HR can provide tools and reminders to employees to maximize their benefits.
Failure to meet the needs and expectations of employees and former employees leads directly to greater “noise in the system,” lost productivity due to off-the-job handling of HR and benefits issues, and a strong undercurrent of grumbling dissatisfaction that bubbles away until the inevitable eruption.
Further changes in the plan landscape mean greater involvement of and demands on employees and former employees to manage their health and wealth benefits. Some key trends and factors to keep in mind:
- Among large employers, between 60 and 80 percent (depending on your definition of ”large”) will offer a consumer-driven healthcare option this year. Many employers are taking the full plunge this year by either mandating consumer-driven options or functionally mandating them through relative pricing of benefit plans.
- Medicare-eligible retirees and dependents are facing their first year of decisions regarding the new Medicare drug coverage options and coordination of Medicare Part D with employer and group plans.
- According to recent estimates, as many as 40 percent of large employers still offering defined benefit plans have now converted to hybrid plans, frozen participation in their plans, curtailed accruals, or imposed some combination of the above. Declining participation rates mean ever greater emphasis on employee-directed and -invested retirement-wealth accumulation vehicles.
- Recently issued regulations governing non-qualified plan elections mean that highly paid employees have to make meaningful, long-term elections regarding the distribution of nonqualified plan benefits far before they will become payable. Changes to these elections later in their careers may be impossible or have adverse personal tax consequences.
So what help can we offer participating employees who must navigate these changing waters? Consider the following:
- Provide intuitive, easy–to-use technology for required transactions. Make portals and web sites intuitive and confidence-inspiring for employees. Use a life-event focus to remind employees of all the transactions they may need to execute to deal with their current circumstances. Avoid jargon and benefits lingo, increase hints, and offer up related educational resources at the appropriate times.
- Use e-mail, targeted communications, or even outbound calls to remind employees of approaching deadlines or potential issues with their coverage or benefits.
- Integrate your service delivery—even if multiple providers are involved. Ensure that data across providers remain synchronized. Provide deep links between websites of various providers. Consider consolidation approaches such as total wealth statements online.The goal should be to bring data together in real-time for a better employee experience.
- Increase the use of advisory tools. Offer web-based, provider-quality assessments based on outcomes and costs in all programs, especially in consumer-driven programs (where the money spent truly belongs to the employees doing the consuming). Ensure that employees know how to access negotiated rates and discounts for their medical care.
- Include medical financial-modeling tools in employees’ health plan enrollment applications. These enable employees to compare the likely costs of various coverage and HSA elections under various medical-demandlevels. They have become the norm in consumer-driven plan election periods. Ensure that employees know how to access and use these tools at annual enrollment and through the year.
- Provide multi-level financial planning and wealth management services to employees in defined contribution and hybrid retirement arrangements. Offer advice, wealth monitoring, and planning tools to employees interested (and willing to finance them). Offer self-service calculators and modelers toall employees.
In summary, with employers transforming their benefit programs from the paternalism of the 20th century to the defined contribution models we see today, greater risks and some costs and rewards are shifted from employers to employees. One thing that providers, employers, and participants can agree on is that it is now more important than ever that the money spent on these plans is spent wisely. Making this happen is the challenge we will all face going into the new year.