Employer Clarity, Employee Confusion
The case for better employee benefits communications
A recent study of employee benefit communications conducted by Waltham-based Alegeus Technologies underscores the lack of understanding by employees of the benefits offered by their employers. The study points to a level of employee confusion that undermines their ability to make informed decisions. Instead of analyzing their benefit plan choices and making informed decisions, employees frequently just automatically accept last year’s plan when a more cost-effective one may be available, fail to take advantage of voluntary option or supplemental plans, or not take full advantage of benefit saving plans such as an FSA.
According to the Alegeus 2014 Consumer & Employer Healthcare Benefits Survey, only 30% of HSA account holders passed a basic HSA proficiency quiz. FSA account holders fared somewhat better, with 50% passing a similar test. Part of this failure can be placed squarely on the shoulders of employers. According to the report, 65% speak to employees about health benefit enrollment only during the open enrollment period, and 60% rely only on the summary documents and enrollment forms to communicate benefit options. Only a third of employers offer interactive tools such as plan comparison calculators.
Possibly the most troubling revelation is the difference between employers’ and employees’ assessment of their efforts. Employers frequently judged the quality of their communication 20% higher than employees.
Why does it matter and why should employers take steps to rectify the situation? There seems to be a strong correlation between employee satisfaction with benefits and their general satisfaction with their employer, as revealed in MetLife’s 12th Annual U.S. Employee Benefit Trends Study. Seventy-seven percent of workers who rated their benefits package as excellent or very good rate their employer as an excellent or very good place to work. Conversely, only 17% of employees who consider their benefit package to be fair or poor rated their workplace as excellent or very good. Additionally, 79% of workers who rated the education about their benefits excellent or very good rated their employer likewise. On the other hand, only 30% who said the education was fair or poor held a high opinion of their employer.
There is a need for employers to help employees understand not only how the various aspects of their benefit packages work but also how to better use this information to attain their health goals. Employee benefit communication is one of many topics that will be covered at CBIA’s upcoming Compensation and Benefits Conference on November 4, 2014, in Cromwell.
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