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Pointers Can Help Workers Make Informed Benefits Choices
Most employees plan to keep or increase selected benefits for 2010

By Stephen Miller  9/9/2009
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Nearly 9 in 10 U.S. employees plan to maintain or increase the number of benefits they select and/or their coverage for 2010 — despite the fact that more than one-third (37 percent) said their household’s discretionary income fell in 2009. Only 11 percent of workers plan to decrease their 2010 benefits coverage.

The poll of 1,000 full-time U.S. employees was conducted in late July 2009 on behalf of MetLife, a provider of insurance benefits.

“As we approach the fall open enrollment [for 2010], employee benefits appear to be ‘recession-resistant,’ even though quite a few employees are feeling the economic pinch,” said Ronald Leopold, vice president for MetLife’s U.S. Business, commenting on the findings. “Recent economic events have caused many to be more mindful and appreciative of the benefits provided to them at work, which often form the foundation of their personal safety nets.”

Family-Friendly Communication Needed

According to the poll, effective communication makes a notable difference in employee engagement in their benefits decisions. Of employees who say they’ll spend more time making benefits decisions during open enrollment for 2010, 29 percent say their employer has been communicating more about the importance of employee benefits.

“Employer communications regarding benefits need to be targeted in a way that encourages dialogue and address all family members, since half of employees share the benefits decision-making with their spouse or domestic partner,” Leopold said.

Tips for Employers

Leopold recommends several steps to help employees make better informed decisions. These include:

Total Compensation Statements. Distribute personalized, clear and understandable Total Compensation Statements, which communicate to employees the value of their total compensation and benefits. Less than half (43 percent) of employers provide a Total Compensation Statement, according to the 2009 MetLife Study of Employee Benefits Trends.

Decision-support tools. Provide tools such as webbased calculators, which remain the top unsatisfied employee request, to advise employees on which benefits to select and proper coverage levels. Many can be found free-of-charge on the Internet or through most benefits providers. For example, MetLife’s Employee Benefits Simplifier is a free online tool that helps workers identify which benefits are right for “people like them,” and offers suggested actionable life-stage recommendations — particularly when it comes to coverage levels and benefits selection.

Personalized materials. Target information based on employee life stage and life events (e.g., getting married, having a child, buying a home). Employees are more responsive to customized advice.

Multiple communication channels. Recognize that a diverse workforce will have people that want to receive information in different ways. This includes a mix of communication channels such as on-site educational programs, telephonic consultation services and online decision-support tools.

Off-cycle enrollment. Over one-third of employees (38 percent) would be interested in learning about and modifying their benefits choices more frequently than once a year, in particular those that are planning on spending more time on their benefits decisions (64 percent). One solution is an off-cycle enrollment period with a focused enrollment on one single benefit. This could result in higher enrollment rates, and greater employee benefits satisfaction and confidence in open-enrollment decisions.

Tips for Employees

Looking back at open enrollment for 2009, 15 percent of surveyed employees felt they made some wrong decisions on the employee benefits they selected. To avoid such missteps, Leopold recommends advising workers with the following pointers about making benefits choices:

Take time to do your homework. Make sure you thoroughly research which employee benefits are right for you. The benefits you select for the coming year can have a significant impact on your family's finances, so be sure to spend enough time to research and select your benefits.

Read the proverbial "big envelope," use online tools. When employees understand their benefits, they make better choices and tend to be more satisfied by and confident in the open-enrollment process. Therefore, it's important for you to read your company's open-enrollment materials from cover-to-cover. Take advantage of web-based calculators and tools.

Consider making some changes each year. Very few people have the same benefits needs year after year. The annual open-enrollment period is an opportunity to re-evaluate your options and make changes. Make sure you consider changes or coverage increases, particularly if you've experienced a recent life event, such as getting married, having a baby or purchasing a home.

Don’t assume that a challenging economy means you’ll have fewer benefits choices. Most employers are planning to maintain — and some are even planning to expand — the breadth of their benefits offerings, especially when it comes to voluntary benefits. Voluntary benefits are paid for by the employee, typically at a significant cost savings due to group rates. Aging parents? Think about long-term care insurance. Sole breadwinner? Consider disability insurance. Buying a home? Access a legal services plan. New apartment? Don’t forget renter’s insurance.

Explore the advantage of pre-tax accounts. If your employer offers a flexible spending account for health care, vision and dental out-of-pocket expenses, consider that pre-tax savings can reduce your taxable income.

Stephen Miller is an online editor/manager for SHRM.

Related Articles:

Open Enrollment for 2010 Will Be Different, SHRM Online Benefits Discipline, September 2009

How to Develop an Effective Benefits Communication Strategy, SHRM Online Benefits Discipline, September 2009

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