A new study by Mercer shows that most employers have seen an average 2 percent increase in enrollment as they extended eligibility for dependent coverage to employees’ children up to age 26 under the ACA.

Prudential Identifies the Top 5 Trends

Prudential’s Fifth Annual Study of Employee Benefits: Today and Beyond illuminates the effects of changing workplace demographics and the economic environment on emerging  employee benefits. The report identifies 5 major trends that are driving employee benefits today.

In this post, we will examine trend #3: redefining enrollment.

  1. An employee driven benefits model is arising – link to part 1.
  2. Worker productivity is the next frontier in benefits cost management – link to part 2.
  3. Enrollment is being redefined to help make better choices 
  4. An increasingly diverse workforce must be addressed  – link to part 4.
  5. The realities of preparing for a secure retirement are changing – link to part 5.

Trend #3: Redefining Enrollment

Enrollment is a Neglected Priority

In view of the economic environment, concerns such as “controlling healthcare costs” now rank much higher than “helping employees make better decisions.” It is among the two lowest benefit priorities. There is less commitment to expanding voluntary benefits and education and communications have declined in importance among employers.

  • Only 28% of employers rank “addressing employees’ diverse benefit needs” a very important priority.
  • Only 35% rank “helping employees make better decisions” a very important priority.
  • Brokers/Consultants mirror this lack of priority.
  • Increasing employee education/advice declined from 34% to 28% as an important priority since 2007.

The result is a growing disconnect between an environment in which employees are expected to share more in the costs and decisions regarding their benefits and an education gap in which they may increasingly feel less confident in their ability to do so.

Enrollment Has Become Less Effective

In three key areas of enrollment, there has been no progress: communications effectiveness, willingness to tailor messaging, and length of the enrollment period. Despite the diverse workforce, a wider array of benefits and a complex regulatory environment, a one-size-fits-all approach prevails.

  • Only 23% of employers say the benefit communications are highly effective, flat since 2007.
  • 44% of employers believe they have given employees adequate time to consider benefits options, flat since 2007.
  • Employers are less willing to target benefit communications to specific employees than in 2007.

Employees Spend Little Time and Effort Engaging in the Enrollment Process

Workers report that they are more concerned with work life balance than they were prior to the economic downturn, and employers consider them increasingly important. Comparing 2010 to 2007:

  • 68% of employees spent little time or effort in making their benefit selections.
  • 24% just chose the same benefits.
  • 44% made few modifications.
  • Only 15% spent a lot of time considering their options.

The most common way of engaging is reading benefit materials (78%) but less than half engaged in other forms of inquiry, including talking to colleagues and friends (40%) or a professional outside the workplace (8%), going to benefit enrollment meetings (36%) or speaking to an HR representative (43%.) Clearly,  carriers need to find more effective ways to engage employees’ interest and create a buzz around enrollment.

Most Employees Enroll at Work by Internet or Paper Forms

  • Telephonic automated voice systems are seldom used.
  • Those who enroll via internet are more likely to spend more time enrolling.
  • Those who enroll via paper are less likely to rate the benefit communications as effective.

Online enrollment provides the best customer experience. It better guides employees through the process, ensuring accuracy and providing decision support, including calculators, reducing error and providing an automated submission process.  Additionally few complete enrollment from home, which may also explain why so little time was spent on the enrollment process since those completing enrollment at home are more likely to spend a greater amount of time enrolling. Carriers’ challenge is to find ways to encourage online enrollment at home.

Employers who Provide Outstanding Communications are More Effective

  • Only 13% of companies place considerable importance on communication and enrollment.
  • Those who do are more likely to link their benefit strategies to their business and financial goals.
  • They are nearly twice as likely to say their employees are highly influential in their benefits strategy.
  • They report greater use of online tools by employees.
  • They are more likely to report that their employees are highly satisfied with their benefits (82% vs. 61%.)
  • They are more likely to use multiple channels for enrollment.

Multiple enrollment channels include:

  • Group meetings and seminars.
  • Individual one-on-one meetings outside of work hours.
  • Online presentations.
  • Video, DVD or CD-ROM.
  • A toll-free number for questions.
  • Online enrollment.
  • Targeted mailings.
  • Email to home.
  • Outbound calls during the enrollment period.
  •  Social Media.
  • Mobile devices.

Upcoming:

Upcoming posts will highlight the other emerging trends identified in Prudential’s Fifth Annual Study of Employee Benefits: Today and Beyond.

Snap! principle of enrollment excellence:

Carriers must find creative ways to generate engagement and interest around enrollment .

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