Wellness Programs Call for Better Benefits Communications

Wellness programs are all the rage this year. But what’s the point of a program that employees don’t understand and, therefore, don’t use? Midwest Business Group on Health has done some research evaluating employee engagement in health benefits and wellness programs.

What they found: Employees still do not understand their benefits. Part of the reason why employees are having trouble meeting their wellness goals is a lack of good communication and resources. MBGH found, “Most employees and dependents don’t fully understand what health care benefits are available to them nor do they fully comprehend the summary plan description (SPD) or what requirements they need follow to achieve incentives (i.e. premium differentials) that may be part of the benefit plan design. As a result, communications efforts frequently go unnoticed, are ignored or misunderstood by the employee.”

According to MBGH, employees want:

• Clear, concise communications
  • “Employees indicate they want clear and concise communications on benefits and what’s available to them, such as cost, coverage, co-pays, benefit changes and who is in their physician network.”
  • Better tools and resources 
    • “Provide employees with best-in-class tools, resources and support, and make it convenient for them to have access to this information at any time.”
    • The ability to easily share information with spouses
      • “Include family members, especially spouses, in providing information about health care benefits and workplace programs.”

So, you may want to re-think some of your current approaches to benefits communications that probably involve a lot of lengthy documents locked behind the firewall.  Here are some quick tips:

• Establish a public website that provides on-demand access to employees and all family decision makers.
• Aggregate everything an employee will need to make educated decisions in a clear, organized way. Include plan docs, calculators, and links to enrollment and carrier websites.
• And most importantly, understand the role of the benefits guide.  It may have a place for those employees who want all of the juicy details but shouldn’t be something you lead with.  Pull out the most important points and serve them to employees in plain, non-jargon language. Your average employee is not going to understand all the insurance terms, let alone read through all of the dense plan docs. So make it easier on them with short, straightforward benefits communications.

Engage employees with video and social media

Video and social media are the way to engage employees these days, says Brian Baker, Vice President at Aon Hewitt Consultants, in a recent interview with Benefits TV.

Baker discusses balancing the “tell” with the “show” by crafting benefits messages using video.

Aon Hewitt presents their four Cs to an effective strategy for employee benefits communications and change management-through-engagement. They recommend utilizing video and social mediums to disseminate communications that are:

• Creative: all communications must have a relevant, creative component.
• Customized: representative of your particular employee demographic and segment.
• Cultural: going beyond corporate culture to take into account race, ethnicity, regional and business unit culture.
• Combined: all pieces must be delivered in combination to be successful.

Employees seek retirement advice from their employers

A majority of people have agreed they would like more guidance from their employer about how to achieve retirement goals according to the 11^th Annual Transamerica Retirement Survey.

Perhaps not surprisingly, employees with a higher overall education level are more likely to be financially well in retirement. Only 63% of employees with only a high school diploma participated in a retirement plan, as opposed to 84% of those with a college degree.

But all education levels showed a desire for direction from their employers.

More than half of all surveyed, agreed that they would like more information and advice from their employer about how to reach retirement goals. In fact, employees surveyed indicated that “educational materials that are easier to understand” is the second biggest motivator in getting an employee to learn more about saving and investing for retirement (behind tax breaks/incentives).

Investing in better retirement education for employees is a cost-effective way to motivate employees to save for their retirement and ensure their financial wellness.

40-52% of workers are delaying their retirement.

70 is the “new 65,” according to Sun Life Financial. Their Unretirement Index, along with Towers Watson’s 2010 Global Workforce Study, show that 40-52% of Americans will delay their retirement due to ill financial health.

Towers Watson found 68% of those workers will continue working in order to keep their health care coverage, while 61% cited their lacking 401(k) plans as the reason for staying. Sun Life found that only 25% are “very confident” they will be able to cover medical expenses in retirement.

Americans are also changing their current lifestyles to meet their financial needs and cope with financial fears by reducing spending and debt, and increasing saving and investing. About 18% are even putting off routine medical procedures to save money.

Voluntary benefits are ineffective without proper education.

Conceptually, offering voluntary benefits has a lot of attractive qualities for employers. In fact, 65% of employees said their voluntary benefits made them feel more loyal at work. But is simply offering them enough?

Voluntary benefits are ineffective without proper education, according to MetLife’s 2010 research and survey. These are valuable options for employees and employers alike, yet they are shrouded with misconception.

Consider the following statistics found in the recent studies:

• 19% of employees surveyed didn’t even know they received discounts on home and auto insurance through their work.
• 75% of employees were interested in critical illness coverage once it was explained to them, and most were even willing to pay the full premium themselves.
• 90% of working Americans faced a legal concern during the past year, estimates the American Bar Association.

MetLife proposed cutting back on promotional materials, offering face-to-face meetings and using innovative means to clear up the confusion.

• Having agents come in to explain policies to individuals can be a good way to get the message through, but it can also take resources and time out of the work day.
• Going green is a logical alternative. Online resources allow cheap and easy access for employees to learn about their benefits on their own time. Inundating employees with colorful glossy paper is costly and minimally effective in a media-infused society. Online efforts provide more engaging material through a familiar medium.

Better education leads to higher FSA enrollment, which saves employers money on taxes.

Good benefits communication can raise employee Flexible Spending Account enrollment by 20% or more, a recent study found. The benefits of an FSA may be obvious to the seasoned HR Director, but not all employees – or employers – know how valuable these accounts can be.

Both employee and employer enjoy significant tax savings when FSAs are used. Employees save on federal and FICA taxes, plus any additional state and local taxes on medical items paid for through their FSA.

