Small bswift finds healthy growth in connecting workers to benefits

A small Chicago company is leveraging its Web-based software to thrive in the competitive market of administering benefits online.

bswift LLC, a privately held technology company at 656 W. Randolph, makes the massive paperwork of human resources departments look like something from a bygone era.

National Surgical Hospitals switched to bswift's technology after two of its insurance carriers lost its employees' enrollment forms, even though National Surgical Hospitals confirmed the documents' delivery.

bswift's software tools do mundane tasks such as sending a report to the human resources director listing employees who have not finished their enrollment for health care benefits, as well as complicated tasks such as automatically bumping up the cost and amount of life insurance for an employee on the day he turns 40.

"Employees sign up for their benefits online, whether it's for health, dental, vision or other coverage, rather than getting books of paper and lots of forms to fill out," said Rich Gallun, the 41-year-old company president.

Each employee who signs up online sees only the benefits for which he or she is eligible, and can click into the online benefits plan information to find out the details that pertain to him, rather than leafing through catch-all lists, Gallun said.

The system lets employees choose the order in which they sign up for benefits, but it ensures that they complete the sign-up process.

bswift provides side-by-side comparisons of the employee's choice of benefit plans.

The technology sounds simple enough, but it is bswift's bread and butter, not an add-on to another business as is often the case with larger rivals, Gallun said.

bswift's software uses an Electronic Data Interface to transport data.

One of the biggest obstacles to online benefits is a lack of Web access by many employees, particularly those in manufacturing plants.

"Over time, we expect that to become less of an issue," Gallun said, noting that a recent Nielsen//Net Ratings study showed that nearly 75 percent of the U.S. population has Internet access at home.

The workplace-accessibility obstacle has yet to slow bswift's growth, however. The company got its start nine years ago after Michael Sachs founded a health-care information database firm in Evanston.

Sachs and Gallun set up the benefits enrollment system. The system evolved into its own company, initially called Platinum Health Care. Platinum won a "best e-commerce solution" award from Microsoft in 1999, and evolved into bswift the next year.

The company has moved its offices a few times, but it landed a year-and-a-half ago in the fashionable West Loop. The company plans to nearly double its 15-member work force this year, thanks to investors who plow revenues back into the business.

bswift is backed by 13 private investors, including Sachs. Gallun considers its lack of venture capital a blessing, because the investors look at the company from a long-term perspective.

The company's revenues jumped 45 to 50 percent from 2003 to 2004. Since the company is privately held, Gallun would say only that annual revenues are less than $5 million. The company is breaking even, with cash revenues equal to expenses.

The company initially sold its technology indirectly through health care insurance brokers, but it now is more actively marketing itself to employers at trade shows and via direct marketing campaigns.

bswift survived the dot-com boom, when as many as 100 companies tried to sell some type of online benefit enrollment services. Now, 15 to 20 companies survive, the largest of which are ADT, PeopleSoft and Ceridian.

Author(s): Sandra Guy
Date: February 9, 2005
Page: 80 Section: Financial