It seems as though we just got through last year’s open enrollment season, and the time has come to begin planning for 2017. Oh, and did I mention that minor event called 1095 reporting? For benefits professionals, the calendar is increasingly crowded with “must-do” events that threaten to undermine efforts to increase the overall effectiveness of the benefits program.
In many organizations, one of the first casualties is a well-thought-out and executed benefit delivery plan. Consultants, employers and carrier representatives spend months devising a benefits strategy designed to balance cost, compliance and employee retention. These initiatives require significant effort and often lead to final decisions happening just days before the start of open enrollment. Many employers simply run out of time to design a benefit delivery plan that is matched to their benefits strategy. Here are four reasons all benefits professionals should shift their emphasis toward benefit delivery planning earlier in this year’s renewal cycle.
1. When a ship misses the harbor, rarely is it the harbor’s fault. Employees’ lack of benefit literacy has been well documented. It is also universally understood that employees spend very little time making this very important set of decisions every year. But employees aren’t incapable of grasping benefits – they’re just not engaged, and attempts to educate them on the finer points of insurance plans have universally failed. All employees are consumers. This is true at all rungs on the socioeconomic ladder. The providers of consumer goods and services simply cannot afford to ignore a consumer population that is illiterate or unengaged in terms of their product. They invest significant resources in messaging and technology designed to engage the consumer. They have “genius bars,” websites that make recommendations for “people like you” and “one-click” checkout.
2. When employees make bad decisions, everyone loses. Financial wellness (or the lack thereof) has a direct impact on employee productivity. Not enrolling in the proper plans leads to employee financial distress, which translates into management problems. Increasingly, employers are also discovering that poor enrollment decisions can actually undermine efforts to control plan costs. In the case of health plans, there is a “Goldilocks Principle” in terms of plan distribution. Too little enrollment in consumer-driven plans contributes to excess utilization and high costs. However, too high enrollment in CDHPs may undermine contribution strategies designed to give employees meaningful choices for high and low priced options. Low enrollment in ancillary and supplemental coverages may lead to high prices, undermining the value proposition for these plans in the future.
3. Compliance requires communication. The Affordable Care Act has established new rules about who must be offered coverage, what must be offered and how much employers can charge for that coverage. An employer’s compliance with these mandates affects their exposure to penalties, but also impacts alternatives available to their employees. We are seeing increased instances of employees being subject to penalties for either not having insurance or enrolling in subsidized coverage to which they were not entitled. While “nobody told me” and “I didn’t know that” are not valid excuses, these situations inevitably lead to employee dissatisfaction and declining productivity.
4. One size definitely doesn’t fit all. We live in a world of nearly full employment, and the desire to attract and retain all types of employees has never been more important. At the same time, employee diversity is increasingly evident in all types of workplaces. Boomers, Generations X and Y and millennials all make decisions (and want to be communicated to) differently. Savvy marketers know that it is nearly impossible to create one message and approach to meet all these populations. As a result, you see focused messages and a commitment to “omni-channel” across all consumer markets.
Benefits are complex and costly. The future will bring more of the same. A well-thought-out benefits strategy is critical to a successful program. But it has been said that “strategy without execution is hallucination.” In the world of employee benefits, we can no longer afford to leave benefit delivery to chance. This year, invest as much time in benefit delivery as you do in benefits strategy and you will see better results, happier employees and increase your understanding of where you should take your strategy in the future.
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