Here’s how to make the most of open enrollment for health insurance
With the 2020 open enrollment period opening today and running until Dec. 15, it’s important for companies to effectively communicate benefits and for employees to understand what benefits package best fits their needs. A lot of factors can impact how employers develop their benefit plans, which include company values, cost-effectiveness and changing needs of both the employer and the employee.
Andrea Rios, benefits sales executive with Lovitt & Touché, A Marsh & McLennan Agency LLC Company, aligns clients’ benefits strategies with their business goals and corporate culture, helping them accomplish their vision through managing short and long-term solutions.
She says Lovitt and Touché spends a lot of time working with employers to help them develop benefit plans and an effective communication strategy for those benefits.
“That’s one of the most gratifying parts of working with businesses because we influence behavior directly by doing that,” she says. “We try to find out from the company or employer how they’re communicating to their employees today, if it’s effective, and if we can build on it to better educate and communicate most effectively to employees. Having a multi-pronged approach is the most effective strategy, but it starts with finding out how a company is communicating and how to be most effective for their population.”
Developing a plan
Mike Tilton, general manager, Commercial Segment at Blue Cross Blue Shield of Arizona, said developing a benefits plan starts with offering choice.
“We try to encourage employers not to offer too broad of a menu of options or it becomes confusing for people. When you do that, oftentimes they’ll just do what they did last year,” Tilton says. “When we build out our product portfolios, we try to think broadly about different types of network options. Does someone need a big, broad network or are they someone who doesn’t have a strong affinity with a particular provider?”
“We also try to encourage more than one plan offering, and what we find a lot more now as people are becoming more engaged as consumers in healthcare, there’s a lot more interest in health savings accounts (HSAs) and plans that allow employees to leverage the tax benefit of an HSA product, but also allows them to effectively plan for not only their healthcare costs now, but also to leverage the HSA for their healthcare costs in the future and really start to think about healthcare the way they think about a 401(k) plan,” Tilton says.
Tilton says BCBSAZ recommends employers meet consumers where they are, which includes employees that span multiple generations and prefer to receive information in different ways.
“We encourage employers to use a combination of printed material, email, chat and to hold meetings where they can present the information to their employees in person and allow for proactive Q&A sessions where employees can talk amongst each other, talk about their own experiences with the plans, and socialize some of the thought processes around the decision making around their benefits,” he says.
For many employees, a competitive benefits package is an important factor in deciding whether a prospective employer is the right fit and can be key in an employee’s security and peace of mind to take care of themselves and those important to them.
“The overarching conversations we’re having with most of the employers that we work with are trying to figure out not only how do they create an attractive environment for employees, but employee retention is a huge objective and the benefits program is one of the strongest tools they have outside of compensation to help with that,” Tilton says.
According to a 2018 Society for Human Resource Management (SHRM) Employee Benefits report, 34 percent of organizations increased benefit offerings in the last 12 months. Organizations that did were most likely to increase health-related (51 percent), wellness (44 percent) and employee programs and services (39 percent) benefits. The top reasons cited for increasing benefits were to retain employees (72 percent), to attract new talent (58 percent) and to respond to employee feedback (54 percent).
Often, one of the first times employers will introduce benefits to an employee is in a new hire orientation or in a conversation with whoever is in charge of benefits. Rios says that while this may be the first time an employee is aware of what benefits are available to them, it’s also important for employers to keep the conversation open to employees throughout the year as well to reach them consistently during their time at the company to have additional opportunities to learn at different times about the benefits.
Tilton echoes Rios’ opinion.
“We suggest rather than simply communicating at the time that they have to make the open enrollment decision, that they do take periodic opportunities to remind employees about the plan and how to maximize the value of it,” Tilton says. “But there are also some great milestones around the year mark that will allow employees to actually think about what their costs are going to be.”
Tax time guidance
One of the ways to do that is by preparing to file taxes. Tilton says by gathering medical claims and receipts throughout the previous year, employees can get a clearer idea of what they’re spending on healthcare.
Tilton says Blue Cross Blue Shield recommends employers communicate the benefits program to employees on a year-round basis so “employers can maximize the perceived value of the benefits,” so, for example, if it’s heart health month, employers can include an annual preventive exam, an annual physical or flu vaccinations and communicate its availability to employees Tilton says.
In addition, Tilton says employers are moving to defining the benefits contribution and “providing education and guidance on things employees should be thinking about before they make a decision, but they want employees to buy the benefits that matter most to their employees,” Tilton says. “We see a lot more employers saying, ‘We want employees engaged in healthcare, so we’re going to encourage and incentivize them to take health-risk assessments to understand or improve their health status,’” which has long-term benefits that will reduce cost to the company.
“Having comprehensive benefits and an effective benefits communication strategy are a great chance for the employer to demonstrate their commitment to the employee’s overall health,” Tilton says. “It’s not just a matter of them coming to work every day and working hard and not really caring about their life outside of the workplace. There’s a significant amount of correlation between a person’s health status and their mental acuity and productivity.”
The HR component
This correlation can be important to note for human resources professionals, who Tilton says not only evaluate healthcare costs, but look at the total human capital costs which include absenteeism, productivity, disability claims and worker’s compensation, all of which can be driven by an employee’s health status.
The SHRM report also found 92 percent of employees indicated benefits are important to their overall job satisfaction and showed a relationship between benefits and retention. Twenty-nine percent of employees cited their overall benefits package as a top reason to look for a position outside of their current company in the next 12 months; 32 percent who were unlikely to look for an external position also cited their overall benefits package as a top reason as well.
“Often times, benefits are a reflection of the company’s culture,” Rios says. “And that’s really at the heart of all of it. Once we understand what a company’s goals are around that and how they are taking advantage of their employee benefits package to ultimately better reflect their company’s culture, then we can make a true impact.”