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.

Taken in December 2010 following last year’s annual enrollment period, the UNUM study finds that effective benefits education enables employees to make better choices, can increase employee loyalty and improves how employees rate their benefits packages.

They’ve wrapped up their findings in a catchy 3+3 slogan: three weeks plus three types of education methods = a better benefits education. This reflects the findings that apparently half of the employees surveyed had less than three weeks to review their benefits.

It’s not what’s on offer that counts as much as how it’s presented
Interestingly, employers don’t have to offer a particularly good benefits package to achieve high employee satisfaction.

• 85 percent of employees who rated their benefits education as excellent or very good also rated their benefits package as excellent or very good
• 80 percent of employees who rated their benefits education highly also rated the employer as an excellent/very good place to work

“When employees have adequate time and the right tools to understand and choose their benefits, the payoff is powerful,” said Bill Dalicandro, vice president at Unum. “The research shows that employees with an effective benefits education have higher levels of engagement, morale and loyalty.”

Cultivate a benefits consumer culture through education
Are you trying to encourage a culture of benefits consumers but reducing your benefits communication spending (and there’s not much to reduce!) at the same time? If so, the success–and ROI–of your new benefits offerings may be at risk. A little money spent here can go a long way.

Drive 401(k) participation by tying to Open Enrollment

contribution changes to 401(k) plans during open enrollment, employers have seen an increase in participation.   The study showed an 11% year-over-year increase in the number of employees making a change to their retirement plan election as a result of the association with the health care open enrollment period.  And nearly all of these election changes were positive (93%), meaning employees started or increased contributions to a plan.

While Health & Welfare benefits enjoy an annual period for employees to reflect on their needs and make adjustments, retirement plans have not historically enjoyed this kind of attention.  And studies show that it’s sorely needed.  This Open Enrollment period, consider offering some communications dedicated to your 401(k) plan and provide easy access to make changes.  You may be surprised at how many employees engage.

Meaningful New Hire Connections

is formed much, much sooner.  In fact, like so many other things in life, your greatest opportunity to build trust and excitement about your organization is likely with the very first impression you make.

So, what’s your organization’s first impression?

Is it a thick new hire packet full of brochures and forms mailed to the home of a future employee?  Is it a live orientation that is delivered inconsistently  - with a great HR presenter in one location and a less than compelling/knowledgeable speaker in another.  Even worse, is that PowerPoint presentation given over the phone to new employees in remote locations?

Many of our customers have come to us with this problem: “We’re doing a lot of hiring this year.  Our new hire orientation process is resource intensive and not representing our organization’s culture or employee value proposition effectively. Help us!”

This is the type of problem that the multimedia web was created for.  Here are some important ways that web multimedia can help your new hire orientation process:

• Establish a meaningful connection with new hires.  Retire the static new hire packets and long PowerPoint presentations.  By leveraging web video you can build excitement and convey the unique and dynamic culture that exists in your organization.
• Provide a consistently rich experience customized to your company.  By moving to the web, employees and families across the globe have access to the same compelling new hire orientation experience.  It’s consistent and it’s available on demand.
• Reach them before they even get into the building.  Studies show that making a new hire feel welcome and comfortable from day one is imperative to their long-term success.  This is best accomplished by having a new hire spend time with their new team, working on real projects. Enable this to happen by reducing or even eliminating time consuming orientation meetings. Provide pre-boarder access to your online new hire orientation and have employees show up on their first day already informed about deadlines, benefits, etc. and ready to get started in their new role.
• Save time and money.  The web offers you the ability to reduce resource intensive live new hire orientation meetings and packets, binders and other paper materials.  Something tells me you won’t miss those overseas new hire orientation meetings at all hours of the morning and night…

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.

Benefits Communications Turn Risk Into Opportunity

As the economy improves, the tide may be turning once again according to several new studies.   Here are some key findings:

• Up to 60% of top performing employees plan to leave their organization within the next year
• In October 2010, the number of employees voluntarily quitting their jobs surpassed involuntary terminations
• Employees will be giving more serious consideration to new job opportunities than they would have in the past
• Employee engagement is at a historical low – some employees spend up to 50% of their time looking for another job

Think: risk and opportunity.

It’s time once again to use benefits as a strategic tool to keep your best employees and get new stars in the door. And don’t forget, your success is as much about how your benefits are communicated as the benefits themselves.

Employees Remain Cautious

according to the Q4:2010 Principal Financial Well-Being Index survey.  Here are some of the key takeaways:

• Half of employees did not feel better about their financial situation than they did a year ago. Nearly 40% of employees were still cautious about the economy.
• 72% of employees are concerned about their long-term financial future.
• Health care costs (65%) and economic uncertainty (59%) topped their short-term concerns.
• Living within their means (62%) and having an emergency fund (46%) were employees’ main priorities as they re-build their financial well-being.

While this data can be helpful as a benchmark, it’s always best to assess your own employees to understand their specific concerns and issues when it comes to money.   From this assessment, you can build the most effective financial wellness programs and have the greatest impact on the well being of your population.

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.