Proprietary data from third-annual report show COVID-19 spurred employees to save at record levels, yet also feel highest levels of discomfort around health care spending
WEST DES MOINES, IOWA (March 9, 2020)—Businessolver®, a leader in Saas-based benefits technology and services, today released a comprehensive report showing the long-tail effects of COVID-19 on employees’ benefits decision-making—specifically, boosting their commitment to healthy saving habits while simultaneously raising their anxiety around health care spending.
Now in its third year, the MyChoice® Recommendation Engine Benefits Insights Report annually examines employees’ understanding, confidence, financial preparedness and risk tolerance when making benefits enrollment decisions. Comprised of proprietary data from the MyChoice Recommendation Engine, Businessolver’s decision guidance tool integrated into its Benefitsolver® platform, the 2021 report takes a multiyear lens (from fall of 2018 to fall of 2020) to analyze and compare employees’ state of mind around benefits choices.
“Our multiyear analysis confirms what benefits professionals and behavioral economists alike have long known and understood: Employees don’t make benefits choices in a vacuum,” said Sherri Bockhorst, Businessolver Senior Vice President of Innovation and Strategy. “They are unquestionably affected by outside circumstances and events that shape how they perceive their benefits plans and prioritize coverage and savings for themselves and their families.”
Employees saving at record levels, yet lower earners remain vulnerable
The health and economic uncertainty created by COVID-19 drove employees to double down on increasing their savings cushion, Businessolver finds, with the workforce saving more consistently than ever in the three-year history of the Benefits Insights Report.
Each generation has made strides over the last three years, with Boomers seeing the most improvement in their ability to save consistently; 40% of Boomers this year say they “always” spend less than they earn compared to 31% in 2019. However, saving seems to be more a function of income than generation.
Loss aversion grows alongside financial preparedness
A basic concept of behavioral economics is loss aversion, the idea that people don’t like to give up what they have. In the 2021 MyChoice Benefits Insights Report, loss aversion applies to employees who have money earmarked for health care costs but are uncomfortable with the prospect of using it for an out-of-pocket cost.
Although employees are saving at their highest levels in three years, according to Businessolver, loss aversion—likely driven by the same uncertainty borne of the pandemic—is at its highest levels as well.
Technology uniquely poised to strengthen employees’ connection to understanding of benefits
The differences in how various generations and income levels approach benefit decision-making highlight the importance of personalizing the benefits experience, from selection to activation. Businessolver found that fewer than 1 in 5 employees (17%) is confident in their benefits this year.
“Even for all the differences we saw in this year’s data around financial preparedness and risk tolerance, the great equalizer was that benefits literacy remains at low levels across all groups,” Bockhorst explained. “Technology can play a key role for employers in improving that understanding and taking the positive strides we saw in financial preparedness even further by offering employees a single, integrated benefits experience that’s personalized to their unique benefits journey for how they choose and then use their plans, both those they elect and those programs many employers make available at no cost. With so many employers indicating they’ll keep their workforces remote or socially distanced for the foreseeable future, benefits technology can be invaluable in maintaining a year-round point of connection and communication as we work through COVID-19 recovery and can all be together again.”
Visit Businessolver to find the full 2021 MyChoice Recommendation Engine Benefits Insights Report, along with related special content and an interactive dashboard that filters data by various demographic metrics.
Since 1998, Businessolver has delivered market-changing benefits technology and services supported by an intrinsic responsiveness to client needs. The company creates client programs that maximize benefits program investment, minimize risk exposure, and engage employees with easy-to-use solutions and communication tools to assist them in making wise and cost-efficient benefits selections. Founded by HR professionals, Businessolver’s unwavering service-oriented culture and secure SaaS platform provide measurable success in its mission to provide complete client delight.
Grant Stoker, Edelman (on behalf of Businessolver)