Increasing benefit enrollment numbers is often as easy as offering better education about the benefits offered, yet employers continue to struggle with their education strategy. Advisers, experts say, are well-positioned to help employers improve enrollment communications and assist with employee understanding and engagement.
An overwhelming 95% of employees say they are more likely to enroll in benefits they feel familiar with and educated about, yet only one in three employees say the information they receive on benefits is easy to understand, according to new research from Lincoln Financial Group.
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More than half (56%) of employees say they want a “simple benefit enrollment process that makes it easy to understand what products I need.”
Forty-eight percent said they want an adviser to speak to about benefit choices.
Because of their history and experience working with employers, advisers are also well-positioned to help employers improve their enrollment communication and education strategies, says, Eric Reisenwitz SVP of operations & product for group protection business at Lincoln Financial Group.
He says advisers should focus employer efforts on three key strategies:
1) Communications should be year-round, he says, particularly for those lesser-known benefits. Communication about benefits should not be limited to the open enrollment period, Reisenwitz says, adding that many employees focus their attention during enrollment on medical and dental benefits — products they are familiar with and already understand the benefit of having. “A lot of people don’t even get around to learning about other products,” he says. Advisers can hold industry awareness events off-cycle to discuss lesser known benefits such as disability or critical illness.
2) Employers should have educational forums that focus on informing employees about the different benefits being offered and especially what impact they will have for the employee should they need to use them. “Employees don’t always understand the financial benefit of having some of these products, nor how they may fit in to fill gaps, particularly with high-deductible health plans,” he says.
3) When benefits are presented, employers should present them as a total package. Individuals should be able to see the total picture of the benefits they are going to purchase for the year, Reisenwitz says. “If employees see things in one place, they have the tendency to think in terms of a total security package versus compartmentally ‘How much is this going to cost me versus that?’” He says brokers have the tools and can build the awareness capability to successfully funnel that together with the critical information on coverage in a nice package.
Generational marketing
Reisenwitz says communication and education should also be targeted to specific age groups, because different populations have different concerns.
Employees agree. Six in 10 say their benefits meetings would be more relevant if they were targeted by age, according to latest Workplace Benefits Study released by Guardian Life Insurance Company of America.
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Those within the first five years of working feel they need more personal advice during enrollment.
“Benefit education and communications solutions can’t be one size fits all, but must be clear, relevant and personalized to different populations within the workplace in order to be successful,” says Ray Marra, senior vice president, group products at Guardian.
“Our research reveals that employers are demonstrating a renewed focus on improving employee satisfaction,” Marra added. “Guardian has seen an increased interest from employers for its comprehensive support services as more employers look for customized education materials, enrollment technology solutions and personal services such as benefits counselors and an employee benefits hotline to provide to their employees. Offering these customized tools will help employees make the best benefits choices for their current situation.”
Cost containment
Regardless of age, all employees are concerned about the burden of rising health care costs, Reisenwitz says.
Many employees (40%) believe health care costs will negatively affect their ability to retire when they want to, according to Lincoln Financial Group’s research. The feeling is consistent across generations: 35% of millennials, 44% of Gen-Xers, and 41% of baby boomers.
Only 18% of employees feel very confident they could cover their current expenses in the event they suffer a major injury or illness. When employees were asked what they would do if they needed to cover out-of-pocket expenses not included in their medical plan (participants could select more than one):
- 70% would tap into a savings or checking account,
- 40% would use a credit card,
- 29% would withdraw from a 401(k),
- 26% would borrow money from a friend or family member.
“Seventy percent say they would tap into a savings or checking account, while 40% would use a credit card or their 401(k). That is dramatically impacting not their financial lives today, but they are also mortgaging their future. And what about the people that don’t have these options?”
Advisers and employers can address employee fears about health care and finances through their education efforts, he says, reminding employees that some of these products can be purchased inexpensively and provide financial security in the event something catastrophic happens.
