You might argue that Benefitfocus is a 14-year overnight successstory.

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Shawn Jenkins does.

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When Jenkins, along with Mason Holland, founded the company backin 2000 — setting up shop in an abandoned Walmart building inCharleston, S.C. — he quietly began revolutionizing the benefitsindustry through the company's cloud-based technology.

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They founded Benefitfocus on a simple premise.

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“Our idea was simply — and still is — that it ought to be easyfor an employer to manage all their benefits — all types ofbenefits — in one place through technology. … We thought theemployee and their families should be able to understand thosebenefits and get multiple ways of communication,” says Jenkins, thecompany's CEO and president. “We set out to build a better way. Andwe built a web-based software platform for electronic enrollmentand eligibility management.”

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Simply put, Benefitfocus aimed to take the “administrativeclunkiness” out of benefits. They wanted to make it easy, theywanted to make it mobile, and they wanted to make it fun.

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They picked up some customers, got some attention from carriersand employers, and gained a small foothold. But for years, mostpeople, Jenkins admits, still hadn't heard of Benefitfocus. Thefounders hung around, knowing they had a good concept, and thecompany gradually grew.

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Then things got more complex. The Patient Protection andAffordable Care Act was getting off the ground, voluntary benefits were the talk of theindustry, and exchanges became part of the picture. More peoplewere confused and frustrated with the way things were going.

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And that's when things got good for Benefitfocus. People werelooking for ways to manage all the complexity using technology,Jenkins explains. And his company was eager to help.

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“The additional complexity, the compliance, the constantchanging and churning of the rules [in PPACA] is kind oftailor-made for technology,” Jenkins, 46, says. “It's been a bigtail wind for us.”

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“We’re one of these success stories where we were quietly doingthe work and building the infrastructure on the products and themarket kind of lined up for us, and it's been great. We’ve grownexceptionally well and we’re just proud,” he says. “As a founder,it's been fun to build a great team, a great culture, and solve abig, big problem.”

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Success, after that, came fast: In 2013, after approachingnearly $100 million in revenue, Benefitfocus went public (it'sunder the ticker BNFT) and revenues surged. Today, Benefitfocus hasfour other offices — in San Francisco; Jenks, Okla.; Greenville,S.C.; and Hyderabad, India — in addition to its 40-acre campus inCharleston. The company has more than 1,000 associates. And 23million people now belong up in the (Benefitfocus) cloud.

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How it works

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Benefitfocus offers its clients a cloud-based subscriptionservice to help them manage and streamline their benefits plans,and in so doing, has become one of the largest benefits softwarecompanies in the United States. It offers two basic products — onefor employers (among the company's clients are Under Armour, NewBalance, Dannon, Triumph Foods and Brooks Brothers) and one forcarriers (it works with Prudential, MetLife, UnitedHealth and morethan 30 BlueCross partners, among others).

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Electronic billing, enrollment, sales and access to informativevideos, health news and tips are all part of the Benefitfocusplatform, which Jenkins describes as the “Apple version” ofbenefits. The company gives consumers the opportunity to managetheir benefits in one place, on a computer or a mobile device, muchlike they would with their music library.

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“The platform is really similar to the Apple App Store or theAndroid store; and we’re kind of a laboratory ourselves — we havemultiple health plan options, dental, vision, critical illness,LifeLock, an array of other products,” Jenkins says.

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What makes Benefitfocus different than other benefits software,he says, is that it puts voluntary products at the forefront duringenrollment.

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“As I enrolled myself this last year for my family, as soon as Iselected my health plan — I selected a high-deductible health plan, and itautomatically recommended Allstate's critical illness plan to helpfill in some of the gaps — so I selected that and continued on withthe rest of my enrollment.”

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The fact that the platform offers more than just a couple ofhealth plan options is part of its success. Jenkins cites theimportance of voluntary benefits for all parties involved —employers, brokers, carriers and consumers.

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“We’ve taken voluntary benefits from kind of a sideshow andwoven them directly through our recommendation and put them rightat the point where people are making those critical decisions,”Jenkins says. “We can explain it through video — we have greatvideos that explain the capability. We are seeing incredibleincreased participation in these programs because of the ability tomake it seamless. A lot of it has to do with technology that ismaking it seamless.”

