During the most recent recession, it wasn’t that uncommon to hear about jobless individuals taking work that they were overqualified for just so that they could get medical insurance. Even in today’s slightly stronger economy, the employee benefits piece of a company’s total compensation package continues to play a significant role when an employee decides to join or leave an organization.
In the wake of health care reform and the rise in benefit costs, employers are passing more of the cost burden onto their employees; thus creating the need for employees to make smarter decisions when it comes to their benefits, particularly medical coverage.
This concept, however, is not a new one. Carriers and brokers alike have been preaching this to all us for years. The popular catchphrase often used today is: “health care consumerism.”
As benefits managers, we need to discuss the concept of being a wise consumer with new employees from the start — which for most companies — is during new hire orientation. We need to encourage employees to take ownership over benefit choices. Employees should treat these decisions the same way that they do car and home purchases: after appropriate research and then making an informed choice that’s best for themselves and their family.
It’s important to convey to employees that they need to educate themselves about all of the benefits being offered by visiting the company’s employee intranet or portal for plan summaries, booklets, comparison spreadsheets.
They also should go directly to the vendor’s website for an even more detailed explanation of the plans, if need be. It can be time-consuming, but it will be well worth it once they have made a sound decision and when they and perhaps their family members have to live with that decision for an entire year or until a qualifying life event occurs.
How many times have we fielded calls from employees who are upset that their long-time doctor is not covered by an insurance company’s network? If we don’t do a good job educating our employees, they’ll blame us for these unfortunate disappointments.
Excellent communication is the key to engaging employees so they’re well-informed and drive them to making smarter decisions. Often times as professionals we assume employees have an understanding of benefits so industry jargons come naturally. If you’re lucky, you may get a brave new employee who will ask, “I know this is a dumb question, but what is an FSA?”
Be approachable when discussing benefit options so people feel comfortable asking a question without the unnecessary preface as in the previous sentence. It is essential to write your communication materials in a clear and concise manner.
Be thorough and give examples when you can. Ask your employees questions before and during your presentation. Being interactive is the key to an effective presentation. We know what we want to tell them, but not what they want and need to know.
Human resources and benefit managers also need to reiterate the health care consumerism concept throughout the year and particularly during annual open enrollment. I recommend that you be creative in your communication materials perhaps by using a creative concept or theme so as to get employees’ attention.
During annual open enrollment, encourage your employees to enroll a week before the actual deadline so they can enter into a contest to win some great prizes such as an iPad, SoniCare dental system, designer sunglasses, and a Starbucks gift basket full of items valuing $100. This would catch the attention of many employees and increase engagement from them! Don’t hesitate to ask your broker or third party administrators if they could donate a prize which would give them some advertisement as well.
Employers must to be cognoscente of the fact that they need to create a more expansive and competitive benefits package as well. You should think outside the box of only offering the typical benefits such as medical, dental, vision plans. There may be some hidden ‘freebies’ for employees built into your current vendor’s plan. For example, one popular insurance company that we work with offers employees free basic will preparation assistance and identity theft assistance.
Interestingly enough, employers are offering more voluntary benefits (i.e., 100% employee-paid coverages) to employees than ever before. This widespread shift also helps companies to have an integrated employee benefit offering that addresses employees’ needs that the core group plans do not. It helps companies to maintain competitiveness of their benefit programs with little to no cost to the employer.
Not all employees, however, will take advantage of these voluntary benefits such as critical illness, long term care or even group accident insurance. The Gen Xers and Gen Yers feel that the cost for such benefits is too expensive and they cannot afford to pay for such benefits.
They also might feel as though they will not need the benefits because they are young and healthy. Particularly for these employees, automatic enrollment of 401k plans, with an opt-out clause, will ensure they don’t leave employer matching money on the table.
Older employees, on the other hand, are more likely to feel that voluntary benefits offer some advantages, especially when it comes to the guarantee issuance and it is easy to enroll. Other employees might be more apt to elect such coverage because of convenient payroll deductions or portable benefits.
In addition, some employees might appreciate the fact that their employer is offering the benefit and believes that he might receive better service because of the company’s sponsorship.
There will always be that group of employees who will complain about the high cost of benefits but what they do not realize is that the premium is based on a group rate. If they went out to the market to receive a quote for the same benefit it would be even more expensive because it would be on an individual policy basis and not at the group rate. Therefore, not only is the convenient payroll deduction an advantage but so is the group rate.
It’s a real challenge for employers to deliver cost-effective, competitive benefits to employees today. The ever-changing world of employee benefits packages that are full of new plans and products requires better, more thorough and more frequent communications by benefits managers to their employees. Assisting employees with the right information and tools to make smart decisions is more important than ever.
So, know your employees and use different means of communications to attract the attention of the different generations.