How technology decodes the impact of benefit plan decisions

Andrew Brickman

Before I started my employee benefits career, my wife and I would passively enroll in the same medical plans year in and year out. We were never curious about other plan options that each of our employers offered, and despite the rising contributions we had to pay, we always stayed put.

I switched jobs and took a closer look at both of our group employee benefits programs. I was stunned with what I found. I discovered a medical plan that all of our doctors participated in… for $2,300 less a year! I also uncovered a very affordable group term life plan. An evaluation of my wife’s benefits revealed a fully paid, long-term disability plan that she was automatically enrolled in, which made the extra LTD policy we thought about buying no longer necessary.

Why did my wife’s current employer and my previous employer do such a poor job of educating us about the great benefits they offered? Apparently, we weren’t alone. A majority of people who receive their benefits in the workplace are not adequately educated about their plans. A recent report by Colonial Lifei revealed that only 23% of employees think their employers communicate benefits effectively; 9% said the benefits communication they receive is not at all effective.

Those of us who help employers develop and deploy employee benefits administration strategies fully appreciate the thought, expense, and care that go into the design of these plans. Every change in deductible, co-pay, etc., has detailed data and a logic behind it. Most employers try to provide the best benefits they can afford in order to attract and retain quality employees and provide health and financial protections for their workforce. While it’s true that much care and thought goes into planning of benefits, too often not enough thought goes into the communication of those programs.

Benefits administration technology can be one component of a multi-faceted employee education and communications strategy. Technology will never replace human interactions, such as the one-on-one new hire orientation, or open enrollment meetings, but the right kind of platform can be an effective tool to reinforce benefits messaging, help employees make smarter decisions, and communicate the overall value of your benefit programs.

Technology should provide the ability to communicate targeted messages to employees in the following ways:

  • Interactive storyboard that explains otherwise hard-to-grasp benefits concepts and improve engagement.
  • Videos that can be customized to disseminate corporate messages, highlight major changes to benefits, or push initiatives such as wellness and disease management.
  • Sophisticated decision support tools that help employees identify the plans that best suit their lifestyle, risk tolerance and behaviors.
  • Paycheck modeling to help employees understand the impact of plan elections on take-home pay.

As employers look to better control overall benefit costs, the defined-contribution private exchange/marketplace model is also gaining traction. This alternative benefits delivery system must incorporate a robust decision support tool to help employees narrow down dozens of benefit options into a few choices that make sense for them. In essence, they take the dollars you allocate toward their benefits and create a custom package. A good decision support tool will guide them in the right direction and helps them become smarter benefits consumers.

Whether you deliver employee benefits through the typical group model or a private exchange, technology is a cost-effective means to communicate the total value of the program you provide. Hidden paycheck calculators, or even an on-line total compensation statement, give employees a clear window into the actual amount of wage and benefits package. Videos and decision support tools can take engagement a step further and drive home the value message.

Benefits enrollment technology can help your employees maximize the benefits you offer and give them a true appreciation for their overall compensation package. If you don’t use technology to drive smarter decisions and better educate employees, you are missing out on an effective way to empower your plan participants and drive benefits administration efficiencies.

One last thought: Now that most of the major provisions of the Affordable Care Act are in play, employee benefits will be even more complicated to administer and communicate. Employee benefits compliance is another mine field, and benefits administration technology addresses that too. The bottom line is that technology provides critical support to all stakeholders.

iColonial Life-Harris Interactive survey, 2013

 


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©2015 Corporate Synergies Group, LLC. No part of this material may be republished or distributed without prior written consent.