News

Low employee knowledge, engagement about benefits

By Kelley Butler, Employee Benefit News

As employers begin preparing for this fall’s open enrollment season, they are being confronted with new survey data from a variety of sources that show employees’ low knowledge about benefits and how little time they spend making benefits decisions.

• 27% of employees with disability insurance don’t know what percentage of their income is protected (Guardian Life Insurance).
• 11% of workers refuse health coverage even when no financial contribution is required (Kaiser Family Foundation).
• Most employees - 63% - spend 30 minutes or less to make benefits decisions, and spend about 0.8 hours to research their options before buying - compared to 6.8 hours for a car and 1.3 for shoes (MetLife).

As such, it’s no wonder that 63% of employers surveyed by Watson Wyatt rank employee communications as a top challenge during open enrollment, with 36% saying engaging employees is toughest.

“Annual enrollment has changed significantly at most companies,” says Jeri Stepman, Watson Wyatt leader for health and welfare administration. “It’s moved from a transactional or registration-like process - where the goal has been to automate and to increase efficiency - to an engagement and decision-support process, where the goal is to engage employees as benefits consumers.”

With employee knowledge and engagement already at a low point, crafting an effective communications campaign is key for this year’s enrollment period.

“Companies make a huge investment in benefits and people programs,” notes Beth Marusi, vice president of XL Communications, a Connecticut-based benefits communications firm. “To maximize the value of that investment, they have to understand the importance of having a strategy for communicating those benefits.”

Timing is everything

One of the first steps in launching a valued enrollment communications initiative is planning it well in advance - even starting now - so that benefit managers can distribute information multiple times across multiple channels. The goal is to increase engagement, allow employees to process all of the information and ask questions to increase knowledge, then give them time to make educated selections.

“Planned redundancy is a good investment,” says Patricia Zar, senior vice president at Aon Consulting. “People are busy, and this isn’t at the top of their list. It’s important to get people engaged early so that they don’t wait until the last minute.”

Zar adds that communicating over a longer period of time helps to encourage employees to take their time in making decisions. “You want to impress upon employees that the subject matter is complex, and the decisions they have to make are more complicated now than in the past and will have a much greater financial impact on them. Say, This is something you need to spend some time on, and we have the tools and resources to help you.’”

Also, spreading communications messages over a longer time span than a few weeks prior to enrollment is useful because “people don’t learn in compact situations,” says Jon Kessler, chairman of WageWorks, a provider of health care savings accounts. “They need to learn at the point that is convenient to them as a consumer,” and providing a longer time frame helps to

Focus on health

No matter what medium employers use, it appears the largest communications flop has been in educating employees about health care, particularly consumer-driven health plans, which may explain the plans’ low adoption rates.

According to WageWorks, 49% of employees with high-deductible health plans have not received any information from their employer about how the plan and HSAs work. Fifty-nine percent did not receive information about where they could open an HSA.

The lack of information isn’t due to lack of employee interest. WageWorks also finds employees want clear information to help choose health care benefits (33%), better information about costs and savings of health benefits (28%), hands-on help from health and financial experts (15%) and tools for health care expense management (12%).

“It’s almost like the goal with CDH is to turn average working families into tax experts,” Kessler says. “But getting employees to buy into an HSA, HRA, FSA or any other kind of A’ means giving information in a context that workers and families can understand. Luckily, the upcoming open enrollment season provides a new opportunity for employers to offer more hands-on guidance and get it right in the coming year.”

The key word being “year.” Benefits communication is a year-round marathon, not just a two-week sprint during open enrollment, experts say.

Simply, Kessler says: “It’s like voting. Why don’t more people vote? Because you only get one day to do it. Communicating beyond open enrollment is key, because it’s not just about that two-week period and the plans people enroll in. What matters is how they use the plan.”

Further, employees’ lives continue to change even after enrollment is over, and they need benefits information to adapt to those times, says John Wuich, vice president and national client manager for ADP.

“During any type of life change, they need you providing information - going from active to retiree status, after diagnosis of an illness, the death or birth of a dependent, or getting promoted,” Wuich says. “During those times, different questions rise to the top, and the more hands-on and more personalized the communication, the more effective” employers will be.

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