Education, and Average Salary sections came from my personal interview with him (over lunch – my treat). After one year, James gave me the opportunity to move into the Account Manager position. Unfortunately, shortly after this promotion, James was terminated from employment with this TPA for inappropriate conduct with a co-worker. To this day, James maintains that the accusations towards him were false and he should not have been terminated (shortly after James’ termination, the employee that accused James was terminated for making false claims against another employee.) James has never told me if our former employer every apologized for their actions or not. James immediately bounced back from his termination by accepting a job with my current employer and competing TPA, Alliance Benefit Group Rocky Mountain (ABGRM). James actually started laying the groundwork for my new department before I even started at ABGRM. After working for ABGRM for 18 months, James was offered a position within a family business that was too good to pass up. It was at this time that James rewarded my loyalty to him by recommending me to replace him in his current position. James has been a great resource in continuing to develop this new department by referring to me contacts he has made for the software, legal document creation, audit assistance and other areas.
My fit in this Career: Before opening this department, I had more than two years of experience in Cafeteria Benefits from my previous employment at a competing TPA. I have all of the knowledge and expertise needed to manage Cafeteria and Welfare Benefits. Prior to selling insurance, I was a manager in the oil and gas industry. Having to manage workers in an office setting is nothing compared to managing employees out in the oil fields. When the recession hit and I had to work multiple jobs to stay afloat, I learned a lot about sales by selling cars and insurance. All of these skills combined with James’ recommendation give me the best shot at making a successful department for my employer. I believe this is why they gave me the chance when they were lukewarm about it with James.
Sources. 1 –26 USC §125
2 – CCH Incorporated Wolters Kluwer (2007) F.T. Williams [Cloud Based software]. Milwaukee, WI.
3 – Competitors we have sent clients to in the last five years that offer the same services:
National Benefit Services (NBS), Benex, MGIS, Health Equity
4 – Evolution1 – a WEX Company (2014) – BennyTM Central [Cloud Based software]. St. Louis, MO.
5 – Hubbard, J. - Personal Interview with James Hubbard (J. Hubbard, personal communication, November 10th, 2014)
6 – Sungard Data Systems (2002 ). Relius Administration Solutions for retirement services [computer software]. Calabasas, CA.
7 – United State Department of Labor, “2013 Instructions for Form 5500 Annual Return/Report of Employee Benefit Plan.” 22 Nov. 2012. Web.17 Nov. 2014