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Technology, of course, is the company's central theme. Jenkinstalks a lot about the company's “fantastic software” and itsinvestment in engineering and product development. Benefitfocusdoes four major software releases a year.

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“Every 90 days we’re updating the platform for new regulations,new benefits support, new user experience capability — the marketlooks at how they can modernize their benefits platforms,” Jenkinssays.

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That technology, says April Floyd, benefits manager at UnderArmour in Baltimore, has allowed her company to streamlinecommunications to all employees by getting them more involved.

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“My benefits team has elevated drastically since we no longerhave to spend time helping our many teammates make benefitelections and changes nor do we have to answer day-today-questions. Teammates can do it independently,” she says.

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“We may pay a lot of money for our employees’ benefits but ifthey don't know about them, then it's not really a value. We wantto make sure they understand how rich their benefits are,” Floydsays.

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Frankly, technology is a long time coming for the benefitsindustry, Jenkins says.

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“In other industries, we’ve certainly seen technology comethrough — whether it's the music industry or the travel industry,”Jenkins says. “But the benefits industry is much bigger than themusic industry or air travel — so it's taking longer. But it'svital. You need to be on the right side of the technologyequation.”

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‘All in this together’

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Besides technology, another aspect that sets Benefitfocus apartis the fact that it's finding success embracing regulatory changesinstead of running from them. Not to say it's not a challenge.

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“The Affordable Care Act is a big tail wind for us,” Jenkinssays. “It wasn't necessary for our growth — benefits administrationwas ready for cloud-based technology, so that was happening anyway— but the right technology platforms that can adapt to thosechanges can further help the customer base.

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“As the market looks at how they can modernize their benefitsplatforms from the carrier, employer or broker standpoint, theyrealize they need a flexible tool that's constantly improving, andthe more regulation, the more confusing it is, it helps ourbusiness,” he says. “It's a big thing to keep up with.”

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Brokers are also a vital piece of the puzzle. And they’reincreasingly choosing to work with the platform, Jenkins says.

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“An employer wants an array of benefits — they want a platform.As an independent broker, it may be difficult to invest tens ofmillions of dollars to invest in relevant technology in the cloud.What these brokers are finding is, with Benefitfocus, they can useus and they’re able to offer more than just two or three benefits —they can offer six or eight or 10, maybe more,” Jenkins says. “Andthey’re finding that the employer is appreciative because thebenefits administration costs are lower, the bills are accurate,and, more importantly for the broker, they are able to sell moreproducts.”

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Cheri Warnick, account manager for brokerage firm BenefitsControls of the Carolinas Inc., in Charlotte, N.C., says using thattechnology helps ease some of the increased workload she and otherbrokers at her firm have experienced due to PPACA.

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“Benefitfocus has helped us as a broker build strongerrelationships with our clients,” Warnick says. “It has takenworkload off of the client at marketing time. And it is easier forus to assist with enrollment, COBRA and employee notices.”

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Looking ahead

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It's safe to argue that Benefitfocus is indicative of changeshappening in the benefits business: The insurance industry spent anestimated $55 billion last year on software services, and companiesare relying more and more on technology as PPACA takes effect.Private exchanges — booming right now — areoften run by companies such as Benefitfocus.

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It's an opportunity Jenkins says is under-penetrated. Theircompetitors, he says are mostly internal legacy tech projects.

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“We’re mostly replacing a 10-year-old way of doing things,” hesays.

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Jory Delibac, benefits and retirement manager at the Dannon Co.,in White Plains, N.Y., says Benefitfocus is revolutionary in thebenefits world.

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“The thought of having one platform that captured everything todo with benefits would have never occurred to me,” she says. “Thiswill be the model for all other benefit platforms going forward ifthey want to stay competitive in the market.”

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As Jenkins sees it, the future of the industry can be summed upin two words: Technology and consumerism. Of course, he's investing heavilyin both.

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The real value in technology — mobile technology, in particular— Jenkins explains, is its “ability to consumerize these benefitsproducts. And that consumerism will be the massive, massive themefor our industry.”

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“It's a term that's been around for a while, but we’re reallyseeing it now, whether it's playing out in the private exchangemarketplace or with employers involved,” he says. “The idea ofconsumers needing relevant tools on their phone or on the web,understanding data, getting involved. All this drives growth inproduct selling, for brokers, for carriers and it helps employersand consumers.”

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“Benefits is the real topic now — it's our day.”

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