CASE Study

eTRAC MasterCard technology replaces vouchers at New York’s Educational Broadcasting Corporation

Company Profile

The Educational Broadcasting Corporation employs more than 500 people who operate two public television stations—Thirteen/WNET and WLIW21—and provide award-winning public programming to millions of viewers in New York, New Jersey, Connecticut and Long Island. The enterprise, which includes 25 employees in Washington, DC, also provides educational and community outreach projects. Its innovation extends to Web sites, enhanced television, CD-ROMs, DVD-ROMs, educational software and other cutting-edge media products.

Challenge

EBC, unable to compete equitably in the pricey New York market, must provide attractive, cost-effective employee benefits. Yet its voucher-based pre-tax mass transit benefit was not as convenient, cost effective and carefree as EBC had hoped. The system taxed human resources and accounting managers with pesky, time-consuming record keeping and often stuck employees with expired vouchers and transit passes, wasting their money and discouraging full participation. EBC needed a better plan.

Solution

EBC chose the eTRAC Commute plan administered by Benefit Resource, Inc. and incorporating the eTRAC MasterCard.

Results

eTRAC Commute gives employees flexibility, convenience, security and savings. Administrative support required of EBC staff decreased from a couple days each month under their voucher system to less than an hour. Plan costs per employee dropped 10 to 15 percent. Participation rates increased 15 percent, reducing EBC?s payroll taxes and providing more savings to the enterprise. Easy online account management for employees reduced errors for everyone. EBC employees can now take full advantage of pre-tax transit benefits.

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A competitive market

While employees of the Educational Broadcasting Corporation work to bring top quality programming like Nature, Great Performances, Charlie Rose and New York Voices to public television viewers in the greater New York area, Human Resources Director Marc Morales works just as hard to provide EBC's employees with a competitive benefits package.

"It's very difficult for us, as a nonprofit, to compete with the networks and cable stations here," Morales says. "We're not always able to compete with salaries so we tend to be very competitive on the benefits end."

In 1998, EBC began helping its employees take advantage of tax regulations that allow them to pay for qualified mass transit fares with pre-tax dollars. EBC distributed transit check vouchers in denominations of $30 and $35 to participating employees but employees often found it difficult to configure the right mix of vouchers to match their commuting patterns. Errors were common. 'he voucher plan worked well to a certain extent" Morales says. "We had the normal number of people losing vouchers. And people had problems because they were not using as many vouchers as they had enrolled to buy. But there was a segment, especially those who didn't have regular commuting needs, for whom it didn't work well. What we wanted to do, frankly, was find a more convenient way to offer the benefit."

EBC evaluated transit plans from a number of third-party administrators. "It was pretty clear to us that from the standpoint of electronic administration, Benefit Resource was far ahead of everyone. For example, they provide a web site where employees can see their accounts—exactly what goes in and goes out. There's a lot of convenience to it."

An employee pilot program went so well that EBC cut it short by three months and offered eTRAC Commute to all employees January 1, 2003. "That first month, everything went exactly as we had planned," Morales says. "The whole thing was a wow."

Minimal' administration

"Our administration of the program is pretty much minimal," he adds.  " eTRAC is very convenient in terms of administration. The whole process is easier with eTRAC than it was with our voucher system."

He explains: "Vouchers are like cash. We had to have a safe. We had to count them and maintain an accounting of what was coming in and going out. No one did that for us. So it was a lot more labor intensive on our end. We also had to purchase the vouchers ahead of time and estimate what we'd need. Our staff person could estimate fairly well but it was an annoying part of his job and when we saw there was a better way, we jumped at it."

"With the voucher plan, administration used to take a couple days each month, now it's maybe an hour or less."

Under their former system, the assistant controller created and reconciled transit benefit reports, which was inconvenient for him. "Now he has no involvement, other than being a participant like everybody else. He's very happy. I think when there's a portion of your job that's sort of manual and doesn't take a lot of thought, deep down inside you feel there must be a better way. Vouchers were just not a very efficient way to deliver the transit benefit. The eTRAC plan is."

Convenience, control, privacy

Although employees can enroll online at the Benefit Resource web site, Morales says he prefers to enroll employees using the simple form provided by Benefit Resource. "It's very, very easy"

Employees designate payroll deductions that are credited to their pre-tax accounts. Each time they use their eTRAC MasterCard their accounts are debited. Special patent-pending software from Benefit Resource ensures employees can use eTRAC cards only for qualified purchases.

Employees manage their accounts online, using the secure account management feature of the Benefit Resource web site to view account activity and edit preferences. "We get a lot of positive comments on that feature. It's convenient and secure and it gives our employees both control and privacy. We don't have access to their account information unless they give it to us."

Employees like the flexibility of the eTRAC MasterCard. They don't have to find a counter person to buy transit passes; they can use handy ticket vending machines. And struggling to get the right mix of voucher denominations to match commuting needs is just a memory. Participants buy what they want—daily, weekly or monthly passes. Employees who use mail-and-ride programs find their purchases more convenient than ever. Morales points to himself as an example. Now that he's submitted his eTRAC number to New Jersey Transit, his monthly pass is sent automatically.

Because Morales' commuting fares exceed the monthly benefit limitset by the government, he adds after-tax contributions to his account so he can use the convenient eTRAC MasterCard for all his transit needs and easily monitor his costs online.

Funds guaranteed

Employees at EBC feel confident about using the widely accepted eTRAC MasterCard. "Employees have found that there's a lot more security purchasing their commuting tickets with an eTRAC card than there was with vouchers. We used to have at least a couple people lose vouchers each month. That was like losing cash. Now, it's just not a problem." If an eTRAC MasterCard is lost, the funds in the account are safe; the card is easily replaced.

Participation up; payroll taxes down

"With the voucher system, employee participation was just under 60 percent. Now it's just over 75 percent. There were people who were not taking advantage of the pre-tax transit benefit with the voucher system because their commuting patterns were irregular. We have, for example, marketing folks who spend a lot of time traveling in other parts of the country negotiating underwriting grants. Certainly very few of them were participating because they didn't want to get stuck with vouchers." Now, those employees not only participate, they can use their eTRAC MasterCard in other cities. "Our overall goal has always been to get as many people participating as need the service and with eTRAC I think we've achieved that so that's a really good thing for us."

Increased employee participation has translated into lower payroll taxes for EBC—not a primary objective for the enterprise, Morales says, but still a nice perk. "Any time we can reduce taxes, it's good."

The right partner

Morales, who has more than 30 years of experience in human resources management, points out that HR directors want a service provider they can rely on."You want to be able to rely on a third-party administrator to lessen your work as much as possible. Out of all the third-party administrators that we spoke to, Benefit Resource actually does more for the accounts than any one else—in terms of providing tools, like their web-based tools, in terms of providing education up front, in terms of the ease of completing their forms, the quality of the information on their web site—all these factors contributed to our decision to choose Benefit Resource. The other third-party administrators didn't seem prepared to do those kinds of things."

Morales adds that he's very pleased with the support he's received from Benefit Resource. "There are always administration issues with any benefit plan. The most important thing is how quickly they can be resolved. We've found that Benefit Resource is extremely responsive. We know the service people. We can call them at any time to resolve any problem. I've spoken to the operations manager at Benefit Resource to deal with all kinds of different issues and everything always gets resolved very promptly and correctly. In terms of service, they are really top notch."

Morales sums up: "Our experience with Benefit Resource has been very satisfying. We have been able to provide a great deal of convenience to our employees in a way that has enabled us to cut down our administration, saving time and effort, and expand the pre-tax transportation benefit to more people."

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