According to the 2015 Aflac Open Enrollment Survey, more than half (56%) of employees say they spend less than 30 minutes researching their benefits, and more than one-third (34%) say they spend less than 15 minutes.
In addition, a survey by DirectPath finds that 71% of employers opt for passive enrollment in their health plans—meaning employers provide open enrollment materials to their employee population, may host a webinar or presentation of benefits and options, then direct employees to a website for self-service enrollment. Because there is no meaningful education, employees may just keep the same benefit choices they had in the previous year.
Anna Phalen, VP of Customer Insights/Account Management at Jellyvision, a provider of interactive software to help employees with benefits and financial decisions, based in Chicago, says the timing of education is important. Jellyvision recommends starting six to eight weeks before open enrollment. “If a plan sponsor starts three months in advance, employers will forget some information; if it starts a week in advance, employees won’t have a chance to review all their options,” she says.
Phalen suggests sending an email first, then a post card the next week, then a text message or mention in manager meetings three week later. “Not only are you hitting the best timing for communications, but you are also using different channels to engage different people in different ways. The more diverse plan sponsors are with touchpoints—email, mailings, Intranet, meetings, etc.—the more they can ensure employees are paying attention,” she says.
Communications can be personalized to generational difference or individuals’ potential specific situations. For example, Phalen says, Millennials may be suited to certain health plans. Since they are generally healthy, a high-deductible health plan with a low premium may be best for them. However, Millennials and other generations may be saddled with credit card and student loan debt, so student loan repayment benefits or financial wellness programs may be important to them.
For those closer to retirement, a message that can resonate would be, “Did you know you can make catch up contributions to your retirement plan?” Phalen says Jellyvision promotes using the word “you” to make communications more personal.
She also notes that communications should be easy to understand and offer a clear call to action. Communications should not include industry jargon. “Those crafting communications may be experts but employees are not, so they should put themselves in employees’ shoes to drive traffic to active enrollment,” Phalen says.
Communicating about HSAs
Phalen notes that presenting health savings accounts (HSAs) as a vehicle for retirement savings has become a very powerful message recently. “In the past, the focus was on getting employees comfortable with high deductible health plans [HDHPs], but it is important for employees to know what a great benefit HSAs are to them. They could set them up for financial success in the future. Highlight it year after year, and employees will eventually get it,” she says.
She adds that Jellyvision has seen a trend lately of plan sponsors including HSA communication when talking about retirement planning; it was a focus of a recent rendition of Jellyvision’s ALEX software.
Alana Elias Kornfeld, VP of brand strategy and content at FSAstore.com/HSAstore.com in New York City, says the company started looking at lifestyle based personas of its website users. It found for Millennials, health care is not a top priority on their budget. She agrees with Phalen that HDHPs may be the best health benefit choice for them, but also HSAs can be promoted as a path to save for retirement since they usually do not have a lot of health care spend.
As employees get older; however, having children or developing chronic health issues can increase employees health care spend, and plan sponsors need to educate employees about the benefit of HSAs in decreasing their financial burdens.
Simple language with no industry jargon is also important when educating employees about the benefits of HSAs. Elias Kornfeld says her firm has an ongoing brand effort to help educate employees about what is eligible to paid for from HSAs. In addition, hsastore.com/learn offers simple education using animations and interactions that are brief on text. It includes inspiration for how plan sponsors should be sharing information and getting employees to make new elections, and a guide to HSA investments is forthcoming.
She says explaining the triple tax benefit of HSAs and how that creates a compound effect can be communicated via a metaphor—diet, exercise and great sleep contribute to a better health result. “This is something employees are familiar with and that plan sponsors can use to communicate about HSAs,” she says.
According to Elias Kornfeld, open enrollment communications is a year-long process. She suggests employers use ongoing messaging, support and tips. “Use time throughout the year to bolster your employees’ benefits education so at the time of open enrollment, it’s an easy win,” she says.
Rachel Rouleau, compliance director for FSAstore.com/HSAstore.com, says the firm offers a calculator to illustrate the potential retirement savings that can be created from investing in HSAs. Employees input their HSA balance and what they expect to spend, and the calculator uses a rate of interest and years to retirement to show the balance employees could have by the time they retire.
Sean Hanft, content manager for FSAstore.com/HSAstore.com in New York City, adds that while it seems Millennials are in the best position to use HSAs as a vehicle for saving for retirement, his firm advocates for educating all demographic groups about rolling over HSA assets year after year to be used for unexpected health care expenses as well as retirement income.According to Elias Kornfeld, FSAstore.com/HSAstore.com provides communication materials for free. The web page hsastore.com/open-enrollment offers help with decoding health plan acronyms, communications about understanding voluntary benefits and whether they are worth it, plus links to different calculators. Plan administrators can partner with FSAstore.com/HSAstore.com and it will provide communications directly, or they can download what they find on the site.
« All 403(b) Plan Sponsors Should Focus on Document Remedial Amendment Period