Benefits September 25, 2006
Hewitt Offers Tips to Employees for Open Enrollment
September 25, 2006 (PLANSPONSOR.com) - In 2005, 70% of eligible employees defaulted benefit coverage by being inactive during open enrollment, according to research from Hewitt Associates.
Reported by Rebecca Moore
This was up from 64% of employees in 2003, according to a Hewitt press release. Yet more employees were asked to make active buying decisions in 2005 (10% versus 6% in 2002).
In its press release, Hewitt offered the following tips to help employees in their benefits decisions during open enrollment:
- Employees should carefully review benefits selections from last year and assess how they utilized those benefits – looking at all of the employer offerings – including health, financial and work/life benefits.
- Make decisions. Many employees assume that by not making a decision during open enrollment, they will default into the plans they selected last year, but a growing number of companies are requiring active selections this year, particularly with health plans. By not making an active decision, an employee risks being defaulted into an employer-chosen program that may not meet the employee’s needs, or could be dropped from coverage altogether.
- Consider new benefit offers. Many companies are offering new features to their benefits programs, including consumer-driven health plans (CDHPs), which provide financial incentives as well as education and support tools. High Deductible Health Plans (HDHPs) coupled with Health Savings Accounts (HSAs) are also becoming popular, since they offer a lower annual premium and a vehicle for building savings for future medical expenses. Some employers are also offering new 401(k) features, such as contribution escalation and automatic rebalancing.
- Employees should not pass up tax advantages. If the company offers them, employees should participate in health and dependent care spending accounts, and the employer’s 401(k) plan.
- Take advantage of free money. Many companies provide additional contributions toward the cost of benefits if an employee pledges to comply or participates in certain incentive programs. These programs – which may include smoking cessation, seat belt safety or fitness pledges – allow employees to reduce their overall benefits cost potentially by hundreds of dollars each year.
- Employees should also take advantage of the 401(k) matching contribution program, if offered. More than 20% of employees participating in a 401(k) plan did not contribute enough to receive the full company match in 2005.
- Employees should use benefits tools offered. According to Hewitt Associates, 60% of employees said their health care plans get more complex every year, yet only half of employees who said tools and information were available to help them, actually used those tools.
- Employees should take advantage of tools such as health plan comparison charts, which allow them to compare your coverage and costs, such as out-of-pocket and payroll deduction, for different health plan options. When evaluating financial contributions, employees should take advantage of the outside investment advisory services offered by the plan sponsor such as online advice or one-on-one financial counseling.
- Employees should commit to a long-term savings program and evaluate contributions annually to see if they are on track to achieve retirement goals.
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