Enough time and the right tools are the key ingredients to an effective benefits education plan, according to research from employee benefits provider Unum.
“The key to an effective benefits education is a three-plus-three communication strategy,” said Bill Dalicandro, vice president at Unum. “Allowing at least three weeks to review benefits materials and using at least three communication methods add up to better benefits education.”
The findings come at a time when employers are recognizing that the benefits education they provide their employees is insufficient, industry research reveals.
The third annual study of more than 1,700 employed adults, conducted at the end of the 2010 open enrollment period, found that effective benefits education helps employees make informed choices.
Three (or More) Communication Methods
To meet the various learning styles among employees better, offering at least three methods of communication is a critical part of the benefits education process.
According to the study, 91 percent of employees who were asked to review benefits within the past year had accessed information made available, and 68 percent of the respondents indicated they were most likely to access benefits information when offered through:
• Printed information or brochures.
• Personalized benefits statements.
• Employer-sponsored intranet or website.
Other popular forms of education included e-mail communications from employers, group and one-on-one meetings where benefits were presented and employees could ask questions, and interactive online tools.
However, the study revealed that employee access to printed materials and personal contact methods, such as group meetings to discuss benefits, remained significantly lower than 2008 levels.
Three Weeks or More
“Equally important as offering employees sufficient benefits education tools is giving them three weeks or more to review their benefits choices and information before making a decision,” Dalicandro said.
The research showed that 97 percent of employees who had three-plus weeks to review their benefits education materials said it was enough time—but just 50 percent of respondents were given that much time.
Those who had three or more weeks to enroll were more likely to rate their benefits and their benefits education as excellent or very good, compared to those with less than three weeks to enroll.
Even if employers don’t offer a particularly good benefits package, it pays off when they build an effective benefits education strategy:
• 85 percent of employees with an excellent/very good benefits education rated their benefits package as excellent or very good.
• 80 percent of employees who rated their benefits education highly also rated the employer as an excellent/very good place to work.
“When employees have adequate time and the right tools to understand and choose their benefits, the payoff is powerful,” Dalicandro said. “The research shows that employees with an effective benefits education have higher levels of engagement, morale and loyalty.”
Flexible Spending Accounts Underused
An upcoming $2,500 limit on the contribution amount for medical flexible spending accounts (FSAs) in the U.S., starting in 2013, likely won’t impact many employees, according to results from the American Payroll Association's Getting Paid in America survey.
The September 2011 survey showed that only 12 percent of employees contribute $2,500 or more to their company’s FSA. Workers on average paid $4,129 toward the cost of family health coverage in 2011, according to the 2011 Employer Health Benefits Survey from the Kaiser Family Foundation and the Health Research & Educational Trust.
“Employees and employers alike can take advantage of medical FSAs to manage costs without forgoing quality coverage and care,” said Kevin Hill, Paychex vice president of insurance sales and operations. “FSAs allow employees to reduce their taxable income and increase take-home pay for qualified medical expenses. Employers also receive a reduction in their payroll taxes based on their employees’ contributions.”
More than 29,000 employees responded to the survey, which asked, "Did you contribute more than $2,500 last year to your medical Flexible Spending Account?” Among the responses:
• 12 percent indicated they contributed at least $2,500.
• 39 contributed to an FSA but less than $2,500.
• 46 percent didn’t participate in an FSA.
“While health care costs are a big concern for employees and their families, the survey results clearly show they aren’t taking full advantage of FSA plans,” said Dan Maddux, executive director of the American Payroll Association. “Employers should encourage employees to take advantage of these and other pretax, voluntary payroll deductions to ease the burden of these anticipated expenses.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Employees Make Avoidable Benefits Mistakes, SHRM Online Benefits Discipline, September 2011
Gen Y: Employers Get Low Marks for Benefits Communications, SHRM Online Benefits Discipline, September 2011
Open Enrollment: A Chance to Boost Employee Morale, SHRM Online Benefits Discipline, September 2011
Five Tips for Open Enrollment Communications, SHRM Online Benefits Discipline, August 2011
Most U.S. Employers Opt for 'Passive' Open Enrollment, SHRM Online Benefits Discipline, August 2011
Benefits Statements Can Spotlight Hidden Value, SHRM Online Benefits Discipline, April 2011
Communicating Your Benefits Value Calculus, SHRM Online Benefits Discipline, April 2009
Tips for Upgrading Your Total Rewards Communications, SHRM Online Benefits Discipline, January 2008
SHRM Online Benefits DisciplineSHRM Online Retirement Plans Resource Page