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As costs shift to workers, help them choose the most appropriate options
Employers are increasingly likely to offer voluntary benefits to help workers meet their financial needs and fill gaps in coverage, according to two benefits professionals who reviewed the hottest voluntary benefits for 2014 in a recent webinar. But as the costs of benefits shift to workers, employers have an obligation to help employees choose the best benefits.
“Ancillary benefits will be a greater differentiator [in 2014], more than ever before,” commented Thomas Mangan, CEO of United Benefit Advisors, during the Nov. 19, 2013, webinar sponsored by Sun Life Financial and hosted by Employee Benefit Adviser. The trend toward voluntary benefits is being driven largely by the growth in high-deductible health plans and the resulting need for employees to cover health care expenses and protect their assets. “The more you have these large deductibles, the more you have to fill in the gaps,” said Mangan.
A range of ancillary employee benefits (both voluntary and employer paid) are fairly common in many benefit packages, according to a 2013 survey of employers by United Benefit Advisors. These include:
For companies mulling changes to their benefits packages, Mangan identified several benefits that few organizations offer but that could prove attractive to employees, including:
Dale Alexander, president of insurance brokerage Alexander & Co., pointed to other trending benefits:
A larger menu of benefits for employees to choose from means more responsibility for employers. “I think the enrollment experience for the employee has to improve,” Alexander said. “Now you’re going to have to teach how products work”—how they will affect the financial lives of employees’ families, and, therefore, protect them from risks.
But that can be a tricky endeavor, Alexander pointed out, because most employees don’t really want more education. “You can’t cram it down their throat,” Mangan commented. And employees aren’t likely to remember plan details, anyway.
Instead, “Most people just want to know they’re doing the right thing.” To do that, focus first on desired employee outcomes, and then design benefits and enrollment accordingly.
Sometimes benefits professionals tend to look at the product first and just let the outcome happen. But the question should be, what do you want employees to focus on?
What if, Alexander said, you could put the best options into benefit plans and make those options the easiest ones for employees to choose? The design of the corporate 401(k), for example, drives successful outcomes, he said. The best 401(k) plans automatically enroll participants, set default contribution and escalation rates, and reallocate assets as participants age. “Make the easiest option very evident that that’s what they need to do,” Alexander emphasized.
“Be careful detaching from open enrollment,” he cautioned. “Stay involved with the enrollment. Manage the process. Define what is acceptable—because it is about employee outcomes first.”
John Scorza is the associate editor for HR Magazine
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