Better Employee Communication Could Improve Voluntary Benefits Satisfaction

Employees say they want more choice in their benefits programs. Employers have increased voluntary benefit offerings in response. But only 36 percent of employers are satisfied with employee participation in their voluntary benefit programs. What we’ve got here is a failure to communicate.

Eighty percent of employees surveyed for MetLife’s annual U.S. Employee Benefit Trends Study last year said they wanted “more personalized benefits geared to my individual circumstances and age.” Voluntary benefit programs allow employees to select only the specific coverages (and often level of coverage) that they want. But only 36 percent of employers are satisfied with their employees’ voluntary benefit participation rates.

So what’s the problem? Although employees say they want more choice, too many choices can lead to confusion. And confusion can lead to inaction. In his book The Paradox of Choice: Why More Is Less, Swarthmore College professor Barry Schwartz uses research to conclude that too many choices may overwhelm consumers. Another study, “Offering vs. Choice in 401(k) Plans: Equity Exposure and Number of Funds,” by two Columbia Business School professors, had similar results. It found that “…for every 10 funds an employer adds to its 401(k) plan, the likeliness of participation drops between 1.5 and 2 percent.”

Every year, an estimated 80 percent or more of employers revamp their benefit plans, yet only 20 percent of employees make new elections. You can improve those figures by evaluating your benefits communications and decision support system. After all, your employees need to understand their benefits before they see them as benefits.

Historically, employers have limited discussion of healthcare benefits with employees to before the annual open enrollment period (usually fall to January 1). This minimal contact may cover legal compliance, but it does little else to help improve understanding of benefits and motivate your employees.

Creating a year-round, dynamic conversation between your organization and its employees can enhance employee understanding of their benefit options.

Voluntary Benefits Talking Points

As an employer, you will want to communicate with your employees about the benefits you sponsor, such as your group medical and retirement plans. Here are some strategies for improving your benefits communications:

Set a goal: What do you want your benefit communications to achieve? Set a realistic goal—such as increasing enrollment in your consumer-driven health plan by a certain percent, or increasing understanding of how your health plan’s precertification process works, for example.

Make it measurable: If you set a goal, determine how you’ll measure it. Will you check enrollment figures? Conduct an employee survey? Ask your HR department if they are receiving more or fewer calls with benefit questions?

Make it comprehensive: Your communications should cover any or all of the following:

• Benefit overviews and updates
• Orientation, training and educational programs
• Comparison charts
• Legal updates
• Directory information

Make it available through a number of channels:

• Brochures and leaflets
• Paycheck stuffers
• Presentation materials
• Newsletters
• Emails
• Online.

Special Cautions for Voluntary Programs

When it comes to voluntary programs, employers must be careful. If you create the impression that you sponsor or endorse a voluntary program, this can create obligations under ERISA. ERISA, the Employee Retirement Income Security Act of 1974, sets minimum standards for most pension and health plans in private industry. It creates disclosure and fiduciary responsibilities for plan sponsors. To avoid triggering ERISA responsibilities, you must not endorse voluntary programs, describe them in employee handbooks or recruiting information, print voluntary benefit documents on company stationery, or otherwise promote them.

What can employers do to encourage voluntary benefit enrollment?

One popular option is for employers to work with a professional voluntary benefits agent, who can work closely with the employer to develop an understanding of their benefits objectives, the organization’s approach to communications and the general benefits environment. Among the typical services offered are:

• Enrollment planning. Firms assist with developing communication strategies and enrollment timelines, and identifying resource requirements.
• Benefits communication and education. Conduct group and individual meetings; prepare brochures, summary plan descriptions and employee benefits statements; conduct benefit surveys and develop online resources.
• Enrollment services. Trained enrollers conduct on-site meetings and multi-location enrollments, featuring interactive, consistent benefits presentations. Consultants also conduct meetings for employees, management and even family members and provide data updates and enrollment support as needed for new employees.

Keep in mind also that your voluntary benefits should enhance and complement your employer-sponsored benefits. Look for a broker willing to take the time to learn the details of your plans, concerns and stakeholder needs. Find an experienced broker who will use a research-based approach that will not only improve employee understanding, but can enhance decision-making and promote behavior change.