As open enrollment season for 2010 comes into full swing, experts are encouraging workers to pay close attention to benefit elections that can help to offset financial challenges brought on by the recession. A survey of more than 2,900 U.S. hiring managers and more than 4,000 workers, conducted on behalf of online recruitment firm CareerBuilder in September 2009, shows that:
• One-in-four workers say they don’t pay attention to benefit changes, figuring that the same benefits will roll over from the previous year or feeling that the whole process is too confusing.
• Some 15 percent of hiring managers estimate more than 10 percent of their employees miss annual open-enrollment deadlines each year on average.
What Employees Stand to Lose
HR managers warn that failing to participate in open enrollment can have negative consequences on one’s pocketbook:
• One-third (34 percent) of HR managers said missing open enrollment costs their employees, on average, at least $500 in out-of-pocket expenses.
• 20 percent reported that it costs employees more than $1,000.
• 10 percent reported it costs employees more than $2,500.
What They Might Not Know
One of the biggest obstacles in securing participation is employees' lack of knowledge of certain offerings. When asked to identify which benefits workers typically don’t realize their companies provide, HR managers pointed to the following:
• Wellness benefits—cited by 45 percent of HR managers.
• Flexible health care spending accounts (FSAs)—43 percent.
• Tuition reimbursement—38 percent.
• Banking programs—25 percent.
• Discounts on personal entertainment—24 percent.
• Discounts on technology for personal use—22 percent.
• Discounts on travel for personal use (rental cars, airplane tickets)—20 percent.
• Transit programs—10 percent.
• Help with child care—10 percent.
In addition, 31 percent of workers reported that they don’t know their company’s policy for updating benefits because of life-changing events such as marriage or the birth of a child.
“Workers who aren't maximizing their benefit potential are literally giving away free money every year,” says Rosemary Haefner, vice president of HR at CareerBuilder. “In today’s economic environment, it’s even more critical that employees make sure they are not missing out on benefit opportunities that can help them better manage personal expenses for themselves and their families.”
To help them make the most of their benefits dollars, Haefner offers the following tips that HR can communicate to employees:
• Schedule time on your calendar—Set aside time to review benefit options. Make sure to schedule this review early in the process so you’re not rushing to make a decision an hour before the deadline.
• Leverage pre-tax dollars—In addition to setting aside pre-tax dollars for retirement through your 401(k), look at how those dollars can be applied to the near future. FSAs can help offset rising health care costs by putting aside pre-tax money for medical expenses that are not covered by insurance. Also, set aside pre-tax dollars to offset commuting costs through company transit programs, if available.
• Compare plans—Work with your HR representative to compare current coverage to coverage offered through your spouse’s or significant other’s employer. It might make better financial sense to have the whole family covered under one plan. Remember to look for quality, not the cheapest option.
• Don’t miss out on perks—Your employer might have discount programs for stores, technology, entertainment, personal travel, concierge service, dry-cleaning and the like. If your employer offers a wellness benefit, see if you can apply that to gym memberships, smoking cessation programs, acupuncture and more. Talk to HR and check out your company's intranet.
Stephen Miller is an online editor/manager for SHRM.
Six Benefit Trends for 2010, SHRM Online Benefits Discipline, September 2009
Open Enrollment for 2010 Will Be Different, SHRM Online Benefits Discipline, September 2009
Pointers Can Help Workers Make Informed Benefits Choices, SHRM Online Benefits Discipline, September 2009
How to Develop an Effective Benefits Communication Strategy, SHRM Online Benefits Discipline, September 2009
SHRM Online Benefits Discipline