U. to oursource part of benefits dept.

Thirteen full-time employees will be affected by the move, but all are expected to get other jobs at Penn. The University will outsource a small but key part of the department which provides benefits to about 10,000 Penn faculty and staff to a national benefits management company, officials said yesterday. In an effort to offer higher quality service and improve its compliance with government regulations, the University has outsourced an important component of the benefits administration department in its Division of Human Resources to Hewitt Associates, a national leader in benefits management. Employees of the University of Pennsylvania Health System will not be affected by this deal, because their benefits are administered through a separate human resources department. Vice President for Human Resources Jack Heuer said that none of the department's 13 full-time employees are expected to lose their jobs with Penn, though some may be switched to other departments. Illinois-based Hewitt, which manages benefits administration for companies such as Citibank, Digital Electronics Corp. and 3M, has handled benefits data management at Penn since 1986. Under the new agreement, effective October 12, the company will handle customer service and relations with the 14 benefits providers with which the University is contracted, including Blue Cross/Blue Shield and Aetna USHealthcare. "They've been at this for a long time," Executive Vice President John Fry said of Penn's new partners. "This is something a lot of organizations are doing -- we feel like we're in good hands." Penn officials said customer service concerns and more complex regulations in the benefits industry prompted the outsourcing decision. Heuer noted that there have been complaints about customer service -- including poor response time on telephone inquiries to the benefits office -- while Fry emphasized that Penn does not have the resources in-house to "manage relationships" with the insurance companies and health maintenance organizations that provide employee care. "We bring a lot of experience from our other clients," said Linda Schievelbein, the "project implementation leader" at Hewitt handling the Penn account. "It's expensive to buy that much talent in benefit delivery if you keep it in-house." The outsourced department currently employees 13 full-time and seven temporary workers, Heuer said, adding that he has hired temporary workers to fill job vacancies since becoming vice president last November in order to minimize the impact of the move. "I don't expect anyone to lose their job," Heuer said, maintaining that displaced employees will be offered jobs elsewhere in Human Resources or other University offices. Employees remaining in Benefits Administration will continue to be employed by Penn, not Hewitt. Several department employees would not comment on the outsourcing move. Schievelbein said that six Hewitt associates are currently being trained to handle the customer relations duties for the department, in addition to one customer service manager and another associate to train the new staff. Heuer said that since "change makes people nervous," both the department staff and Penn employees who receive benefits through the University were consulted during the outsourcing discussions. Faculty Senate Chairperson John Keene said that he was pleased with the consultation process. "The firm that the University hired is one of the most experienced firms [in the industry]," said Keene, a professor of City and Regional Planning. "The reasons [for outsourcing] were sound and we appreciated the opportunity to review it." However, Keene cautioned that the administration must still "monitor" Hewitt's work for quality. Though Hewitt currently administers benefits programs for 115 organizations -- including many Fortune 500 companies -- Schievelbein said Penn is the first academic institution with which her company has worked. But Schievelbein does not know if this agreement will signal Hewitt's entry into the higher-education market. "We'll see what happens in the future," she said. Heuer and Schievelbein said the outsourcing agreement involves a straight payment of fees to Hewitt for services to be rendered, but that the exact details are still under discussion.

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