NEWS

Low employee knowledge, engagement about benefits creates communications opportunity for employers

"What we've got here is a failure to communicate"

Kelley M. Butler
May 1, 2007
Employee Benefit News

As employers begin preparing for this fall's open enrollment season, they are being confronted with new survey data from a variety of sources that show employees' low knowledge about benefits and how little time they spend making benefits decisions.

• 27% of employees with disability insurance don't know what percentage of their income is protected (Guardian Life Insurance).
• 11% of workers refuse health coverage even when no financial contribution is required (Kaiser Family Foundation).
• Most employees - 63% - spend 30 minutes or less to make benefits decisions, and spend about 0.8 hours to research their options before buying - compared to 6.8 hours for a car and 1.3 for shoes ( MetLife).

As such, it's no wonder that 63% of employers surveyed by Watson Wyatt rank employee communications as a top challenge during open enrollment, with 36% saying engaging employees is toughest.

"Annual enrollment has changed significantly at most companies," says Jeri Stepman, Watson Wyatt leader for health and welfare administration. "It's moved from a transactional or registration-like process - where the goal has been to automate and to increase efficiency - to an engagement and decision-support process, where the goal is to engage employees as benefits consumers."

With employee knowledge and engagement already at a low point, crafting an effective communications campaign is key for this year's enrollment period.

"Companies make a huge investment in benefits and people programs," notes Beth Marusi, vice president of XL Communications, a Connecticut-based benefits communications firm. "To maximize the value of that investment, they have to understand the importance of having a strategy for communicating those benefits."

Timing is everything
One of the first steps in launching a valued enrollment communications initiative is planning it well in advance - even starting now - so that benefit managers can distribute information multiple times across multiple channels. The goal is to increase engagement, allow employees to process all of the information and ask questions to increase knowledge, then give them time to make educated selections.

"Planned redundancy is a good investment," says Patricia Zar, senior vice president at Aon Consulting. "People are busy, and this isn't at the top of their list. It's important to get people engaged early so that they don't wait until the last minute."

Zar adds that communicating over a longer period of time helps to encourage employees to take their time in making decisions. "You want to impress upon employees that the subject matter is complex, and the decisions they have to make are more complicated now than in the past and will have a much greater financial impact on them. Say, This is something you need to spend some time on, and we have the tools and resources to help you.'"

Also, spreading communications messages over a longer time span than a few weeks prior to enrollment is useful because "people don't learn in compact situations," says Jon Kessler, chairman of WageWorks, a provider of health care savings accounts. "They need to learn at the point that is convenient to them as a consumer," and providing a longer time frame helps to ensure more employees get the message.

Changing channels
In addition getting benefits messages at different times, employees also want enrollment information in different ways. It seems no one medium - print, portal or in person - is right for all groups, and savvy employers will craft enrollment communications using various channels.

"I like to watch a lot of TV, so if you put a video in front of me, I'll watch it and pay attention," Kessler says as an example. "But I'm unlikely to do the same for online because I spend enough time looking at spreadsheets."

Although the trend certainly is moving toward more communications online, experts caution that the Web can be both a blessing and a curse.

"The beauty of electronic communication is that it's quick, easy and inexpensive," says XL's Marusi. "But it's also so easy to ignore, delete or click away. So if you rely solely on electronic, you're missing the boat. We encourage our clients to use a more hybrid approach."

Zar agrees: "A combination of media is best because even when you're online-savvy, when it comes to benefits, employees really do prefer print communication sometimes to see examples and comparisons, and share information with their spouse. Online is helpful with tools and calculators, but people still like the additional support of print."

She adds that various communications are necessary because demographic preferences don't always hold true.

"Yes, younger workers are more comfortable with online content and very often prefer it, but it's not that simple," Zar cautions. "At the same turn, mature workers don't always want print. If we generalize, we can deceive ourselves about what people really want and need."

Experts seem to agree, though, that face to face is the best way to communicate benefit changes or complicated new programs, such as a consumer-driven health model.

"I recommend face to face when talking about HSAs and HRAs," says Marusi, "because it's complicated. Just because you give someone a brochure doesn't mean they're going to understand it. You want a forum that allows people to ask questions and so you can see if they have the deer-in-the-headlights look."

For employers with workers in multiple locations, Zar offers webinars or videoconferencing as cost-efficient alternatives. "In a world where time and money are both slim, a video webcast can create an opportunity for dialogue, or a webinar with a chat feature so that employees can post questions." She also suggests benefits blogs or podcasts, allowing employees to post comments and questions.

In-house or outsource
Watson Wyatt finds that satisfaction with the enrollment process is highest among employers that use a mixture of internal and external resources to support employees through the enrollment cycle.

For example, Marusi maintains that outsourcing enrollment communications has merit for employers who need to communicate large-scale benefits changes or announcements. "One of the most difficult things to communicate is change, and employers tend to make their communications reactive rather than proactive. So, they don't achieve what they want to do, which is get employees to understand."

Crystal Madison, a marketing representative for New York-based eEmpower-Plus, emphasizes the efficiency of outsourcing enrollment - it frees time-strapped HR-benefit managers to focus on in-house communications, such as newsletters. The International Founda-tion of Employee Benefit Plans finds 71% of organizations publish them, with most either e-mailing them to workers or posting them on an intranet. Eighty-eight percent of content is information about benefits overall, with 62% on health and wellness, and 50% about retirement planning.

However, even as print remains steady and online communications proliferate, something is being lost in the translation with employees. According to MetLife, just one-third of workers "agree completely" that their company's benefits communications provide an effective education (see chart).

Focus on health
No matter what medium employers use, it appears the largest communications flop has been in educating employees about health care, particularly consumer-driven health plans, which may explain the plans' low adoption rates.

According to WageWorks, 49% of employees with high-deductible health plans have not received any information from their employer about how the plan and HSAs work. Fifty-nine percent did not receive information about where they could open an HSA.

The lack of information isn't due to lack of employee interest. WageWorks also finds employees want clear information to help choose health care benefits (33%), better information about costs and savings of health benefits (28%), hands-on help from health and financial experts (15%) and tools for health care expense management (12%).

"It's almost like the goal with CDH is to turn average working families into tax experts," Kessler says. "But getting employees to buy into an HSA, HRA, FSA or any other kind of A' means giving information in a context that workers and families can understand. Luckily, the upcoming open enrollment season provides a new opportunity for employers to offer more hands-on guidance and get it right in the coming year."

The key word being "year." Benefits communication is a year-round mara-thon, not just a two-week sprint during open enrollment, experts say.

Simply, Kessler says: "It's like voting. Why don't more people vote? Because you only get one day to do it. Communicating beyond open enrollment is key, because it's not just about that two-week period and the plans people enroll in. What matters is how they use the plan."

Further, employees' lives continue to change even after enrollment is over, and they need benefits information to adapt to those times, says John Wuich, vice president and national client manager for ADP.

"During any type of life change, they need you providing information - going from active to retiree status, after diagnosis of an illness, the death or birth of a dependent, or getting promoted," Wuich says. "During those times, different questions rise to the top, and the more hands-on and more personalized the communication, the more effective" employers will be.