Businessolver’s 2nd annual report on benefits insights for the American workforce.

2020 MyChoiceTM Recommendation Engine Benefits Insights Report

Head or heart? The reality behind what drives employees' benefits decision-making.

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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 this report we review what employees were thinking and feeling as they made their 2020 benefits elections. Data related to 2020 elections were gathered in late 2019, as employees considered what benefits they would need for the coming year. The results are a powerful indicator of employees' state of mind and financial position going into the COVID-19 pandemic and it presents opportunities for consideration going into Annual Enrollment 2021.

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Part 1: The Benefits Insights Report: Year Two During Annual Enrollment

In the fall of 2019, millions of American workers enrolled in their benefits for 2020. As they reviewed their options and needs, no one knew that just a few short months into the new year their benefits choices might matter more than ever before. Had they picked the right medical coverage? Did they fund a pre-tax account for healthcare costs? Did they have access to and add voluntary options that would protect them from catastrophic costs? In our inaugural MyChoice Recommendation Engine Benefits Insights Report, we explored employees’ state of mind as they made their 2019 benefits decisions.

Three primary findings emerged based on employees’ responses in our decision guidance tool as they reviewed their options and made their benefits choices:


Benefits literacy is low. Employees don’t always have a strong understanding of their choices and the potential impact of their decisions.

Employees don’t like risk, which informs how they think about benefits.

Generally, people are not financially prepared for the unexpected, although some are more prepared than others.

Part 2: The MyChoice Recommendation Engine: Supporting Individual Employees, Understanding Trends

The MyChoice™ Recommendation Engine is a decision guidance tool that connects employees to better benefits choices by taking into account their holistic state of mind. Users answer a set of specially designed questions that help align a benefits recommendation to their specific circumstances around benefits literacy, emotional state and financial health. In short, users tell the MyChoice Recommendation Engine what they’re thinking and/or feeling and it uses that information to suggest the best benefits choices.

Each year, hundreds of thousands of employees use the MyChoice Recommendation Engine to get personalized benefits suggestions. As a result, we have insights into what a representative sample of the workforce is thinking as they consider their benefits choices. For a second year, we have analyzed all that data to create the 2020 MyChoice Recommendation Engine Benefits Insights Report.

Part 3: Employees’ State of Mind

Going into 2020 annual enrollment, there was not much appreciable change from the prior year in terms of employees’ benefits literacy, risk aversion or financial preparedness. However, overall people seemed somewhat more positive, more prepared financially and slightly more willing to accept risk. .

Here were some of the key findings:

Benefits Literacy: Employees Still Don’t Understand Benefits That Well

Benefits are complex. Within the entire benefits continuum there are various types of coverage and within those categories there may be numerous options with different costs. It can be challenging for employees to feel confident about their expertise and their ability to navigate through myriad choices.

To further add to the complexity, benefits evolve. Plan sponsors add more and new options, costs change. For employees, benefits literacy can feel like a moving target.

Risk Aversion: Employees Don’t Like to Take Chances

As people make their benefits decisions they should factor in the potential risk and reward of the options available to them and make an informed choice. However, employees go into the decision-making process with an imperfect understanding of benefits based on poor benefits literacy. That makes informed decision-making harder.

Employees also don’t like to take risks, and they put a disproportionate importance on perceived loss.

Despite Some Gains, Employees Are Still Financially Fragile

As they made their 2020 benefits decisions, employees trended slightly better off financially than the prior year. More people were able to save consistently, an increasing number had cash savings for an emergency and fewer overall would get soaked by a large healthcare bill.

However, even with the modest improvements, less than a third of employees were always able to save or were fully prepared for a large healthcare cost. Just under two out of 10 employees would have to go into debt if faced with an unexpected expense and almost the same amount didn’t have a viable plan.

Part 4: Putting the Data to Work

The insights gathered in the full report represent the state of mind of American employees before a pandemic that has significantly changed the landscape for many people. As HR professionals, understanding how things were before can help prepare for a more strategic benefits approach going forward. As HR and benefits pros consider the future, here are five suggestions for where to concentrate.

  1. Benefits literacy needs a renewed focus. Benefits provide employees with an important financial and emotional safety net, but without a better degree of understanding, their value is not fully realized. While they want options and choices, employees continue to be confused by their benefits, which renders decision-making challenging.
  2. Helping people make good decisions is key. Employees need help throughout the entire benefits lifecycle—from when they make their enrollment choices to when they use their coverage. Since employees are not experts, they need easy-to-understand guidance that is intuitive, actionable and right at people’s fingertips.
  3. Financial well-being is more important than ever. While employees going into 2020 annual enrollment were slightly more confident and somewhat better off financially, overall employees lacked the ability to deal with unforeseen costs—both healthcare- and non-healthcare related. This included not only the financial wherewithal but the emotional preparedness.
  4. Employees need options to truly customize coverage. Given that employees don’t understand benefits, and in the absence of solid decision guidance, it may not seem appropriate to offer more and varied options. But, it’s only with a comprehensive suite that employees can create the personalized benefits that meet their needs, especially when those needs vary widely across the four generations active in the workforce. (And this fact reinforces the need for strong decision guidance.)
  5. Alternatives to traditional group coverage may make sense. Most employers only offer a couple of healthcare coverage choices. So, for employees eligible for coverage, options are often limited. At the same time, there may be others in the workforce for whom coverage is not available at all, for example, part-time or contract workers.

There’s much more to discover! Download the full report.

Laying the Foundation for What’s Next

The world has shifted since employees made their 2020 benefits decisions. However, the realities of their state of mind in what seems like another time can help inform benefits strategy, design and delivery going forward.

HR pros should understand the context in which employees choose and use their benefits, as well as their attitude, behaviors and challenges around managing their finances. This knowledge can help inform what will be appropriate benefits strategy in the new normal, ensuring employers and their employees are poised for a strong recovery and a successful future.

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