Commentary: Millennials don’t really care about their workplace benefits, so don’t worry about engaging them in your upcoming benefits enrollment.
Whoa, stop right there! I hope you’re not one of the misguided few — well, misguided many, unfortunately — who buy into this fallacy.
The fact is your younger workers place the same value on the same benefits as your older workers. Yet research shows there’s a huge discrepancy between what this large-and-growing workplace group wants — and what their employers thinkthey want.
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A LIMRA study1 asked employers how much they think benefits are valued by their younger and older workers. Overwhelmingly, employers said workers 40 and older place two to three times as much importance on benefits as employees under 40. This employer perception applied to benefits across the board, including medical, dental, disability, life, vision, critical illness, cancer and accident insurance.
For example, employers said 92% of older workers think medical insurance is important and only 42% of younger workers do. For short-term disability insurance, the perception was 57% of older workers value it vs. 23% of younger workers. For life insurance, the employers said 61% of older workers think it’s important, compared with only 17% of younger workers.
How off-base is this thinking? Tremendously. In fact, when workers are asked to rank the importance of their top benefits, age makes virtually no difference. A recent Employee Benefit Research Institute survey2 showed employees prioritize benefits in the same manner. Health insurance, retirement plans and life insurance rank at the top for both younger and older workers.
What this means for enrollment
First, acknowledge the benefits you offer are very important to your millennial employees. It may be what attracted them to your company in the first place, and it certainly can help keep them there. So make sure you understand millennials’ benefits education and enrollment preferences to be sure you’re engaging them.
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And second, be aware many younger workers face significant financial challenges. They have record levels of student loan debt, lower income and wealth than previous generations at the same age, and work in a sluggish economy where median household income hasn’t risen much in the past 15 years.3 So while they value having benefits, they’re likely to have less available income to pay for them. In today’s cost-shifting benefits environment, this can negatively affect satisfaction with the benefits package among younger employees.
You can help make your benefits enrollment a success for your millennial employees by looking carefully at what you offer and how you communicate it.
Create an affordable package without sacrificing security
Today’s higher-deductible health plans may be especially attractive to younger workers: the premiums are lower, and these employees tend to view themselves as more “bullet proof” than older workers. However, these plans can leave employees vulnerable to considerable financial risk. Offer voluntary insurance options to help employees bridge the potential out-of-pocket gap in an affordable, convenient way.
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Voluntary insurance also allows you to offer the variety of benefits choices younger (and older) workers value, so employees can select those that best meet their individual needs.
In addition to gaining some financial peace of mind when the economy is tight, millennials appreciate voluntary benefits for other reasons:
- Flexibility in using claims payments. There are no restrictions on how they can use claims payments: helping pay for transportation to the hospital, lodging and child care during a family member’s treatment; or paying for deductibles, co-payments, coinsurance and other non-covered costs.
- Portability. Gen Y employees who purchase individual policies can keep coverage if they leave the company, as long as they continue to pay the premiums. Voluntary insurance can fill a gap in this situation.
- More lenient underwriting. Underwriting criteria through voluntary programs are typically more lenient than those of an individual plan purchased on the open market.
- Stable premiums. Premiums for voluntary insurance won’t go up simply because an employee no longer works at the company where the policy was first purchased. In fact, a voluntary insurance provider cannot raise premiums on individual policies unless it raises them on all similar policies in that state.
Tailor benefits communication
Workers tend to use the workplace as a reliable source of benefits information. But only a third of millennials rate their employers’ benefits education as excellent or very good.4
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To make your benefits communication efforts for this audience as effective as possible, consider adopting the following tactics.
- Give them someone to talk to. Millennials are a social generation. Insurance is complex, and it can be difficult to communicate benefits effectively without human interaction. One-to-one benefits counseling as an integral part of the enrollment meets this need. Having a trained benefits specialist who can talk to Gen Y employees about their insurance options, answer their questions, and clarify product features gives them the personal attention they need to make informed decisions. They’ll be more likely to feel comfortable about their benefits choices and, in return, have a greater understanding of their benefits.
- Use technology where it makes sense. Millennials are tech savvy and embrace digital technology and social media. Yet their online-all-the-time reputation can be misleading. In a recent LIMRA survey of life insurance buying preferences, Gen X and Gen Y consumers said they want information and service online, but they also want the option to talk to someone by telephone.5 Many employers have begun using Web-based, self-service tools to help communicate their benefits because they speed up the enrollment process and capture real-time benefits decisions of employees. However, these tools generally do very little to help employees make informed benefits decisions. Use technology to supplement, not replace, face-to-face, ongoing communication with this group.
- Use multiple touch points. Only 41% of Gen Y employees visit their employer’s HR websites when looking for information about their benefits, compared to 49% of the total workforce.6 This group is also less likely to look at HR booklets or attend benefits seminars. Employers should use a variety of different methods to reach Gen Y employees at work, at home and “on the road.” Don’t rely on any one method to do the job.
Millennials have different needs and expectations regarding their benefits — and their numbers are too large to ignore. Their unique characteristics call for a different approach than what’s worked in the past. To keep them engaged and drive participation in your annual enrollment, consider a new workplace benefits strategy that includes affordable options such as voluntary insurance and benefits communication practices that align with the lifestyles of this important group.
Richard Shaffer is vice president of enrollment for
1 LIMRA, “Young and Misunderstood: Perceived Generational Differences in the Value of Employee Benefits,” Research Briefing, June 2014.
2 Employee Benefit Research Institute, “Health and Voluntary Workplace Benefits Survey,” unpublished data, 2015.
3 Pew Research Center, “Millennials in Adulthood: Detached from Institutions, Networked with Friends,” March 2014.
4 Unum, “2014 U.S. Worker Benefits Survey,” 2015.
5 LIMRA, “Seeking the Ideal Experience: How Gen Y and X Want to Buy Life Insurance,” 2013.
6 LIMRA, “What is $1 Billion an Hour Worth? Navigating the Employee Benefits Marketplace,” 2011.
