Blue Cross Blue Shield of Kansas

Blue Cross Blue Shield of Kansas has a 50 Percent Projected Cost Reduction in Tax


The most trusted health insurer in Kansas

As the state’s largest health insurer, Blue Cross Blue Shield of Kansas (BCBSKS) is a billion dollar company that serves more than 1.6 million people in the Kansas area.  The company has surpassed $3 billion in annual claims payments to health care providers and members for many years. Additionally, BCBSKS contributes more than $100 million a year to the economy through payroll and taxes.

Key Benefits

  • Over one-third reduction of B-notices
  • 50 percent projected cost reduction in tax
  • Guaranteed Compliance reduces enterprises risk for more than 360,000 forms processed

Business Challenge

An old system and limited resources risked penalties year-after-year

Year after year, BCBSKS was at risk for incurring costly IRS penalties for non-compliance with the IRS requirements to report correct Taxpayer Identification Numbers (TINs). In addition, BCBSKS had been burdened with returned mail due to incorrect addresses.

BCBSKS needed a centralized, automated information processing solution. Their current process was time consuming. The company was utilizing an internal mainframe system that fed directly into a third-party software-based solution. With limited internal resources, they needed a solution that streamlined their processes and automated their workflows. Their current third-party vendor informed BCBSKS that they were running a system that was soon to become obsolete which would require them to switch to a new solution.

BCBSKS thought they had three viable courses of action moving forward:

  1. Remain with their current vendor and be forced into upgrading to the new system
  2. Update their mainframe system
  3. Evaluate other vendors

Because BCBSKS was not entirely satisfied with their current solution, they decided to explore new options. BCBSKS decided that outsourcing the entire process would allow them to redirect their internal focus to core business initiatives.

Sovos Compliance’s Solution

The Right Solution for a Forward-Thinking Organization

BCBSKS outsourced their entire information reporting process to Sovos Compliance utilizing Taxport, Sovos Compliance’s Software as a Service solution. BCBSKS was able to free up their internal resources for core business functions, gain access to Sovos Compliance’s industry knowledge and support, and control operating costs. BCBSKS projected a cost savings of nearly 50% by outsourcing this non-core process to Sovos Compliance.

BCBSKS has access to their data at any time, from any location, with a secure login over the web. Sovos Compliance provides BCBSKS complete system administration, data management, TIN compliance, federal transmittal service, statement printing and report production. BCBSKS maintains control of the processes through monthly audit reports. Data is imported from a single feeder system, Frontier, and fed directly into Taxport. Upon upload, Taxport cleans the data so only correct data is filed using Sovos Compliances TIN Compliance Services. This process will significantly reduce the number of incorrectly filed TINs and subsequent IRS B-Notices and Penalty Notices. BCBSKS’s W-9 data will be then be “Cleansed” and potential IRS penalties will be virtually eliminated. 1099-MISC Forms are then printed and mailed to the recipients before regulatory deadlines and data is electronically transmitted to the IRS.

BCBSKS planned to integrate Web Services into their solution, which offers recipients the ability to view & print their real time statements online. This service will reduce their customer service time and the costs involved with handling statement inquiries and reprints. At the same time, their 1099 recipients will conveniently have access to their account information 24/7. In addition, eliminating some of their printing and mailing costs through the IRS approved Opt-In/Opt-Out service will provide BCBSKS projected additional 25% cost savings in the first year alone. This service allows 1099 recipients who consent to receive e-Statements in lieu of having them mailed.

By utilizing NCOA processing, BCBSKS will see a reduction of misdirected or returned mail and ultimately eliminate the postage costs of resending forms to bad addresses. NCOA processing allows every print job to run through a database of postal addressing information. Through this process, zip codes, address abbreviations and forwarding requests can be updated on records prior to mailing.

The quality and delivery of Sovos Compliance’s services will allow BCBSKS to focus on core capabilities and processes. This in turn will free up capital and resources to allow BCBSKS future growth and performance elevation.