There are three reasons why co-workers Bob Burke and Brad Collins left their jobs in insurance sales to found The Farmington Company in 1980: product administration, ongoing service and partnering with producers. Having worked together under an independent agent for the previous five years, the pair realized these factors were the missing ingredients to business growth. Thirty years later, solid dedication to the three principles keeps Farmington among the top independently operated voluntary benefits enrollment and communications firms in the country.

Perhaps even more impressive, Burke's and Collins' relationship remains solidly intact as well. "We have an interesting record of not having any fights in over 35 years now," says Burke, company president. "We have differences of opinion but never any arguments."

Collins admits it's unusual. "We've been together for all these years and I think we both mutually respected not only initially but on an ongoing basis what we both brought to the relationship," says the executive vice president.

Vice President of Sales Doug Mantz backs up the account, which he first observed as a carrier rep before joining Farmington himself in 1994. "Brad was always the sales guy, Bob ran everything inside and the reason they never argue is whoever feels strongest about a particular issue wins and that's it," he says. "It's an interesting relationship to view from the outside."

It didn't hurt that Burke and Collins easily agreed on the three principles they follow. In particular, since product administration beyond the carrier side did not exist in the early '80s, they knew they'd found an innovative path to follow. This naturally led to ongoing servicing of employee policies through an increasingly sophisticated call center and onsite visits. And their decision to make partnering with producers a focus of their marketing method allowed for a speedier and more efficient sales process.

"We gradually became of more and more service to the employers, HR and payroll departments," says Burke. As the market "grew substantially, our administrative services became more and more important. Today, it's a prime reason why producers find our services of great value to their clients."

Set it and forget it

In the beginning stages of the voluntary benefits market carriers would come and go "on a fairly regular basis," says Mantz, and taking over the administrative burden served as a form of self protection for Farmington. By taking total control of the administrative process, "it didn't have any real effect on the employer or the employee if the carrier were to remove itself from the market or change their product offering," he says. "It allowed us to be a little bit more nimble with product offerings as the environment changed."

Although carriers are more entrenched these days, the policy Farmington established early on allows the company to add an infinite number of voluntary products from multiple carriers to one administrative platform. There is only one deduction field to fill out and Farmington reconciles all bills on behalf of the employer, explains Collins. "That's a great service for the employers," he says.

It's this opportunity for one-stop shopping that Jamie Long, benefits manager at University of LouisvilleHospital, loves about Farmington. "They make it so easy for us to administer the product," she says.

Each time Long requests that Farmington take on a new administrative task she says the company is happy to comply. One example: The hospital went from a paper bill to an electronic file that Long now imports directly into their payroll system.

"That's the primary thing that [employers] are concerned about; the last thing they want to do is add another administrative responsibility for a benefit that the employees are paying for on their own," says Mantz. "So we've done everything we possibly can to remove that barrier."

It's a barrier that has evolved to potentially overwhelming proportions since the early days of voluntary when Farmington only sold individual permanent life policies. Throughout the '80s the market expanded to include whole, flexible, universal and term-life products, followed in the early '90s by long- and short-term disability, with accident and critical illness gaining popularity at the turn of the century. The past decade has seen the growth of long-term care, pet insurance, auto, home, legal services, identity theft, dental, vision, and a slew of discount purchasing programs. Like the products themselves, Glenn Courounis, vice president of human resources at New York City's Lenox Hill Hospital, says his opinion of them has evolved through the years: "There was a period of time where I felt that in order to not confuse employees we limit them to only a couple of offerings. A lot of that was because of confusion and because, frankly, it made our jobs more difficult because we'd have to deal with a bunch of different vendors and carriers."

In the past two years Courounis has made a "180 degree turn" from that school of thought. With the increasing burden on his HR department, he's come to rely even more on Farmington and went from offering two products to five: whole life with a term rider, disability, accident, critical illness and cancer.

It is easier "because we virtually do nothing and employees appreciate the fact that we [offer more benefits] to take advantage of," says Courounis. "And the fact that people spend so much time at work these days - more time than they do with their families - to give them an opportunity to have one-stop shopping through the employer is an advantage. I have to say, that represents a huge change in my thinking."

One tell-tale sign of the ease Courounis finds with Farmington's administration process: He can't recall how many different carriers Lenox Hill uses. "Farmington worries about the carriers," he says. "Obviously, I have to be convinced that they're solid companies, but we just send Farmington the money and they take care of the rest."

Through Farmington's guidance, the University of LouisvilleHospital has increased its voluntary offerings over the years as well, says Long, where they've now added life and critical illness coverage in addition to their short-term disability benefit. "The folks at Farmington have been really good to come in and help us identify where we might need to fill in some spots in our benefits plans," she says.

Although the number of available voluntary products seems to be growing almost daily, "realistically, there are only a handful that are real serious revenue generators that enable the organization together with the consultant or broker to offer the services and make it work," says Collins.

While Farmington's business model is based primarily on product commissions, they do charge on a fee basis in certain circumstances. If an employer is seriously interested in a product such as prepaid legal services, it will probably need to be coupled with a product such as life, disability, cancer, critical illness or long-term care that is going to have higher participation rates, adds Mantz.

After sticking with Farmington through his employment at three different hospitals over the decades, Courounis remains a satisfied customer. "The only hospitals I work in are where they're a client of Farmington. Otherwise, I tell them I'm not working there," he jokes.

