Case Study - Unemployment Cost Management
Exelon Corporation is one of the nation’s largest electric
utilities with more than $15 billion in annual revenues, and
Exelon Corporation is one of the nation’s largest electric utilities with more than $15 billion in annual
revenues. It distributes electricity to approximately 5.2 million customers in Illinois and Pennsylvania,
and gas to 470,000 customers in the Philadelphia area. Awarded the top spot on Fortune Magazine’s
2006 list of the most admired companies among energy providers, Exelon’s operations include energy generation, power marketing, and energy delivery.
Exelon was challenged with a significant cost cutting initiative
Exelon was challenged with a significant cost cutting initiative in an attempt to execute work
more precisely and with fewer people, so it considered outsourcing unemployment cost control to
help achieve this goal. The company also sought better reporting tools to track performance and
improvement in several aspects of its unemployment cost control process. In addition, Exelon was
experiencing problems tracking the status on claims as well as monitoring whether or not
taxed entities in various states were being charged the correct rates.
SolutionIt was decided that the best way to reduce unemployment taxes through claims processing, hearing
representation, and tax management was to outsource to Equifax. After determining that the Equifax
Equifax outsourcing fee was lower than the internal cost,
outsourcing fee was lower than the internal cost of handling the process, Exelon implemented a
timeline for transferring their unemployment needs over to Equifax.
The claims process became more efficient than what Exelon was able to achieve on its own, as
claims were scanned electronically and routed correctly in accordance with pending deadlines. All
current unemployment claims were transferred to Equifax, and the Exelon HR department conducted
a web meeting to educate employees on the changes that were being made. The Equifax account representative was in attendance to help answer any questions relating to the service. Equifax also
prepared letters for each state ID that told tax departments and state unemployment departments that the address of record was now Equifax.
In the first year of outsourcing, Exelon removed $408,500 in charges to its unemployment accounts due to favorable protests, and removed an additional $294,000 from charge audits.
ResultsIn September of 2004, just a few months after the decision was made to outsource, Exelon transferred all open unemployment claims to Equifax in which appeals or hearings were pending, and filed away all completed cases. In the first year of outsourcing, Exelon removed $408,500 in charges to its unemployment accounts due to favorable protests, and removed an additional $294,000 from charge audits. Furthermore, Exelon now shows above average ratios for favorable decisions at the initial appeal level (nearly 75% won) and at the hearing level (nearly 50% won) compared to industry peers.
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Equifax and EFX are registered trademarks of Equifax, Inc. Inform>Enrich>Empower is a trademark of Equifax, Inc. 2012 Equifax Workforce Solutions,
a/k/a TALX Corporation, a wholly owned subsidiary of Equifax Inc., Atlanta, Georgia. All rights reserved.
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