OnlineBenefits Acquires Two Businesses and Launches Benergy Outsourcing Strategies; New...

Business Editors

UNIONDALE, N.Y.--(BUSINESS WIRE)--Oct. 7, 2003

OnlineBenefits, Inc., provider of Internet-based HR solutions, announced that it has acquired two benefits outsourcing businesses and established a new subsidiary called Benergy Outsourcing Strategies (OS).

Benergy OS provides three types of services geared toward small and mid-market employers: total benefits outsourcing; flexible spending account (FSA) administration and COBRA administration. The services will be delivered through exclusive joint ventures with OnlineBenefits' network of 300 insurance brokers.

To lay the foundation for the new subsidiary, OnlineBenefits acquired two companies: Admin Strategies and Benefit Outsourcing Services. Admin Strategies specialized in total benefits outsourcing and was lead by Mark Stevens, who now manages Benergy OS. Benefit Outsourcing Services was formed from a joint venture between Thesco Benefits, LLC and Frenkel & Co., Inc., two of the Northeast's leading employee benefits brokers. Its focus was on administering FSA and COBRA plans and providing total benefits outsourcing.

The fusion of the processes, people and technologies from the acquisitions with OnlineBenefits' technology suite of Benergy(TM) products has spawned a unique set of outsourcing solutions not yet available to insurance brokers serving mid-sized employers. As an example, the FSA administration services, called "Total Access FSA," will give each employee total access to robust education and detailed account activity through a personal Web portal, while simultaneously providing more traditional customer support (e.g., paper documentation and a call center). Employers and brokers will enjoy unprecedented access to FSA reporting information through their own portals, too.

The efficiencies of Benergy OS services and its distribution channel will help make outsourcing more accessible to the price-sensitive employers who have been considering outsourcing. However, the outsourcing services will also be attractive to larger employers.

"To thrive, virtually every company will have to explore outsourcing their non-core business processes," said Alan Cohen, CEO of OnlineBenefits. "The smaller the firm, the less it can afford to expend resources administering benefits. We see a gaping hole in the marketplace for cost-effective benefits outsourcing solutions and we intend to fill it."

"From my experiences, I know that OnlineBenefits has the know-how to run our outsourcing business effectively, which is why we were confident in placing our administration clients in their hands," said Richard Fleder, President of Thesco Benefits. Craig Hasday, President of Frenkel & Co. added, "I am pleased that we found an entity that can carry through the collective vision we had for Benefit Outsourcing Services."

"Having helped companies outsource benefits for years, I could not be more excited about what we are able to do for clients now that we have extraordinary communication, enrollment and recordkeeping technologies in the mix," said Mark Stevens, Director of Benergy OS. "What's more, because of our aggressive co-branding approach, our broker partners can now boast outsourcing among their value-added services."

Benergy OS has 100 clients across all service lines and is already a profitable entity.

About Benergy Outsourcing Strategies

Benergy Outsourcing Strategies (OS), a subsidiary of OnlineBenefits, Inc., is an HR administration outsourcing company that provides total benefits outsourcing, flexible spending account administration and COBRA administration. In serving clients, the company combines efficient, accurate processes for tracking employees and administering transactions, state-of-the-art web technologies for benefits communication and administration, and superb customer service practices. Currently, Benergy OS serves 100 employers.

About OnlineBenefits

OnlineBenefits, Inc. is the HR solutions company behind the well-known Benergy family of communication, administration and intelligence products. Its market-proven solutions enrich the benefits and HR experience for employers, employees and brokers in innovative, cost-effective ways. The company designs, implements and hosts its Internet-based applications and distributes them in partnership through its network of over 300 of the nation's leading brokers and consultants. Currently, more than 3,000 employers of all sizes and 700,000 employees use Benergy solutions. Visit www.onlinebenefits.com.