HR.com: Can you tell us a little about your new product, COBRApoint?
JJ: COBRApoint is the first of its kind, web-based, COBRA, HIPAA, State Continuation, and Retiree Billing Compliance platform. It is an integrated solution, meaning that all of those tools are in the COBRApoint solution. We have developed two versions of COBRApoint. One is the SEV, Single Employer Version, and the other is the MEV, Multiple Employer Version. The MEV is to be used by professional administrators, such as payroll companies, flex administrators, associations, medical TPAs and the like, as well as insurance agencies.
HR.com: Why did you develop two versions? Is that because different rules apply or because they need stronger technology?
JJ: In surveying the marketplace we felt like there hadn’t been a technological leap forward in this specialized business process, so we set about the task of delivering to the market what we feel is a cutting-edge application that harnesses the power of the Internet for the delivery of COBRApoint. We are viewing COBRApoint along the concept of software as a service. We are hosting the client’s data, providing the application processing, and helping the user with their work output, which would be, for example, the letters needed to send based upon HR regulations.
HR.com: Do you send them reminders or do you have a template?
JJ: COBRApoint does all of the processing. Let’s say you are a Medical TPA paying self-insured, medical claims for a company of 5,000 employees. Some of those employees will terminate employment and experience a COBRA qualifying event. The medical TPA would be able to deliver data to COBRApoint, either by keying it in or uploading a file. COBRApoint will process all COBRA-compliance letters, track all of the time frames, and deliver back to the TPA finished letters that they can send internally or outsource to a mail house. COBRApoint is an integrated solution delivering power to the client.
HR.com: You mentioned that you are the first to be truly web-powered. Can you explain this?
JJ: We make that claim because we have not been able to find any other company that is focused on COBRA, HIPAA, State Continuation, and Retiree Billing, and is a total ASP solution.
HR.com: After you released COBRApoint at the national convention, the Benefits Management Forum and Expo, how was it received?
JJ: It went very well. We had a number of interesting conversations with the attendees. Most of them wanted to talk about our SEV version (Single Employer). They wanted to discuss how to self-manage COBRA more efficiently. We also had quite a few conversations with fellow exhibitors that provide different types of human resource outsourcing solutions for their customers. They were looking for or needing a better COBRA compliance solution. We have entered into discussions with several of those companies.
HR.com: How many employees do you have working on COBRApoint?
JJ: There are four assigned to the team. COBRApoint is actually an outgrowth of another company; COBRA Outsourcing Company. COBRApoint was created to resolve the ‘process scalability’ problem that COBRA Outsourcing Company was encountering. COBRApoint has been in operation since April 2002. The Development Team took COBRA Outsourcing Company’s proprietary platform and converted it into a solution that could be made available to single and multiple users in an ASP format. The commercial version is what was introduced at the BMF&E.
HR.com: How long has COBRA Outsourcing Company been around and how many employees do you have there?
JJ: Since 1996. Currently, that company has a staff of 21 members. COBRA Outsourcing Company is a national administrator for companies for COBRA, HIPAA, State Continuation and Retiree Billing.
HR.com: I read about COBRApoint University on your website. What is that?
JJ: COBRApoint University is a concept whereby COBRApoint will take 18 years of best practices experiences and offer it to clients in a University-type setting. When a user engages COBRApoint, they have the ability to attend the University to learn not only how to manage COBRApoint, but also how to operate an efficient and profitable administration company. Attendees also learn how to set up banking and legal relationships, how to contract with customers, and hire and train staff members. Someone can attend just for COBRApoint for about $1,500. It is a three-day intensive training program with one-on-one attention. There is a minimum attendance of six and a maximum of 15 per class.
HR.com: Can you tell us about your competition?
JJ: COBRA Outsourcing had been using Travis for our business. We wrote ourselves away from Travis because we wanted to be able to fulfill the craziest customer requests.
HR.com: Such as? What can COBRApoint do that your competition cannot?
JJ: Let me give you an example. Recently a client using COBRApoint was able to help an ice-cream maker during a seasonal lay-off. The ice-cream manufacturer needed help processing LTD premium payments as well as 401(k) loan repayments. The challenge was to prorate the monthly billing statements by the number of Fridays in any given month. Our client was able to accommodate the ice-cream maker’s needs and offer an efficient and affordable solution. When running their old platform, our client would have had to turn away that business, but not with COBRApoint.
If you compare COBRApoint to our competitors, you will notice immediately that it is an entirely different solution.
HR.com: Where do you see yourselves in one year?
JJ: We have a goal on the table that we want 125 multiple employer users by the end of 2005. From the discussions that we are having, we think that it is an attainable number. We do have the ability to offer 30-day free trials, and that’s where most people are right now. They are trying out the software.
HR.com: Will you have to hire more employees if you reach your goal of 125?
JJ: We have the management in place to build the company organically. We will have additional IT support and help desk support. We are going to be growing to a staff of about 15 or 20 if we meet that 125-client threshold.
HR.com: How will your clients receive updates?
JJ: That was exactly one of the challenges our clients had with other software. Clients had to wait on the vendor’s update and release schedule to receive the most current version. This is especially crucial, when a state like California passes a law that changes the legality of sending social security numbers. In this situation, the administrator had to wait for the software vendor to release an updated version. From when the law was passed until when the client could implement the upgrade, they were out of compliance in that state. The increased liability exposure was almost immeasurable to our client.
But since COBRApoint is a centrally managed application on our servers and it is accessed via the Internet, our IT people can make a code change and the next time the customer logs in, they are running the most current version. We have to manage only one copy as opposed to individual copies for each user. With COBRApoint, the customer will always be working with the most up-to-date version.