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December 10, 2007

Bennie guide | A chat with Jeffrie Wetherhold, founder of Employee Benefit Auditing Services in Bath.

Founded: May 2007
Startup costs: $5,000
Employees: Wetherhold
Projected revenue, year one: $40,000
Projected revenue, year two: $70,000
Contact: 443-5111
PO Box 606, Bath 04530

What do you do?
Well, I basically provide compliance auditing services for employee benefit programs. So I work with employers, because that's who provides the plan to their employees. Any employer that provides benefit plans to their employees ˆ— medical, dental, life, disability, etcetera ˆ— those plans I'll audit to make sure that they're complying with federal and state legislative requirements.

What kinds of things do you look for?
Well, I look for things under the federal guideline for ERISA, which is the Employer Retirement Income Security Act of 1974, HIPAA, which is the Health Insurance Portability and Accountability Act, COBRA, which is the Consolidated Omnibus Budget Reconciliation Act [which allows some employees to keep their insurance after leaving a job]. I also look at FMLA, which is the Family Medical Leave Act, and I also look at state mandates for benefit plans.

What is the audit process like?
I'll start out meeting with the employer and I bring a sample [audit]. I have a checklist of all the items that I'll need them to provide for each of their benefit programs ˆ— their plan descriptions, their insurance certificates, or their contract with the insurance companies, the HR policy procedures, and the employee handbook.

I review their documentation and ensure they comply with the requirements. For example, in their insurance documents, it may say they administer the plan in a certain way, but in the HR policy it could say something entirely different. That's a huge liability issue for employers.

Could you share an example?
[A big liability] is actually a lawsuit from an employee. That can happen in the case of COBRA, for example, if an employer doesn't notify an employee of their initial COBRA rights, an employee can say, "Well, you never told me that I was eligible for an extension of my health benefit and general benefits under the plan," and then they can sue the employer.

Has the need for your services become more acute over the years?
Most employers, I would say, don't know what the requirements are. They think, "Oh, the insurance company will handle that for us." But ultimately it's their responsibility. And most HR people don't have the time to deal with the details of complying with the federal and state legislative requirements.

That's why my service is a niche in the marketplace. There's no other company in the state of Maine doing what I do. That's why I developed [the business]. I started out 13 years ago in the consulting industry, doing compliance audits for customers. I was in Massachusetts at the time, and when my husband and I relocated to Maine three years ago, I started working at a large health insurance company. I got to know the brokerage community very well, and I found that there was a really huge need for this type of service.

What's your competition like?
My major competition is probably attorneys. The attorneys that I've worked with in the past on the compliance side don't provide nearly as comprehensive a report as I provide. Their fees are enormously higher, from $2,500 up to $10,000. I've priced myself very competitively. I charge a flat fee based on the employer's size.

Does working from home keep your prices low?
That definitely helps. My startup costs were about $5,000. I had to get a color printer, a scanner. I'm mobile, so I have clients right now all over the state. I have clients in Bangor, Old Town, Norway, Portland, you name it.

Did anything happen these last several months that you didn't expect?
Sometimes you get asked to do things that are outside the scope of what your standard services are. A specific example is one of my customers asked me to do a compliance seminar. So being that my focus was compliance audits, I was like, "Oh, okay, well, let's think outside the box ˆ…Absolutely!" So I was hired to do a seminar for one of Maine's largest insurance brokers. We did a seminar in Bangor and one in Portland. I think the employers really appreciated the information, and an outcome of that seminar was it produced a lot of audits for me.

Interview by Kerry Elson



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