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?