"I think HR departments are looking to do more with less, especially in the health care industry. And to find a firm that we can go to that will provide us with additional benefits at no cost to us, that provides us with a platform that allows for as many products as possible in one platform, is tremendously advantageous to us and our employees."

Standout service

Such statements of loyalty are not without design. "Both with the broker/consultant and the employer we're very, very relationship conscious," says Collins. "All of our regional marketing directors and then ultimately our customer service reps who provide onsite service are very attuned to developing and maintaining great interpersonal relationships with the people in the human resources and the benefits area, as well as with the broker."

Such service entails multiple touches throughout the year, whether it be through Farmington directly or the employer's broker, often depending on the broker's preference. "Some brokers prefer that we're not dealing directly with the HR department and they're very involved and we run everything through them," says Mantz. "Most brokers, however, have us work directly with the client on day-to-day activity."

Relationship building starts with Farmington's regional marketing directors, who make the initial client presentations, followed by the enrollment team and implementation manager. Each client is assigned a "Premium Administration Representative" who serves as the contact with the payroll department, says Mantz. Then, an onsite service representative visits the employer anywhere from monthly to annually, based on company size and amount of employee turnover.

In the last 15 years, Farmington's client communication process has expanded rapidly from strictly covering voluntary benefits enrollment to providing communications services for all of a company's benefit offerings. The expansion is primarily funded through voluntary benefit sales.

"What generated interest in our services years ago is probably different than what it is today because so much of what our enrollment capabilities are involved with now is full benefit communication that transcends just the voluntary benefit world. It covers all of the benefits offered by the employer," says Mantz.

Courounis can attest to that. "As far as I'm concerned these guys will respond to almost anything," he says. He cites an example when one of Lenox Hill's 3,400 employees was "very upset" because she felt she didn't have enough information to decide which voluntary benefits to take. A Farmington rep spoke with her repeatedly until all of her questions were resolved, then allowed her to sign up for the benefits even after open enrollment was finished.

"Because they provide great service I'm very, very loyal to them," says Courounis.

Thirty years ago, an employee would inevitably turn to their HR department with a benefits question, forcing personnel to look through stacks of paper records for information that was often months old. "It got fairly complicated," says Burke. "What our services have done is made it simple for the employer not to have to create a database of information. They simply call our 1-800 number and we have everything on screen and can answer all their questions on all products and all carriers."

As vice president of human resources at Roper St. Francis Healthcare in Charleston, S.C., Doug Harrison has worked with Farmington for about nine years. He need only look at the annual opinion survey of their 4,800 employees to remain confident in that decision. Employee satisfaction with compensation and benefits is in the 99th percentile. Farmington's Diane Reardon has been their regional service representative from the beginning.

"A lot of people actually think that she works for us," says Harrison. "She's here three, four times a year."

Harrison made the trip to Connecticut to get a first-hand look at Farmington's customer service center, where he observed claims and service reps answer phone calls, pull up customer accounts on their computers and review employee questions. "I think they stand out," he says, "and I would say that simply because I've never heard one employee complain."

Built to last

The majority of Farmington's revenue comes from existing client relationships established 10, 15, 20 or more years ago. "We've got some that go back as far as the '80s," says Collins.

"One of the keys is the path of resistance is minimized because of the extent of our services," he says. "Meaning we're able to go back and consistently generate an ongoing flow of premium and revenue because we don't have a 'squeaky wheel syndrome.' Because our administrative capabilities and our services are so meaningful the employer's attitude has been, 'Why not?'"

Courounis isn't surprised by the longevity of Farmington's client relationships. "These guys provide excellent service. They've always been responsive to any concerns we have and frankly, because the program virtually runs itself, we have very few issues. But when we do they're incredibly responsive to our needs," he says.

Of the more than 1,000 group clients on Farmington's books, the average company size is about 1,500 employees. In the last three or four years they've brought on larger groups, averaging closer to 4,000 lives.

Even so, the growing population size hasn't stopped them from being on a first-name basis with clients, says Mantz - that is, if that's how the broker wants to operate.

"All of our brokers have different plans for us. Some are very involved through the entire process, others who we've worked with for a number of years have the utmost faith and confidence," he says. "And many of them are very involved in everything they do. So we custom tailor our relationship management with the client to the way the broker operates."

Some broker relationships have lasted just as long as their most loyal clients. "We have some brokers that we've been working with since the '80s," says Mantz.

The connections stem from a real sense of having fun in the workplace, and that attitude comes from the inside out, says Collins.

"Both internally and externally it's a people business and we've got just a phenomenal staff and great people here at the company," he says. "We're fortunate enough to have worked with so many great people with our clients and with the insurance community that it's just been a lot of fun."

Both Burke and Collins recite a list of several of Farmington's 100-plus employees who have been with the company almost from its inception.

Taking a cue from Farmington's own employee loyalty and growth over the years, Gary Bensing, vice president of human resources at University of Louisville Hospital, knows a good partnership when he sees one. "I know their employee base has grown considerably over the 30 years, which means they're doing something right out there and they're getting the right people," he says. "I would have absolutely no hesitancy to recommend them to anyone - and I won't do that for a lot of [companies]. This one, I have absolutely no problem." EBA