Employees Make Avoidable Benefits Mistakes

More than three-quarters (76 percent) of American workers who make decisions about benefits coverage during open enrollment admit to making mistakes about their benefits decisions, new research shows. In addition, 42 percent of workers say they have wasted money each year because of mistakes they made with their insurance benefits.

These findings are part of a survey of 2,220 U.S. adults ages 18 and older conducted in August 2011.

“Far too many American workers are making avoidable mistakes in benefits coverage decisions—from not meeting deductible amounts to contributing too little to flexible spending accounts—and, as a result of their lack of understanding or confusion, they often pay a price in multiple ways,” said Audrey, the vice president.

Coverage Confusion

American workers say that when thinking about their choices for health insurance coverage, for instance, they sometimes, rarely or never understand everything that is covered by their policy options (74 percent of respondents).

Of those who choose the same benefits year after year, most say they sometimes, rarely or never have a full understanding of the changes in the policies each year (59 percent).

“While workers certainly need to invest more time in making better educated decisions, employers can help by understanding workers’ most common mistakes, explaining their impact and offering best-practice solutions,” said Audrey.

Strategies to Improve Communications

Companies can reap significant rewards by developing more-effective benefits communications, including healthier, more-protected and more-engaged employees. According to some insurance companies, best practices to consider include:

• Survey your employees. Electronic communications have made it easier than ever to survey workers at minimal cost. Yet little more than half (52 percent) of organizations conduct surveys that increase their understanding of employees’ satisfaction with benefit offerings. Even fewer—43 percent—survey their employees’ understanding of benefits communications. Taking the time to understand the preferences and needs of their workforces can help employers increase employees’ satisfaction with their benefits packages.

• Communicate year-round. Many employers communicate their benefits programs to workers just once or twice a year, often overwhelming them with information at open enrollment or during the hiring process. Expecting employees to comprehend and retain large amounts of benefits information all at once is unrealistic and unfair. Instead, employers should present elements of their employee benefits programs to employees throughout the year. By doing so, they’ll help employees retain the information, making open enrollment a smoother, easier process.

• Consider retaining a benefits consultant or broker. Giving employees the opportunity to speak directly to a benefits advisor or a representative from an insurance carrier can be an effective means of education. In fact, 49 percent of workers agree that they’d be more informed about benefits if they sat with a consultant or broker during enrollment.

By SHRM Online staff

Open Enrollment: Communicating in an Uncertain Economy

Given the dual impacts of U.S. health care reform and an uncertain economy—combined with renewed corporate focus on wellness and health care consumerism—relying on “the same old stuff” for open enrollment communication is no longer sufficient, advised Jennifer Benz, founder and chief strategist of Benz Communications, an HR and benefits communications firm.

“Clearly, the era of ‘we’ll take care of everything for you’ is over and ‘we’ll help you find your way’ is here to stay. Employers have a responsibility to educate employees about making good short-term decisions and helping them see the longer-term picture of how health and financial security stack up,” Benz said. She offered five tips for the 2011 open enrollment campaign:

#1. Be Purposeful

Neither the company nor its employees can solve the systemic problems related to health care costs. Yet there are concrete, simple actions that do help control costs—in the short term and long term. Keeping the focus positive and on what’s within reach encourages and motivates employees and their families, and it makes health care reform an opportunity to change behaviors and control costs better.

Focus on the tangible behaviors that impact employees’ pocket books, such as getting preventive care, participating in biometric screenings and other wellness programs, enrolling in more cost-effective plans, switching to generics, using the prescription mail order program, and taking advantage of tax-advantaged health savings accounts (HSAs) and flexible spending accounts (FSAs). Also, use enrollment as an opportunity to promote those programs the company continues to invest in that are largely unnoticed and underused by employees.

#2. Be Personal

Whether explaining a new program or re-engaging employees with existing benefits, focus on their needs and provide meaningful examples.

Many companies put their efforts behind getting people to choose to elect account-based consumer-driven health plans among existing offerings or providing only consumer-driven plans and no other choices (the “total replacement” strategy). In either scenario, make sure to give personal, real-life examples of how these plans operate. For instance, employees with family coverage need to be certain about how the family deductible works. Those with a chronic condition might appreciate free preventive medicines for the first time. Highly compensated individuals will be interested in the investing options in the HSA and how to shelter the maximum amount from taxes. All of them are going to have a lot of questions long after enrollment is over.

#3. Keep It Simple

Keep open enrollment communications simple and direct. Employees don’t use or understand benefits jargon. Use every-day, real-life language. Define terms. Repeat concepts. Try different formats to say the same things. Don’t overwhelm with too much print. Use visuals. And keep in mind that bullet points, graphics, charts and Q&As are helpful. This is especially important as benefit plans become more complex. A results-based wellness program or value-based plan design needs to be communicated in a way that makes sense to employees without raising their suspicion or fears.

#4. Communicate Frequently

People are staying connected continuously with mobile applications and social networks. The gap between how the rest of the world communicates and how companies communicate about their benefits is growing wider. To remedy this, use social media to communicate year-round. Tools like benefits blogs and Twitter benefit feeds are easily implemented with little risk. Not sure what to say? There are countless resources, tips and reminders you can find online to help get started.

#5. Acknowledge Uncertainty

While it’s tempting to lay out a long-term timeline of potential changes, there are too many things influencing the health care and retirement systems to make short- or long-term predictions or promises, even though employees might ask for them. An honest acknowledgement of this tension and a commitment to regular communication can help employees to feel that their concerns are being heard.

By SHRM Online staff