Businessolver’s 3rd annual report on benefits insights for the American workforce.

2021 MyChoice® Recommendation Engine Benefits Insights Report

Choosing benefits in the time of COVID-19

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Forces other than rationality come into play when employees choose their benefits, and that’s what the MyChoice Recommendation Engine Benefits Insights Report looks to uncover, learn from and share with the HR and benefits community. By understanding where employees are in terms of their emotional, financial and physical reality, employers can design and deliver better benefits that address the needs of a multi-generational workforce and the organization, for a better and more impactful return on investment all around.

About this Report

In the fall of 2020, we had been living with COVID-19 and its impact for the better part of a year. From an HR and benefits perspective, many parts of the nation had returned to something at least resembling stable. Fall annual enrollments occurred prior to the nationwide infection surges that resulted from holiday gatherings and before any vaccines were approved or administered. Much of the civil unrest that occurred during the summer had slowed and unemployment had decreased to 6.7% in November from a record 14.8% in April.   

It was in this context that the American workforce made its benefits decisions for 2021.  

In this third year of Businessolver’s annual MyChoice® Recommendation Engine Benefits Insight Report, we look specifically at the impact of COVID-19 on three factors that influence employee decision-making that we’ve been tracking since 2019.   

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Part 1: The Benefits Insights Report: Year Three

Based on employees’ MyChoice responses as they reviewed their options and made their benefits choices, three primary findings around 2021 annual enrollment emerged:

Benefits literacy plummeted, but then recovered to its normal low level. Over the past three years, employees have indicated that they don’t have a strong understanding of their choices. In 2020, employees who chose benefits during a mid-year annual enrollment reported more confusion than employees who enrolled in the fall.

COVID-19 has affected employees’ risk tolerance. In general, employees don’t like risk, which informs how they think about benefits. However, the pandemic appears to have made employees more loss averse than in prior years.

Despite financial strains from COVID-19, employees were able to save during 2020. However, some still were unable to save, and those employees are now in a worse financial position.

It may seem reasonable to assume that employees’ benefits understanding, risk tolerance or financial preparedness would be more negatively affected by a global pandemic. However, for most employees, the shift has been minimal. In fact, looking at the entire workforce, more people are saving and prepared for the impact of out-of-pocket health care costs. But beneath the surface, some groups of employees entered 2021 far worse off financially than in years past.

Our 2021 report offers guidance for employers around insights from the MyChoice Recommendation Engine data along with steps to help address the areas of concern.

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Part 2: The MyChoice Recommendation Engine: A Resource to Help Individual Employees, A Tool to Uncover

The MyChoice Recommendation Engine is an optional online resource that organizations can leverage to support employees as they make benefits elections in the Benefitsolver® platform. The MyChoice Recommendation Engine connects employees to better benefits decisions by taking into account the whole person—their health, their finances and their emotional state.

When they use the Recommendation Engine, employees answer a special set of questions that reflect their employer’s programs and offerings and help uncover their state of mind prior to the benefits selection process. Their responses drive a personalized set of recommendations appropriate for that employee’s situation by taking into consideration their emotional, physical and financial well-being. In this way, MyChoice supports individual employees with their benefits decision-making.

However, when we aggregate the responses and demographic data from all users, we gain a unique snapshot into what’s driving employees’ benefits decisions including benefits knowledge, emotional state and financial well-being at the workforce level. In this version of the report, we highlight differences between employees’ state of mind at the end of 2019 and how they were feeling when they enrolled for their next year’s benefits at the end of 2020, while the nation continued to feel the impact of COVID-19.

Part 3: Employees’ State of Mind: What the MyChoice Recommendation Engine Revealed

Going into 2021 annual enrollment in the fall, the country was in the midst of a global pandemic, but the most significant spread and morbidity was still to come.

There was no real change from prior years in terms of employees’ benefits literacy or risk/loss aversion. However, in terms for overall saving and financial preparedness, the workforce was at the highest level of a three-year upward trend.

Here were some of the key findings:

A Continuing Challenge Around Benefits Literacy: Employees Still Don’t Really Understand Benefits

Lack of benefits knowledge isn’t a new challenge for employers to combat. Benefits are complex, and many employees report being just plain confused. Since 2019, just under a third of employees say they don’t understand their benefits. However, employees enrolling in the middle of 2020 reported more confusion, at just under 40%.  

By the fall, the workforce displayed higher levels of confidence about their benefits comprehension, and the level of confusion had returned to pre-pandemic levels. However, less than one in five employees feel truly confident about their benefits knowledge.

On average, 86% of employees are confused about benefits, does this describe you? 

