When you consider it, humans can be pretty irrational.
From running up a credit card balance to indulging in extra dessert after dinner, we make decisions that feel right in the short term, but that may hurt us in the long term. We may even know our choice isn’t the best, but fear of the unknown can be a powerful motivator to stick with the status quo.
And while we all make the occasional short-sighted decision in our personal lives, more serious choices are on the horizon when Annual Enrollment comes around each year. AE may only last a few weeks, but the elections made have a lasting impact—and big consequences—for an entire year. AE is fast approaching, meaning now is the time for HR leaders to consider how their company’s employees will approach the crucial moment of selecting their benefits.
The latest Businessolver data from the MyChoiceSM Recommendation Engine report suggests that employees aren’t always choosing the best benefits to meet their short- and long-term needs. Understanding the limits to healthy decision making can help HR professionals implement the right tools to lead employees to the best available benefits for their needs.
More than anything, data shows that employees don’t see themselves as risk-takers. When asked how they would characterize their tendencies, only 3% of employees classified themselves as comfortable with taking big chances. Perhaps unsurprisingly in a world marked with so much unrest, the vast majority make decisions to shelter themselves from unexpected events.
This risk aversion translates into benefits selections. An employee afraid of risk may be likely to select a plan that offers the strongest protection against unexpected costs, even if the monthly premium puts a strain on their wallet. For a person who leads a safe, healthy lifestyle and faces tight budget restraints, a High Deductible Health Plan (HDHP) might help control monthly costs and balance the day-to-day budget. It’s HR’s responsibility to make sure these distinctions are widely understood.
Compounding the issue of risk aversion, employees struggle to understand their benefits options. Businessolver’s MyChoiceSM Recommendation Engine results found that less than 1 out of 5 users characterized themselves as experts about their own benefits. That means that in a benefits environment with increasingly complex offerings and plan structures, 80% of employees are likely not knowledgeable enough to fully understand their benefits options or maximize the benefits they select.
It’s within this context of risk aversion and limited benefits literacy that Businessolver developed product innovations that look toward 2019’s fast-approaching AE season. Here’s what’s we’ve developed to support smart, rational decision making for all employees:
It should be the goal of all empathetic employers to ensure benefits technology is acknowledging the reality of ever-evolving employee needs. With these innovations, our tools can be your HR department’s partner in doing just that.
Interested in learning more about how Sofia can learn to support your employees? Check out our infographic.