October marks the start of open enrollment season for many American workers — their annual opportunity to reconsider and re-elect the benefits made available by their employers. “The Growing Importance of the Workplace,” the first in a series of research briefs stemming from Prudential's Sixth Annual Study of Employee Benefits, found that 80% of workers believe the workplace is an important source for personal insurance and savings products.
Americans are signing up for benefits such as life insurance (83%), disability insurance (66%) and long-term care insurance (21%), the study showed.
"It's important that people take time to make informed choices. They should talk to a financial professional or to their partner about their long-term financial needs before making their benefits selections, or take advantage of online tools and calculators to help determine their needs," says Lori High, president of Prudential Group Insurance.
In current tough economic times, consumers are juggling immediate priorities and expenses, but spending little time or effort considering decisions that may significantly affect their financial security. High says, "Just last year, our benefits study illustrated how many Americans intuitively know the importance of selecting their benefits, yet an overwhelming 68% said they make little or no effort in choosing their benefits each year."
With employee contributions for health care rising, it is not surprising that according to the research, employees spend the most time focused on health care benefits when enrolling. Although this is critical, employees need to equally focus on securing an appropriate level of protection against the significant financial impact of disability or the need for long-term care. Underscoring the likelihood of needing disability coverage, in 2010 the Council for Disability Awareness noted three in 10 Americans entering the workforce today will become disabled before they retire.
Employers play a critical role in helping employees navigate their benefits options and assess what products and plans are the best fit for their personal situation. "The choices Americans will be making over the coming months matter, so companies need to make every effort to ensure that employees are as informed as possible," says High.
The research shows the various communications about benefits choices include primarily email at the workplace (65%), followed by group meetings during the work day (56%) and mail received at home (52%). These three methods are also the most preferred by employees, named by 55%, 49% and 39% of plan participants, respectively.
"To reduce information overload, determining the most effective method of communicating with employees is essential," High explains. "Employers can offer their employees the best benefits packages, but they also need to engage employees, so that their benefits offerings can be appreciated, and employees and their families can fully realize the value of the benefits available to them."
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