Understanding voluntary benefits requires teamwork.

Demystifying job benefits is a group effort

Two major insurers have released big studies about job benefits, and they highlight two contradictory findings.

But the contradiction isn’t between those studies — actually, MetLife and Prudential largely agree about industry trends. Both point to a contradiction among the consumers…

We want more benefit options, even though we don’t understand the benefits we’re already paying for.

MetLife’s annual U.S. Employee Benefit Trends Study, released last week, featured more than 1,500 employers, 1,200 employees, and 500 brokers. It found…

  • The number of employees who say benefits are an important reason they first chose their employer increased from 28 percent to 43 percent.
  • The number who say they stayed with an employer because of benefits increased from 38 percent to 50 percent.
  • 64 percent of employees want a wider range of benefits, up from 54 percent. A similar number say they’re willing to pay a greater share of the cost to get more options.
  • And yet, more than half (and especially millennials) agree they need more help understanding how their benefits work.
  • 42 percent are not confident they effectively use their current benefits, and more than a quarter of employees simply roll over their previous benefits without taking another look.

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Prudential’s The ABCs of Voluntary Benefits had a smaller sample size (1,000 each of employers and employees, 350 brokers) but a similar focus and results — although it showed brokers are more optimistic that voluntary benefits will grow in the next few years than everybody else. Says Prudential…

  • The number of employees who want more benefits options grew from 34 percent in 2012 to 43 percent in 2013.
  • 23 percent of employees sought in-depth advice about benefits from their human resources department, compared to 15 percent in 2012.
  • 43 percent “report doing more homework on their employee benefits,” up from 30 percent in 2012.
  • 28 percent are comparing outside options to their work benefits.

Don’t feel bad, though. If consumers are a little conflicted, so are employers.

What employers want

One of the takeaways MetLife highlights is that employers are shifting away from a focus on voluntary benefits — benefits beyond traditional health insurance — for the first time since 2010. Only about a third of them are satisfied with employee participation in those programs, and fewer companies plan to continue expanding options in the next couple years.

More than half plan to maintain the same budget for benefits, while 13 percent plan to decrease it. Their top concerns are controlling costs, keeping their employees, and dealing with new regulations. Less of a priority: employee feedback.

On the other hand, employee benefit satisfaction is the highest MetLife has seen in 12 years of doing the study (50 percent), and the company says benefit options are one way to garner loyalty. Employers turning away from that are shooting themselves in the foot — instead, they need to focus on educating employees about options.

Michael Fradkin is Metlife's expert on voluntary benefits.
Michael Fradkin

“Employers are increasingly understanding the criticality of not just offering  benefits, but the means of doing that with the right communication strategy to provide the support that employees need,” says Michael Fradkin, MetLife’s senior VP of markets and growth strategies.

“If the employer is OK with just offering benefits, and not taking an interest in doing it the right way they’re probably not going to the get the outcome they want,” Fradkin says. More employers are get that and are doing it now, he says — but many are also temporarily bogged down in all the changes wrought by Obamacare.

“If there’s one thing that surprised me a bit this year, it was a growing gap between what employees want and what employers think employees want,” says Fradkin. “I believe healthcare reform is all-consuming for employers and that’s where their focus is [right now].”

How brokers and employers can help make job benefits clear

Prudential’s study highlighted some advice from insurance brokers that employers should pay attention to, even if it is self-serving: One enrollment period might not be enough.

“Nearly half (46 percent) say they prefer or recommend multiple enrollment opportunities for different benefits during the course of the year, up from 33 percent in 2012,” Prudential says. “Sixty-seven percent say they believe employees would probably or definitely make better benefits decisions if their life and disability enrollment was separate from their medical insurance enrollment.”

Meanwhile, Fradkin points out Metlife’s study shows employees who are happy with communication about benefits are more than twice as likely to say they very loyal to their employers. So how can they do a better job communicating?

He says employers need to take an active interest in how employees are exposed to benefits, make time for employees to talk to an expert, and put more resources online.

“What our customers and employees are saying is they want to do this stuff online, where they want, and when they want,” Fradkin says. He says simple tools like life insurance calculators are popular — MetLife has one linked on its front page — and there needs to be more stuff like that.

“We need to do a better job of as an industry to create the right experience. You don’t want to send someone else to a separate site or to find it on their own,” Fradkin says.

Trisha Zulic’s a member of the Society for Human Resource Management’s technology and HR management panel, and she agrees.

Trisha Zulic says understanding voluntary benefits is a team effort.
Trisha Zulic

“I’ve been in HR 20-plus years and every year it costs more. Eight of 10 employees don’t understand the benefits and they have five minutes to make a decision that affects their family,” Zulic says.

“It’s like, everybody’s speaking a foreign language,” she adds. “You’ve got executives speaking Italian, brokers speaking Spanish, and employees speaking English.”

Meanwhile, the HR department is stuck in the middle trying to translate. She says they could do a better job of that if more people got certified as Professionals in Human Resources (PHR) or Senior Professionals in Human Resources (SPHR) — programs her organization offers. But she also says there are things consumers can do, too.

What consumers can do to learn about voluntary benefits

Even if there has been a dip in companies focusing on voluntary benefits, both MetLife and Prudential agree they’re going to continue growing, and that consumers are going to shoulder more of the cost. (After all, they’re optional and it’s still cheaper than buying them on your own.)

The top voluntary benefits employees are interested in seeing include vision care (60 percent), accident insurance (49 percent), and critical illness insurance (44 percent), according to MetLife.

But before consumers get anything else, they need to slow down and read what they’ve been given, Zulic says.

“Employees don’t understand what they read when they get hired, they don’t even look at the employee handbook until there’s a problem. Unfortunately, they need to read the 50 pieces of paper,” Zulic says, and ask questions — early and often. That includes during enrollment periods.

“They need to push back on a five-minute decision to enroll and say ‘I need more time, I need to talk to somebody,'” Zulic says. “Benefits are so personal that doing it in a group setting is a disservice.”

Be sure to find out what you already have, too. Zulic says wellness programs and help with retirement planning are common these days, and you may even be able to get gift cards for going to the gym ever so often.

What consumers want to help understand voluntary benefits.

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