Employers, meanwhile, avoid the 7.65% FICA tax on employee wages. Based on the average annual contribution of $1,340, employers can save $100 per employee. 100 new participants means an average $10,000 in savings per year.

The study set four keys to a successful FSA enrollment campaign:

Know your audience. The study found these statistics about FSA participants:

• Average age: 43
• Marital status: 67% married (59% with children)
• Median income: $55,000-$65,000
• Key benefits decision-maker: Female

The study also found that employees use FSAs to reduce their taxable income, cover gaps in health plans, and finance dependent care.

Craft Key Messages. Clear up common misunderstandings, while highlighting key points clearly and concisely.  For example:

• An FSA is not another deduction, but money already being spent.
• The depth and breadth of eligible expenses, i.e. vision care to day care.

With FSAs, it’s easy to get bogged down in the details so be sure that you really focus on what most employees need to know to make a decision.

Select Methods of Communication. You probably don’t need to be convinced that these days employees across most demographics are accessing this type of information on the web.  Try and stay away from lengthy, static PDFs and brochures and avoid locking your materials behind the firewall, where family decision makers can’t get to it easily.  Putting together a short video on the benefit can be a really effective way to provide something engaging while allowing you to explain the benefit in more conversational terms.

Schedule Enrollment Communications. Reach out to employees up to 6 months in advance with education, as well as re-enrollment and qualified change in status communications.

Providers face rising health care costs but still must supply the legally required amount of care.  To do so, 63% of employers who are changing plan details have decided to raise the percentage that employees contribute to the premium, while 46% aim to raise out-of-pocket maximums.  Another 61% will be offering consumer-directed health plans, or CDHPs, which are a proven method of increasing consumer flexibility while cutting costs.

With so many benefits changing, it is important that employees thoroughly understand the developments and the reasons behind them.  The efforts that must be undertaken to get an employee to fully understand a CDHP are substantial and probably well telegraphed at this point.  If your strategy is to introduce this complex new benefit with a few vendor-provided brochures, you’ll likely end up with the status quo – single digit adoption rates.

When changing health plans, benefits communication can help focus on the positive.

Shifting a larger share of the cost to employees will likely be seen as a negative no matter what you do.   But, it’s never a good idea to let employees come to their own conclusions about those changes.  With effective benefits communication, you can provide context and position plan changes with your employees. Further, you can show them how to better utilize their plans and capture the cost-savings opportunities that are available to them.  Investing in benefits communication is perhaps the easiest and most cost-effective way to improve the perception that employees have about their benefits and about you as an employer, even in the wake of negative changes.

Benefits communication used to engage and retain employees as economy improves

Mercer recently announced the results of their Attraction and Retention Survey, covering over 320 employers this year. These are their most valuable findings:

Better economy means higher employee turnover. As the economy and job market continue to improve, 62% of companies think employee turnover will increase as well. When employees have more options, they are less likely to be loyal unless their company puts effort into keeping them.

Companies are expanding again. The economy is picking up and so is hiring. Nearly all companies surveyed are hiring. In fact, only 3% are reducing their workforce. Nearly one-third (27%) of companies are expanding, up from 12% shown in the 2009 Unprecedented Times Survey. This is a clear sign of companies’ confidence in the economy.

Companies are concentrating on engagement to retain employees. Employee engagement has increased in 47% of companies in the last 12-18 months, likely thanks to companies’ specific efforts. Engaged employees are less likely to stray and have higher performance levels, according to a Mercer principal. Retention is as important as expansion, when other employers can lure good talent away.

Benefits communication is the highest contributor to increasing employee engagement. Organizations have increased non-cash rewards as a means of retaining and engaging employees in the past 18 months. The reward most often used was benefits communication, which companies have used 27% more. Even as the economy improves, non-cash rewards serve as an important means of curbing turnover. Non-cash rewards are a good way of communicating confidence and appreciation for employees. It is also much cheaper to implement rewards programs than to hire new replacement employees. If employees don’t understand, value, or even know about these rewards then they won’t merit much. That’s why benefits communication has become such a vital resource for companies to keep employees engaged and loyal.

Here are some highlights from the study:

• “What you say” is as important as “what you do.”When it comes to workplace satisfaction, the way that you communicate benefits may be just as important as the benefits themselves. In fact, those employers with poor quality benefits packages were able to improve workplace satisfaction ratings by 32 points with highly rated benefits education.
• Benefits Changes on the Rise; Quality of Benefits Education on the Decline. Roughly half (45%) of employees surveyed reported that they had seen changes in their benefits packages in 2009. And yet, the quality of benefits education declined sharply as 29% of workers gave their benefits education positive ratings in 2009 vs. 39% in 2008.
• Accommodate various learning styles. 70% of employees surveyed use web-based materials when available. Online videos and interactive tools are a great way to satisfy all three learning styles – visual, auditory and “hands on.”
• Effective benefits education helps retain talented employees.  In fact, 77% of employees who believed their company had good benefits education said they would stay with their employer even if they were offered the same pay and benefits elsewhere. As the job market improves, employees feel more comfortable looking elsewhere, so communicating the value of benefits is important.

Benefits education proven effective for increasing employee satisfaction

Investments in benefits education can be a low-cost, high-impact way to affect worker satisfaction.  Even when paired with a below par benefits package, effective benefits education can be a cheap means to dramatically improve job satisfaction, employee engagement, loyalty and productivity.  Unlock the value of your benefits package with benefits education.