By Bill Fryman
Imagine this scenario. A man is walking out the door and calls to his wife:
“I’m going to run to the store to get some milk.”
“OK. On your way home, could you pick up a new car?”
“Sure. Any specific kind?”
“No. Just get whatever they are offering. Maybe the same as last year?”
Laughable, right? Yet, this is very similar to what many people do every year when it is time to select their benefits. Medical insurance and other benefits are the second largest expense in most families’ annual budgets. Yet people spend, on average, a mere twenty minutes making their benefits decisions. Twenty minutes! I spent more than twenty minutes picking out my current toothbrush (was debating about going electric, but ended up sticking with traditional – call me old school…)
We spend days, weeks even, researching cell phone plans and agonize over television and dishwasher purchases. But these expenses pale in comparison to the annual cost of benefits plans for most families. It’s not that we don’t think benefits are important. In Metlife’s recent Employee Benefit Trends Study, 74% of employees agree that having insurance/benefits provides peace of mind for the unexpected. So why are we so flippant when it comes to selecting benefits?
Here are three reasons that come to mind and a couple of things employers can do to encourage employees to spend more time choosing the benefits that are right for them.
Benefits are confusing
There’s no need to mince words here. Benefits are as confusing as a mime performing Shakespeare. From PPOs and HMOs to HDHPs with HSAs, employees are drowning in an alphabet soup of insurance acronyms. This stuff is mind boggling. And when confronted with complicated issues, it is only natural for people to brush them aside and focus on other priorities.
Further complicating things is the fact that the number and types of plans available to employees has increased dramatically in recent years. A Kaiser Family Foundation study found that 53% of firms with more than 200 employees offer 2 or more health plans. This is a big change from just a few years ago when companies offered one, maybe two plans, and employees just signed up for what was available. We are simply not used to all these choices, and as a result will take the first plan that looks appealing and move on.
Lack of education on benefits
A recent survey by the International Foundation of Employee Benefit Plans found that only 19 percent of employees have a high level of understanding about their benefits packages, and nearly 49 percent do not understand their benefits materials. And can you blame them? It’s not like they cover this in high school. Employees enter the workforce woefully unprepared to make sound decisions around benefits.
It has therefore fallen to employers to educate their employees on benefits. What’s fortunate, however, is that there is a good deal of resources available to help companies take on this role as benefits educators.
At PlanSource, for example, we offer a range of free educational videos (check them out here) that break down complicated concepts into easily understood chunks, and provide sophisticated decision support tools in our benefits enrollment system. We also offer a service to provide custom employee communications about benefits plans and selections. More about that here.
Antiquated enrollment processes
A final reason people are rushing through their benefits decisions is that many companies are using technology that is not user friendly and some are still using paper enrollment processes. Consumers are used to shopping online for just about everything, and expect an experience that is simple and intuitive. Benefits shopping should be no different.
If employees have to struggle with logging in, can’t follow the logic of an enrollment system, and have to search for documents and materials in multiple locations, then there is little wonder that they will quickly become frustrated and want to get the enrollment process over with as quickly as possible. If this sounds familiar, you might want to rethink your benefits technology. To help in your decision making process, take a look at this webinar we hosted recently covering some of the things you should consider before selecting new ben admin technology: 10 Things You Should Know Before Selecting Your Benefits Technology Partner.
Meanwhile, I’ve got a big decision coming up: dental floss! Waxed or unwaxed? Flavored or plain? Travel size or bulk? This is going to take a while…