AE 2019

AE 2020

AE mid-2020

AE 2021

Yep! That's me 





I'm a pro 





I know where my ID card is 





Employees Don’t Like to Take Chances or Spend What They’ve Saved: Risk and Loss Aversion

In general, humans don’t like risk, and this is borne out when it comes to benefits.  

When asked to rate their risk tendencies, employees overwhelmingly identify with activities that are low risk, including lounging and golfing (66%). About a third characterize themselves as bikers with just a small percentage considering themselves as high-risk-taking rock climbers. 

A Growing Gap in Financial Well-being and Preparedness

In the past few years, employees seem to have doubled down on saving and, overall, the workforce is saving more consistently. The number of employees indicating they are always able to save has increased, while those reporting they are never able to save has decreased.   

Those earning the least showed the smallest improvement in a consistent ability to save, while some employees in the middle range actually lost ground during the past three years. Employees earning over $100,000 showed the most gain in their saving habits, with just over 50% indicating they always save.   


AE 2019 

AE 2020 

AE 2021 

Less than $30k 




























In terms of saving for health care costs, more employees have the protection of an emergency fund than in previous years. Those who indicate they would “get soaked” by a large bill has decreased, while more have an “umbrella” to protect them.

Part 4: A Data-Based Approach to Moving Forward


These insights represent the state of mind of American employees during a pandemic that has significantly changed the landscape of our national life. Understanding employees’ state of mind during these unprecedented times can help HR and benefits professionals with strategic planning and execution as they begin to shift their focus toward economic recovery and renewal.

As HR and benefits pros work toward creating a benefits approach that addresses the emerging needs of the new workforce, here are three suggestions for where to concentrate:

Benefits literacy and decision making need continued emphasis.

Benefits are an important part of compensation and offer a valuable financial and emotional safety net for employees, a reality people increasingly appreciate. But selecting and activating benefits appropriately is still an area where employees need significant support since they lack a high level of benefits knowledge. In addition, risk or loss aversion can contribute to poor decision-making.

Employees require support during the entire benefits lifecycle—starting with enrollment and continuing as they use their coverage or hit employment or life milestones. While traditional annual enrollment communications continue to have a role, they increasingly represent the bare minimum. Employers who rely solely on once-a-year enrollment guides are missing the opportunity to connect with employees in the more diverse ways they now consume information.

As benefits consumers, employees want and expect their benefits experience to be more like the rest of their lives. Benefits enrollment and access should be available online and via mobile applications that offer embedded resources and support tools. This helps employees get the real-time information and guidance they need to feel confident in their choices.

Financial well-being is more important than ever.

For the past several years, employees overall have made strides in financial preparedness. They are saving more and have more set aside for out-of-pocket health care costs.

However, much of the improvement has been among employees earning the most. For those in the middle and on the lower end of the earning spectrum, things have not improved and in some cases have gotten worse.

That’s why the importance of helping employees make good benefits decisions while also supporting them in creating savings for health care expenses and emergency needs can’t be overstated.

Tax-advantaged accounts can be helpful. However, for those employees who aren’t able to regularly save, allocating dollars to health care accounts may seem unattainable, no matter how advantageous those accounts may be.

A subset of the workforce continues to struggle with an inability to save and may be experiencing financial stress, which has serious implications in terms of productivity and retention.

Add-on options can address financial pressures and enhance decision-making with personalization.

Health care isn’t the only spending employees need to be prepared for. People face the possibility of having to fund a range of unexpected expenses from loss of income due to an accident or disability, to a sick pet, to a lost smartphone.

In addition to core coverage, offering optional choices that complement medical coverage can be a significant step in minimizing the financial impact of health care costs. This includes options like hospital indemnity, critical illness and accident insurance that can help employees allay some of their legitimate fears around out-of-pocket costs. When offered these adjunct options, employees may be more likely to elect a high-deductible plan. The contribution savings could free up dollars for an HSA while potentially not increasing the employees’ per-paycheck costs.

Looking for even more insights?

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The Next Normal: HR Can Help Lead the Way

HR professionals have always understood the value of benefits—from boosting recruiting and retention to safeguarding the health and welfare of an organization’s people.  

With COVID-19, the world at large has caught up and benefits have taken a center-stage role. 

However, there is a tension. Employers want to provide valuable, cost-effective protection, but there is a substantial cost. In the face of an economy that contracted swiftly and significantly in 2020, employers’ goals may collide with the financial realities of a potentially long recovery.  

Understanding what employees are thinking and the challenges they face can provide a foundation for HR/benefits professionals to plan pragmatically for the short term while strategizing for the long term.

Ready to really dig in?

Forces other than rationality come into play when employees choose their benefits, and that’s what the MyChoice Recommendation Engine Benefits Insights Report looks to uncover, learn from and share with the HR and benefits community.
Download the Full Report