Last fall I had the pleasure of hosting a UBA WisdomWorkplace webinar called “Success in Voluntary through Strategic Benefits Communication.” I discussed recent Sun Life survey data regarding employee engagement and understanding of the value of voluntary benefits.
In the world of voluntary insurance carriers, success in voluntary benefits can be measured in various ways. A key metric is employee participation. For carriers, this is important because the greater the employee participation in a voluntary product, the better the spread of risk, which leads to appropriate margins and sustainable pricing.
But in the world of HR, this has not been a key metric. While good participation can reflect employee acceptance (and low participation might raise the question about whether the product is worth the time it takes to administer payroll deductions and facilitate billing), employee engagement has become more important.
This concept of knowing what you’re participating in makes me think about a good friend of mine who, a few years ago, reached out to me in a panic. He works for a large corporation with employees spread across the country. His employer was dropping all medical plan PPO options for the coming year and switching to a high- and higher-deductible option. He was sent an e-mail that provided few details but explained the action was due to high health care costs. There was no indication that more information was forthcoming, and the communication as a whole was insufficient because he couldn’t find answers to the questions he needed, the most important being, “what does this mean to me and my family?” I explained recent trends and how a high-deductible health plan (HDHP) with a health savings account (HSA) could be advantageous to him, but as we all know, not everyone is knowledgeable about their benefits or has friends in the business to explain their options.
When employees aren’t engaged in good benefits decision making, they can misunderstand or underuse their plans. Our recent survey showed that while employees are becoming more aware of changes in their medical plans, 54 percent still don’t know their out-of-pocket maximum, and 33 percent don’t know their deductible.
Employees are, however, concerned about their financial risks, and most do not have emergency savings or a cash flow to handle unexpected medical expenses. Moreover, research from the Federal Reserve shows that some people actually choose to forgo needed medical care simply because they cannot afford it.1
While these data point out employee challenges, our research does provide some encouraging feedback that shows how we might be able to help employees become knowledgeable about their benefits choices.
For example, though employees understand the benefits gap, 62 percent of those surveyed say they need additional coverage. We also learned that 70 percent were not familiar with the term “voluntary benefits,” but once they understood what voluntary products are, 63 percent agreed that these benefits are helpful in filling the gaps in health care coverage, even if they have to pay for these benefits themselves.
The real kicker is that 87 percent say more customized benefits choices that fit their specific lifestyles would help them make the right health plan choices.
This is where strategic benefits communication can play a vital role. In addition to ensuring that employees really understand the value of all of their benefits, including true total compensation, a well-planned communication effort engages employees by empowering them with information so they are confident in their open enrollment decisions.
How will you know whether you have been a successful communicator? In subsequent posts, we will talk about gathering employee feedback.
Over the next few months, this blog series will examine the ways HR benefits professionals can achieve success—not just in offering voluntary products to employees, but more important, in their overall benefits communications.1. Report on the Economic Well-Being of U.S. Households in 2014, Board of Governors of the Federal Reserve System, May 2015, accessed January 2017, https://www.federalreserve.gov/econresdata/2014-report-economic-well-being-us-households-201505.pdf.