This blog is the first in a two-part series on benefit communication errors and bad benefit coverage assumptions.
With benefits open enrollment right around the corner for many organizations, now is a great time to evaluate the success of employee benefits communication plans. I have learned during my career that a consistent, multi-avenue approach is key not only during open enrollment, but in any employee benefits discussion. Without a focused approach on benefits communication, these 5 types of communication and assumption errors can occur.
The differences between benefit plans are not as clearly communicated or differentiated.
Whether you offer similar plans with the same carrier year after year or offer up a new option like a high deductible plan, ensuring employees understand the differences between benefits offerings is imperative. For health insurance, key components to make sure employees understand include deductibles and co-pays, co-insurance, the network, and employee payroll deductions.
The organization’s culture also should convey that employees play a huge role in managing their own benefits. Employees need to be reminded that they are in control of their benefit decisions. The organization is there as a means for obtaining coverage and a support system when issues arise.
Once employee turn in the forms, they do not think twice about their coverage until they need it. (Or until they find out they should have been paying attention.)
For most employees, benefits are a boring, complicated, necessary evil they have to get not only because the government requires it, but to prevent catastrophic monetary loss. They often do not read the details before enrolling. This lack of attention can cause many headaches and dollars at a later date.
Unfortunately, I have stepped into this exact situation. When hired as an HR Generalist, I audited payroll records against benefit enrollment choices. While hoping to find nothing in the audit, I found one employee who had not had health insurance deductions taken out of her paycheck in nearly three years. I asked the employee about her health insurance deductions. She said she was having deductions taken out and proceeded to show me her paystub. She confidently pointed at the Medicare deduction on her paycheck. She honestly thought the Medicare deduction was her health insurance deduction. I then had to work with her to create a long-term payment plan for the overdue premiums.
Employers play the role of insurance broker or direct insurance company contact.
If your organization works with a broker, do you know what services they provide to help support your organization’s benefits offerings? Does the broker offer to act as a go-between for your employees and the insurance company? Are they well-versed in the current trends and regulations of employee benefits? If your broker or insurance contact is only showing up at open enrollment, you are missing out on an important strategic partner.
I have been lucky throughout much of my career to work with insurance partners who looked to understand the business culture, understand the benefits budget, and inform up front of how they can help minimize costs and maximize their support. If your current insurance partner offers no value-added support or offerings, it might be time to look for one who does.
Employees use their peers as their primary source for benefits information.
Employees talk amongst themselves about benefits available, especially during open enrollment. The spotlight is on this critical piece of their compensation package. Whether employees truly understand their benefits or not, they offer their peers advice on benefits decisions and as I have seen repeatedly, on how to handle or interpret bills they receive.
While working as a consultant, an employee came to me with a collection letter stating that he owed over $1000 for an ER visit almost two years before. When I asked him why he did not pay the bill originally, he said one of his co-workers told him that he did not owe the money; he threw away several bills. When I told him he was indeed responsible for the bill and not paying it could ultimately hurt his credit rating, he was angry. After several tense minutes of conversation, he reluctantly called the collection agency to set up a payment plan.
Employee benefits issues are only the problem of human resources.
When employees have issues with their benefits usage or understanding, organizations have issues. Employee disenchantment with their benefits can lead to negativity in the workplace, decrease in productivity, turnover, and a loss of revenue.
For example, one organization I worked for had used one well-known carrier for years. During the renewal process, it became apparent that changing carriers (to another well-known carrier) was the only way to keep the benefits levels the same and not greatly increase the cost. Since I had worked with both carriers in the past, I felt confident that the switch would cause minimal problems to the employees. And when the switch occurred, moving from one carrier to another carrier was almost seamless. What I did not anticipate was that several employees were extremely resistant to this change. Group benefits meetings did not satisfy their needs of understanding the why. I did a lot of reassuring during individual benefits meetings and partnered with my broker to calm fears.
Being aware of these potential benefits communication errors is important for organizations to recognize. If not explained correctly, this part of compensation now becomes a liability instead of the reason employees stay with an organization. Mastering the art of benefits communication and finding the sweet spot where employees know their responsibility in the process and administration should be a challenging, but necessary goal for organizations.
Let us know what unique employee communication tools your organization has used to increase employee awareness and ownership in benefits management.