Health, retirement benefits merging on MassMutual exchange platform

With health care accounting for such a large chunk of retirement savings – a 65-year-old couple retiring this year can expect to spend an estimated $245,000 on health care throughout their retirement, according to a recent estimate from Fidelity – the merging of health benefits and retirement planning on an exchange platform is a trend worth taking note of.

Health care “has drowned out everything,” says Veer Gidwaney, CEO and co-founder of Maxwell Health, a Boston-based benefits technology company that works with employers and brokers. “Health insurance is driving down education and infrastructure. It has caused people to save less [in their] 401(k) and protect their wealth even less than in the past.”

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It makes sense for individuals to look at benefits offerings through a lens of what they can afford to spend. Since the bulk of most people’s paychecks goes to for health insurance, retirement savings or personal savings can end up taking a back seat.

By offering all of these benefits on an exchange, employees can choose the high or low-level health care coverage they want and how much they want to set aside in savings all in one place.

“I think this makes sense. I think this is just the beginning of a much longer term trend. It will go to the simplification of how a consumer views their interaction with benefits. You should be able to pay one price that makes it all happen. Savings, retirement, health care, disability and income guarantees post-retirement,” Gidwaney says. “One package that you pay one price for.”

MassMutual Life Insurance Company is moving in that direction, says Gidwaney, through its recently announced partnership with Maxwell Health. BeneClick! is an online enrollment and benefits platform where people can go to select their employer-sponsored benefits. It integrates MassMutual’s MapMyBenefits tool, which allows employees to prioritize their benefits choices, helping them make the most of each benefit dollar based on where they are in life, their financial goals and personal finances.

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What makes the BeneClick! platform different is that it includes health care coverage, insurance, retirement readiness, voluntary benefits and wellness, says Bill Silvanic, executive vice president of MassMutual Worksite Insurance.

“It empowers them [employees] to take greater control of benefit, retirement and wellness planning,” he says. “The whole idea is holistic benefit guidance and fulfillment.”

Health care costs continue to rise and employees are sharing a good chunk of that burden. This offering gets employees thinking about the full spectrum of benefits they have at their disposal and helps them better prioritize where they want to spend their money, says Silvanic.

“A large percentage of employees want to purchase their benefits and insurance through their employer. This platform brings a holistic view to benefits planning and ultimately the enrollment experience,” he says. “From the employer’s standpoint, it is a great thing to offer these benefits knowing that in addition to it being easy to use, it is something that is going to help provide that financial security that is important to individuals to allow them to be more productive in the workplace.”

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Aon Hewitt's recent 2015 Financial Mindset survey found that 68% of U.S. employees say they regularly save for retirement, though a third does not.

BeneClick! is being introduced through MassMutual’s distribution partners on a limited basis and will be available more broadly starting in mid-2016. Initially, through BeneClick!, MassMutual will offer access to retirement plan enrollment features and life insurance products, and expects to add additional insurance products such as critical illness and accident protection in 2016.

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