New tool shows workers how their benefits selections stack up
Employees don’t feel like they have the right benefits — and it’s not just because their employers aren’t offering enough variety. One company is trying to get a better idea of what that means for both workers and employers.
A new tool from benefits management platform provider Benefitfocus compares anonymous data from 1 million of its users to help employees understand how their benefits portfolio compares to that of their peers. The index found that few employees are enrolling in a diverse group of benefits that can help them in their day-to-day life.
Data analyzed from the index indicates that employers may need to step up efforts to better educate employees on their offerings and encourage them to diversify their plans. The tool found that many people didn’t take full advantage of the voluntary benefits available to them. Most people in the sample only enrolled in dental or vision insurance. Several did not enroll in any voluntary benefits at all.
"The index is really meant to help consumers better understand their purchasing decisions around their peer group," says Drake Manning, head of communications at Benefitfocus. "Ultimately the takeaway is that across all of these categories consumers are likely not purchasing the right benefits."
The index is scored from 0 to 300. Lower scores represent individuals that are purchasing products that are different from their peer group or purchasing no products at all. Middle range scores represent a balanced benefits portfolio while higher scores represent employees who are purchasing almost entirely the same products as their peers. Employees at the higher or lower end of the index may also need additional benefits education, the company says.
The typical benefits consumer in the U.S. is a 41-year-old earning $52,500 a year with a score of 94 on the index, just outside of the ideal range of 100 to 228. Their medical benefits account for half of their score alone. This indicates they need further education on what benefits are available to them and how they can reduce their risk, according to Benefitfocus.
Benefits packages must go beyond medical insurance, says Jeff Oldham, senior vice president of Benefitfocus’ BenefitsPlace division. Employers also should focus on wealth and lifestyle benefits to help employees handle healthcare costs that are rising faster than wages. Voluntary benefits such as free grocery delivery, pet insurance, disability insurance and emergency childcare can help close the gap, Oldham says.
“A lot of these benefits are new, going back five or 10 years, so they may not have the street cred,” Oldham says, noting that they will continue to grow in popularity. “Employers have to offer a much greater variety of these benefits to recruit and retain employees."
Neglecting wealth benefits like life and disability insurance and lifestyle benefits such as pet insurance and ID theft protection can leave employees vulnerable to unexpected events. But people don’t tend to think about which benefits might be useful the other 50 weeks of the year during open enrollment, according to Oldham.
The key to helping consumers find the right mix of benefits for them is educating them on what’s available, Oldham says.
“In the e-commerce world, it’s a borderline expectation that when I log into certain e-commerce sites they know who I am, my preferences, what I’ve ordered and make recommendations,” Oldham says. “In our space, we’ve very cognizant of those similar expectations that consumers have so we’re spending an awful lot of time around communication, ensuring that when you log in you’re seeing things based on who you are and where you are.”