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District Finds Crucial Compliance Support by a Switch to American Fidelity

 

January 25, 2022

4 minute read

Category: Customer Stories

 

Surprises are supposed to be exciting. But some surprises, like finding out a benefits vendor has walked out without notice, is not, especially if you’re the school business administrator. How do you help your staff when their Flexible Spending Account (FSA) funds are inaccessible, and compliance of your benefits program is on the line? One district discovered it’s possible to have a full plan takeover in the middle of the year and have record increases in employee participation overnight.

At a crucial time when Waynesboro Area School District was left without a provider mid-plan year, Business Administrator Eric Holtzman needed a partner to call on.

The Challenge

Waynesboro Area School District worked with a third-party vendor to administer their Section 125 program. In the middle of the plan year, and without notice, the vendor abandoned the district. This put the district’s benefits program in a compliance hotspot. At the time the previous provider left, 118 reimbursement account participants suffered too, as they had committed FSA funds and temporarily couldn’t access them.

Without a fully-dedicated benefits team, Waynesboro needed a reliable partner to help oversee their program and ensure compliance. It was simply too much for an already stretched staff.

Participation in the district’s benefits program was at 24%. Not only were employees missing out on benefits education to help them make smart buying decisions, but the low participation also meant the district wasn’t able to maximize on the tax-savings Section 125 plans offer.

Eric says, “When we were using the previous administrator for these plans, it was really a transactional situation – a matter of checking boxes and completing required paperwork with no clear plan, no clear-cut goals.”

The district needed a partner who could come in quickly and help.

Our Solution

A switch to American Fidelity meant securing a benefits partner, not just working with another vendor. With very little notice, American Fidelity stepped in to provide Section 125 administration services, employee education, and the vital ongoing support that’s required to maintain a compliant Section 125 plan.

“We chose American Fidelity because of their experience, their expertise, and their ability to partner with the district to create a strategic partnership,” says Eric.

With about two weeks’ notice, American Fidelity was on site at Waynesboro schools with three representatives and made the transition as smooth and as fast as possible.

Eric noted “They were able to provide opportunities for employees, save the district money, and ensure we were following all requirements of Section 125 plans.”

Previously, Waynesboro didn’t have the kind of individual support American Fidelity provides to schools. And for a lot of Pennsylvania districts, HR department aren’t staffed to handle all aspects of a benefits program.

“We were able to effectively leverage American Fidelity to provide the services and become an extension of our district’s team. We appreciate those conversations because it helps us to become more informed and it shows that they truly value us and see us as a partner,” said Eric.

Their Results

By partnering with American Fidelity for individual benefits education, Waynesboro’s employee participation in their Section 125 program increased by 85%. This increase in participation resulted in $100,000 annual savings to the district.

Eric states, “On a year-over-year basis, savings will be near $500,000 after five years.”

While employee demographics remained consistent between the previous vendor and American Fidelity, the difference was in employee education.

“American Fidelity sits down and talks to employees to understand their concerns and finds solutions to help solve them. By looking at the district’s entire benefits program, including their health insurance, representatives can help employees make informed decisions,” said Eric.

For Eric Holtzman, a priority was giving his staff a little more certainty in life. “As a business administrator, you’re always trying to work hard to make sure your staff and employees have what they need. American Fidelity helped me accomplish that.”

 

This blog is up to date as of January 2022 and has not been updated for changes in the law, administration or current events.

 
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https://americanfidelity.com/blog/stories/case-study-eric-holtzman/

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