How to ease the confusion of health and benefits administration.
By Ken Haderer
Empowered, engaged employees have the sensibility to leverage the opportunities that their organizations offer for fully engaged careers. Although not often thought of first, one of those opportunities is health, wellness, and wealth benefits.
So what exactly are the key attributes of empowered and engaged employees? For starters, they must be confident with a rich understanding of their benefits and how to use them to become smarter investors for retirement. Next, they must be capable of managing and maximizing their benefits to drive the most informed decisions. They also must be in control and take responsibility for their wellness and retirement readiness.
But to achieve that level of empowerment, employees need the right strategies, and it’s up to benefits administrative providers to make sure a strategic framework is in place. I think of it as a live, work, and retire well strategy, one built around targeted communications, innovative self-service tools, and expert education. Through regular use, employees grow in confidence, become capable benefits consumers, and make the smart choices for health and retirement readiness.
So how do we improve the employee experience, especiallyâ¨for a first-time health and benefits (H&B) administration outsourcing client? The solution calls for combining and streamlining H&B administration for all locations, and rolling out a self-service technology for open enrollment and life event requests. But that must be paired with a multimedia employee communications campaign not only about open enrollment, but also about the changeover to an outsourced solution and how the employee experience will be enhanced through a robust benefits website and highly trained contact center representatives focused on H&B plans. As a result, workers can become better consumers of their health benefits, capable of making informed decisions that don’t over-insure or under- insure based on their needs.
Administrative providers who can seamlessly deliver the right solutions for these complex challenges will help generate the confidence, capability, and control of truly empowered employees. Yet engagement needs to extend beyond just health and benefits. According to the most recent Mercer Workplace Survey, planning for retirement still remains a primary concern for employees, with higher contributions to their 401(k)s on the rise. For all workers, the mean expected contribution was up about 7 percent over the previous year’s survey, to just under $8,000. And, for retirement plan administrators, meeting the demand for greater retirement readiness means offering the flexibility to accommodate a variety of plan types and designs.
Take company match programs, for example, where many companies offer multiple match formulas for 401(k) and other DC plans, based on employee status —such as 100 percent match for contributions up to 4 percent of eligible pay, and 50 percent match up to 6 percent of pay. The goal should be to increase employee awareness and appreciation of the company match and motivate participants to increase their contribution rates to qualify for the maximum match.
One outsourced solution is to generate a highly customized, company-branded communication campaign, providing participants with a personalized retirement report that compares their current before-tax contribution rate to the rate needed to maximize the company match. Hypothetical retirement plan account balances at age 65 are based on a participant’s current age, contribution rate, and hypothetical rate of return.
Combined with easy multimedia and self-service options for enrollment and contribution rate changes—by mail, online, or through a call center—this approach will result in higher contribution levels, as we’ve seen in our own client work. And that spells, again, truly empowered employees on the road to retiring well, with adequate resources when they get there.
An example of an empowering employee education program is a company website built around the key numbers associated with retirement savings to deliver concise, actionable information to help employees get on track to meet their retirement savings goals. Some self-service portals offer game-like interactivity to engage employees while delivering helpful retirement saving insights. In the process, employees are encouraged to explore and learn more about individual investing topics.
When administrators combine the best and most inclusive modes of communication with the most engaging and effective tools, the outcome will be closer to the ideal we all hopeâ¨for. We can make a difference for generations of productive employees, a workforce with a positive outlook about the future and, more importantly, the power to make that future a reality — confidently, capably, and in control.
Ken Haderer is Mercer’s U.S. benefits administration leader based in Norwood, Mass.