As strategic partners to employers, advisers have a year-round opportunity to counsel employees on benefits packages and perks that will keep them engaged.
The problem: Those of us entrenched in the process might have developed a bit of a benefits blind spot about the impact choosing benefits each year has on employees.
For instance, a 2016 study by The Harris Poll, “What Your Employees Think About Your Benefits Communication,” shows that half of employees find benefits decisions stressful and 20% end up regretting their choices. Forty-one percent report that open enrollment is “extremely confusing” and only one-third of employees read all benefits materials. What does this do? Feeds apathy, increases anxiety and boosts a likelihood that employees will enroll in the same plan as last year — a plan that might not be suited to their needs anymore.
Another study by Aflac found that 77% of people spend less than an hour reviewing benefits decisions, and nearly half of people spend less than 30 minutes. This indicates that 90% of employees may enroll in the same plans year-after-year. That’s a rather daunting statistic when you consider that HR professionals spend a large percentage of their time throughout the year preparing and sourcing options for employees.
The key to satisfaction with benefits may be education. Often, people just equate “benefits” solely with “healthcare,” when in reality, there are an array of options to offer. Employees might not know about all of the benefits available to them, or they don’t have the time to research the lesser-communicated benefits.
These “alternative benefits” outside of healthcare can play a role in exciting employees about their options. Here are some ways to inform clients about some lesser-known benefits that can snap them out of their open enrollment daze:
Short- and long-term disability. At 23, most of us feel invincible. At 50, (hopefully many of us still feel that way!) the reality of a long-term disability may be more likely. But these situations are unpredictable and no one is immune to potentially debilitating circumstances. For both short-term and long-term disability plans, it’s important to have a multi-generational approach that may appeal to more mature, as well as younger employees.
For mature employees, it’s an easier sell. Many have families and know the importance of protecting themselves should they be unable to work. Younger employees may need a reminder that disabilities are more likely then they might think. In fact, the U.S. Social Security Administration estimates that one in four 20-year-olds entering the workforce will have a disability during their careers. The word “disability” calls to mind catastrophic circumstances, but more than often than not a disability may mean being temporarily sidelined by medical conditions like recovering from surgery, having problems with your back, or coping with emotional health issues. For employees sitting on the fence about disability coverage, this information may serve as a friendly reminder that it might be better to be safe than sorry.
Life insurance (accidental death and dismemberment). No one is dying to think about their own mortality (forgive the pun) as open enrollment rolls around, but it’s an important topic to consider. Americans remain dramatically underinsured when it comes to life insurance. According to research and consulting firm LIMRA, more than 30% of Americans don’t have life insurance, and 48% of households have an insurance gap of $200,000 or more. The research showed that from 2010 to 2016, life insurance enrollment rose among Millennials by 10%, largely due to the fact that the generation was getting older, buying homes, and having children. Forecasting these circumstances can be a selling point for younger employees who might soon be planning families. HR leaders also may want to remind mature employees that they should review and update their life insurance policies to identify any existing gaps.
Commuter benefits. For many employees, length and difficulty of commute can be a top factor influencing job acceptance and retention. Companies offer various forms of commuter benefits, such as pre-tax accounts for subway, train and bus fares, as well as gas reimbursement programs for those commuting by car. From year-to-year, there might be factors influencing an employee’s decision to opt in to a commuter benefits program. For example, employees living in large city move more frequently than those living in rural and suburban areas. If an employee moves closer or further away from work over the course of the year, they might need to opt in, opt out or adjust the amount they’re contributing to a pre-tax commuter plan.
Retirement plans. It can be easy to select a 401(k)-contribution plan at the beginning of your employment and not touch it again until you leave the company. Out of sight, out of mind, right? Well, maybe not. Open enrollment is the perfect annual opportunity for employees to review the details of their retirement savings with an HR team member. For example, remind employees if their company offers a 401(k) match policy — typically, up to 5% or 6% of their base salary — and consider encouraging them to increase their contribution if they are below that threshold. Also, companies can offer automatic 401(k) escalations so that an employees’ contributions increase annually.
With these insights, there’s always time to coach employees on benefits choices that best meet their unique needs.
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