It’s that time of year again, when many companies roll out new or returning healthcare options to employees. The problem?
SHRM observed that employers and employees have different ideas about the best methods for selecting and enrolling in healthcare benefits. That observation is backed up by a study from the Life Insurance Marketing and Research Association. The study revealed a sizable disconnect about what’s wanted and what’s offered during health insurance enrollment.
What we’ve learned in recent years is that employees increasingly want self-service approaches to benefits research and enrollment.
Comprehension or the Lack Thereof
There have been many changes in the last decade to how employees approach the issue of purchasing health insurance. What’s the biggest shift in this arena? Self-service portals that provide access points on company websites to available benefits options and enrollment submission. At this point, most people are used to going online to take care of everything from shopping to banking, so there’s a growing comfort level with a self-service option for enrollment.
But providing easily accessible enrollment portals only addresses part of the problem. In many instances, the hardest part of enrollment isn’t how to fill out paperwork or navigate the portal. The hardest part is deciding which plan will work best for you in the first place. That decision is harder for those who don’t understand the jargon and the ways the healthcare industry works.
A February 2019 HR Dive article lays out some revealing statistics about employee healthcare illiteracy.
About 35% of the workforce doesn’t understand or has a limited grasp of their company health benefits.
33% of employees don’t understand their medical bills.
62% say their employers haven’t offered any resources to help with health insurance-related questions.
While American employees pay twice as much for healthcare than everyone else around the globe, their life expectancy is shorter.
Ouch. How can this knowledge gap be addressed? By paying attention to what employees actually need, rather than what employers think employees need.
What Are Decision-Support Tools and How Can They Help?
Decision-support tools are software programs that help non-experts (i.e., most people) make better decisions when choosing from benefits options. The previously mentioned notion of self-service has become especially vital to millennials in the workforce who want to customize their benefits packages. Right now, they make up 35% of the workforce and, by 2025, they will reach 75%. Decision-support tools help millennials customize their benefit packages.
These tools have three basic components: the data, the software system and the interface. The data includes internal and external information, from the organization’s files to information gathered online or from a database. The software system can be built based on a variety of mathematical and analytical models and algorithms to analyze the data. Finally, the interface is what the user sees when interacting with the system. It’s where they input data specific to them and it displays additional information, options and results.
Different systems use different models. With respect to healthcare options, the two most common algorithms are the percentile of use and calculator. Most decision-support tools use the calculator model, which multiplies the estimated cost of a service by user units of service. This requires employees input a great deal of personal information concerning estimated costs, previous medical services and prescriptions. They usually display only one choice for health insurance at the end.
The percentile-of-use model runs type-of-service data against the plan-design details to project both premiums and total expected out-of-pocket costs. This method, utilized in our PLANselect® tool, is cheaper, easier to set up, easier to use and requires less personal information from employees. It takes only about five minutes to see the relative value of each offered plan option. That’s right, PLANselect shows what each option is likely to cost, allowing users to compare plans rather than just returning one option.
Other Changes HR Can Implement to Improve Benefits Engagement
HR can take other steps to make it easier for employees to choose between plans during enrollment and use their benefits year round. Don’t overwhelm by throwing everything at them at once. Offer employees smaller, digestible bits of information. Establish a schedule for the information’s release, such as monthly or bi-weekly, to get them thinking about their benefits more than just once a year. Voluntary insurance, including life, disability, hospital and cancer coverage, are becoming increasingly important to employees. In fact, 85% of the nation’s workers see a growing need for this type of insurance. Look at what voluntary options you offer and what else is out there. Make sure to let workers know about any non-traditional benefits like financial wellness programs or aid for new parents. Vary your communications strategy. People learn in different ways, such as videos, group discussions and one-on-one meetings.
Make this time of the year one filled with the beauty of changing leaves rather than anguish over changing healthcare options.