Tech-Based Communications Provide Open Enrollment Boost

More are turning to online resources for benefits information

By Stephen Miller February 9, 2011

U.S. employers increased their use of technology-based communications with workers during the fall 2010 open enrollment benefits season, according to a survey by consultancy Towers Watson. In addition, the survey found that helping employees understand new plan features was employers’ greatest open enrollment challenge.

The firm's 2011 Annual Enrollment Flash Survey revealed that:

  • 84 percent of employers used e-mails to communicate benefits choices in 2010, up from 76 percent in 2009.
  • One-third (33 percent) used podcasts, web-based videos or online chatsto communicate enrollment information in 2010, an increase from 27 percent in 2009.

High-Tech and High-Touch

The growth in high-tech communications hasn't stymied high-touch approaches, however. The percentage of companies holding face-to-face meetings with employees increased from 53 percent in 2009 to 60 percent in 2010, while conversations with HR increased from 50 percent to 58 percent.

The survey, conducted in December 2010 among U.S. employers, found that the days of paper-based benefits enrollment are dwindling. Less than one in 10 employers (9 percent) reported using paper-based enrollment in 2010, a decline from 14 percent in 2009.

The days of paper-based benefits enrollment are dwindling.

“With health benefit costs continuing to increase and benefit plans and choices becoming more complex, communicating with employees has never been more important,” said Jeri Stepman, national practice leader for health and welfare outsourcing at Towers Watson. “Employers are taking advantage of both the technology and decision support tools available to them to make the open enrollment process as efficient as possible. At the same time, they are arming their employees with information needed to make educated decisions about their benefits for the coming year.”

Top Open Enrollment Challenges

Employers said their greatest challenge during the fall 2010 open enrollment season was:

  • Employee understanding of new plan features(cited by 32 percent of employers).
  • Handling an increased number of service center calls(29 percent).
  • Explaining price changes (26 percent).

To meet these challenges, nearly two-thirds of respondents plan to increase their communication efforts with employees, while nearly one-half (47 percent) plan to make a change to their health plan design, the survey found. In addition, 44 percent plan to provide more self-service capabilities to employees.

“Increasing support and communication to employees at open enrollment will remain a high priority this year, particularly when it comes to health care benefits,” said Randall Abbott, senior health and group benefits consultant at Towers Watson. “As more employers embrace wellness programs tied to financial incentives, for example, effectively communicating wellness information and available resources at enrollment will be a necessity. And since enrollment is a time when employees are more engaged in health decisions, it only makes sense to use the enrollment time to promote the wellness resources and decision support tools.”

Gen Y Workers Increasingly Benefits-Savvy

From 2008 to 2010, the youngest generation in the U.S. workforce became more engaged in learning about their benefits, according to studies of Gen Y.

“Members of this generation are entering the workforce and building careers during a time of economic uncertainty and intense debate over health care reform,” said Barbara Nash, vice president of corporate research at employee benefits firm Unum, which sponsored the studies. “They’re clearly taking an increased interest in how they can build and protect their financial lives.”

The studies, conducted in August 2008 and August 2010 among employed Americans ages 18 to 32, found that:

  • The percentage of Gen Y employees who said they are extremely/very familiar with life insurance jumped from 31 percent to 44 percent.
  • The percentage who said they are extremely/very familiar with retirement accountsgrew from 31 percent to 43 percent.
  • The percentage who said they are extremely/very familiar with disability insuranceincreased from 16 percent to 24 percent.

Turning to Online Information

The workplace continues to be their most reliable source for benefits information, with 68 percent of Gen Y employees citing it as a top resource. But they were more likely to seek out information about financial protection benefits online in 2010 than they were just two years earlier, the studies showed. In addition:

  • The percentage who use insurance company websitesto learn about benefits providers grew from 32 percent in 2008 to 44 percent in 2010.
  • The percentage who visit consumer advice websitesgrew from 21 percent to 27 percent.
  • The percentage who participate in online forums or blogsincreased from 7 percent to 12 percent.

As their use of online resources grew, Gen Y’s reliance on family and friends as a source of benefits information diminished:

  • From 2008 to 2010, the percentage who said they rely on parents for benefits informationfell from 60 percent to 42 percent.
  • The percentage who cite friends as a resource for benefits guidancedropped from 30 percent to 21 percent.

In addition, the studies showed that the scope of a provider’s benefits is an increasingly important element for Gen Y when they’re choosing a carrier. In 2010, 55 percent said scope was an important selection factor, up from 44 percent in 2008.

“This generation of workers is a large and influential group coming of age at a time when the benefits landscape is changing quickly,” Nash said. “Understanding what drives their decision-making and how we can meet their benefits needs on their terms is critical.”

Gen Y numbers about 75 million in the U.S.—nearly the size of the 80-million-strong Baby Boomer generation.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

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