Communicating what’s new in benefits and how those changes impact employees is challenging to do in a short amount of time. Which is why benefits communication and personalization should be considered a year-round strategy for higher benefits literacy and an overall better enrollment experience for employees.
Since benefits spending is one of the highest price tags for employers, using data and communicating these benefits in a personalized way is key to higher ROI.
There is too much at stake for the process to not run efficiently. The urgency and importance of getting this right is heightened by the fact that benefits spending is often the second or third largest budget item in a company’s budget.
Having the right benefits administration technology and meaningful data can transform annual enrollment from a once-a-year event into a year-round personalized journey that engages employees. Ultimately, this helps employees become better consumers of benefits, thereby lowering benefits spend.
But how can organizations move from a solution that administers benefits to one that focuses on benefits strategies to create better member outcomes? Most organizations face headwinds that include tracking benefits data effectively, helping members select the appropriate plans and automating tasks such as dependent verification.
For example, knowing who is not eligible for benefits coverage is important. Many organizations unknowingly provide benefits to those who are not eligible or who are no longer with the company, oftentimes it can be 5-7% of those enrolled. With an average annual health benefits cost of $15,000 per employee, that amounts to a significant financial burden to the business. Without full and transparent access to data, businesses can’t make informed decisions that drive better outcomes.
It’s common for businesses to see close to double-digit increases in their annual benefits spend from health care costs. “Tackling these costs requires organizations to have an understanding of employees’ claims and utilization data to determine their biggest expenses. Using that data, organizations can tailor plans to fit employees’ needs.
Some clients took this approach, but we realized that creating an optimal plan for employees is only part of the solution. How that plan is communicated is also critical. When they implemented a high-deductible health pan (HDHP) a few years ago, less than 2% of employees enrolled. An HDHP essentially has lower premiums and higher deductibles than a traditional health plan and is meant to encourage consumer-driven healthcare. What they found was people didn’t understand how an HDHP works. It is important to offer a decision guidance tool to help employees choose the plan that best fit their needs. The following year, the clients saw an increase of 5x in HDHP participation at their next Open Enrollment.
By leveraging technology to learn about your population, you can significantly impact your organization’s bottom line. To create a sustainable benefits program and reduce the average annual increase in total spend for your organization, you must have access to the right data and transparency.
The real value to a business is using the right technology and data analysis to better understand employee needs and craft a benefits strategy that addresses those needs.
How does a comprehensive employee benefits strategy impact a company’s culture? We will be presenting our finds in February’s Insight.