This article continues last week’s about the increasing need for year-round benefits open enrollment communications. This week our focus is on the finances of benefits elections with emphasis on incentives and taxes. Here are a few reasons why communicating once a year in the Fall may no longer be enough:
The consequences of making a bad decision have never been higher.
- Wellness program incentives can now represent up to a third of employee premium costs. The programs that allow employees to qualify for those incentives are now significant enough to warrant their own campaigns. Because Wellness incentives are increasingly tied to premiums, they typically must take place before Open Enrollment even begins, often months in advance, perhaps as early as May. The challenge: How to communicate the importance of participating in a Wellness program with premium incentive when you do not know the details yet, and Open Enrollment for the next year is as far as 4-6 months away?
- Taxes are increasingly important in understanding the value of various health and benefit offerings. High Deductible Health Plans, Health Savings Accounts, and Flexible Spending Accounts are still under-used at most companies. The reasons for this are complex, but a contributing factor is that employees do not fully understand how the tax savings contribute to the affordability of those plans.
- Employees have increasing levels of administrative responsibility tied to health benefits. They may need to track balances and submit expenses in separate accounts. They may need to be prepared for potential auditing. Too many companies try to educate employees on how to manage these accounts during the Open Enrollment period. It can be very overwhelming especially in years when you are changing other aspects of their health plans. Even if you do the job well, employees then have to wait 2-4 months for their benefits to activate in January so that they can start using the tools. Most will forget essential information in the interim. A separate education and communication campaign may make sense in late December or early January, when employees can actually access and start using the tools that you are teaching.
- Speaking of taxes, you may already use a vendor to talk about retirement or financial planning. Many companies put emphasis on this in March or April, around tax season time. It has never been more important to include health care in that discussion so that people can understand the unique benefits of a Health Savings Account relative even to a 401(k) plan.
- The fundamentals of understanding health plan terminology have never been more critical. Understanding the differences between copays, coinsurance, the different kinds of deductibles, and premiums is essential. Deductibles in particular can get very tricky once you get to any multi-person coverage.
Open Enrollment and benefits are bringing a lot of change to employees. If you are interested in learning more about change that sticks, register for the IABC Heritage Region Annual Conference in October and stop by my presentation with Megan Hogan on Behavior Change that Sticks. Or visit Soteres Consulting for more on how we help organizations communicate change to employees.