Employers’ 2018 open enrollment preparations are slowly but surely gaining ground.
These gains are reflected in the latest data collected by Employee Benefit Adviser in its monthly Open Enrollment Readiness Benchmark (OERB) survey. For May, employers with Q1 start dates who say they’re on target with their open enrollment preparations rose to a score of 32. While that’s still quite low, the percentage of employers who deem themselves prepared for this year’s enrollment activities has steadily risen month by month since January, when it stood at 25. Overall employer readiness for all 26 enrollment activities tracked by the OERB also rose slightly from the prior month to 35.
One of the five activities grouped by the benchmark under enrollment preparations is setting goals for the current year’s open enrollment process. At 32, here too more employers consider themselves more prepared than any time since the start of the year. “Benefit advisers need to sit down with their clients to review their strategic goals for their benefits programs and the plans that are in place to support those goals,” says Jack Kwicien, a managing partner at Daymark Advisors, a Baltimore-based consultancy that works with benefit advisers to build their practices.
As an example, Kwicien points to the target participation levels that many employers have for their 401(k) plans. A logical open enrollment goal for an employer whose plan stands at only 45% to 50% participation would be to step up efforts to educate employees about why they should participate. For the employer, this is important to ensure that the 401(k) plan is compliant with federal discrimination testing requirements, and that the retirement plan isn’t “top heavy” with executives and senior managers, while rank-and-file employees decline to join.
The same is true for the employer’s other benefit offerings, including health insurance. And to better understand why employees aren’t participating in a retirement plan or a health plan, Kwicien suggests that the adviser review the employer’s enrollment data from prior years. This can shed light on the reasons behind the opt-outs, which can range from cost considerations and misconceptions about the benefits provided by a plan to large numbers of employees with working spouses who are getting their coverage elsewhere. Such insights allow the adviser to work with the employer on setting more realistic participation goals for each benefits category and to ready educational and outreach materials that address employee population’s chief concerns.
Improving the enrollment process
Apart from benefit participation objectives, goals should be set for the enrollment process itself.
Most employers, according to Kwicien, are not as proactive as they ought to be about tracking participation levels and engaging employees sufficiently early in the enrollment process. That typically leads to a “fire drill” during the final weeks of the enrollment period, when the employer finally realizes that enrollment levels are well below the target levels and there is only a short time left before the enrollment period ends. “These type of high-pressure, last-minute enrollment efforts don’t lead to a lot of informed decisions on the part of the employees,” says Kwicien. “They become just ‘check off the box because this is something that I have to do,’ which runs completely counter to employees understanding their benefits and appreciating what the employer is trying to do on their behalf.”
Involving employees in the enrollment process earlier on gives them more time to seek out answers to their benefit questions and to determine which offerings are best suited to their particular circumstances, which can change from year-to-year due to life events such as getting married or welcoming a new child.
“Giving employees a six- or eight-week window to get their questions answered leads to much better participation results,” Kwicien notes. And that in turn supports the employer’s efforts to use its benefits package to attract and retain a topflight workforce, which — along with maintaining employee health and improving productivity — are the primary reasons most employers offer benefits in the first place.