Making the Most Out of Open Enrollment

OpenEnrollment

Nearly half of employees are stressed by the open enrollment process and only half are confident about the benefit decisions they made last year, according to a study by MetLife. Millennials are the most stressed and confused. When asked about the most effective benefit resources, respondents ranked one-on-consultations well above other resources. In fact, Millennials led their generational counterparts in valuing one-on-one consultations. However, only half of employers offer one-on-one consultations. Sixty percent of Millenials consult with their families and friends on benefits. MetLife says that employers need to help their employees connect the value of non-medical benefits to their day-to-day lives. Employers should also do the following:

  • Make sure that employees fully understand key terms such as “deductible,” “premium,” “PPO,” and “HMO.”
  • Have employees ask themselves, “Do I have a big life event coming up, such as marriage or retirement?” It’s critical to choose benefits based on present and future needs.
  • Make sure that employees review their benefits and fully understand them. Only half of employees said they thoroughly reviewed their benefits choices last year.

The survey also reveals how employees feel about their benefits:

  • Financial uncertainty: In contrast to decreasing unemployment numbers, American workers remain pessimistic about their financial future. Less than half feel in control of their finances. Even fewer expect their situations to improve in the next year (46% in 2015, compared to 52% in 2014). More than half are concerned about having enough money to cover out-of-pocket medical costs as well as meeting monthly living expenses and financial obligations. These worries that have increased every year since 2012.
  • Job Satisfaction: More than half of employees are satisfied with their jobs and are committed to the organizations’ goals. An increasing number plan to be with their companies a year from now.
  • Financial Benefits: 71% of employees consider work to be the foundation of their financial safety net. Sixty-two percent of employees want more financial security benefits. Millennials are more financially vulnerable compared to their counterparts. Gen Xrs say they are less secure than other generations.
  • Appreciation of benefits: Half of employees agree strongly that their benefits help them worry less about unexpected health and financial issues. Seventy percent of employees say that having customizable benefits would increase their loyalty to their employer.
  • Supplemental benefits: Employees continue to ask for a range of solutions, especially for more common benefits, such as medical, prescription, 401(k), dental, life, and vision care. Employers are keeping pace with many of their employees’ top benefit requests. However, there are large gaps in accident insurance, critical illness, and hospital indemnity. Most employers understand how non-medical benefits can provide financial protection, such as offsetting out-of-pocket medical expenses. Yet, only 47% of employees believe that supplemental health benefits can help close these gaps.
  • A streamlined plan design: Plan design, claims management, and implementation rank highly as advantages of streamlining the number of carriers that employers use.
  • Use of enrollment firms: Three-quarters of employers have positive attitudes towards enrollment firms. Seventy-one percent of employers say that working with an enrollment firm helped them improve benefit communications.
  • Wellness plans: More than two thirds of employees are interested in physical well-being programs that reward healthy behavior. This is especially true among Millennials (75%) and female employees (72%).
  • Retirement Benefits: Forty percent of employees say that having retiree benefits is a key reason to stay with their employer. Millennials feel the most strongly about this, probably due to their lack of financial confidence. About a third of employees plan to postpone retirement, an increase of 5% over 2015. Almost 6 in 10 employees plan to work or consult once retired. Of this 60%, 44% plan to work part-time.
  • Older workers: With today’s workers redefining what it means to be a retiree, employers must also redefine what retiree benefits look like in order to appeal to this rich reservoir of talent. For example, 63% of employees say that dental is a must-have retiree benefit while only 42% of employers offer it. Similar gaps can be found across other critical non-medical benefits, such as vision and life insurance. More than half of employees say that their employer does not offer any employer-paid non-medical benefits. With retiree benefits being such an important loyalty factor for many employees, employers have an opportunity to keep pace in 2016 and beyond.

Americans Want Personal Advice With Technology

Technology cannot easily replace human advice in financial planning, according to Northwestern Mutual’s 2016 Planning & Progress Study. When asked how they would prefer to get financial advice, 54% said the ideal solution combines a human relationship with technology while 33% prefer a human relationship above all else. The appetite for a fully automated (robo) solution appears low across all age groups, even for Millennials, with fewer than two in 10 opting for robo advice. Tim Schaefer of Northwestern Mutual said, “As people’s financial and personal lives become busier and more complex, they want expert guidance tailored to their needs and access anywhere at any time. Technology transforms the road map to financial security into a 24/7 financial GPS.”

The nearly 50% of respondents who had no interest in robo advice gave the following as their top reasons:

  • 48% want a human advisor who can answer questions and discuss options.
  • 40% don’t trust a robo advisor.
  • 38% value the knowledge and expertise that a human advisor can provide. Interestingly, this factor was most pronounced for Millennials, suggesting that even those who rely heavily on technology value human expertise in financial planning.
  • 50% of women are not interested in robo advice compared to 43% of men.

Wellness Plans Need More Personalization

The keys to maximizing a wellness plan is to offer personalization, provide rewards, and understand what employees want, according to a survey by Welltokget and the National Business Group on Health. The study, which is based on the responses of over 1,000 full-time employees at large companies, reveals the following:

  • 81% say their company wellness plan has improved their physical well-being.
  • 60% say that including family in wellness programs is likely to increase participation.
  • 37% of those who did not participate in the company’s wellness program did not find it relevant to them, and 20% didn’t know it was available.
  • 78% of those earning $200,000 more would engage in healthier behaviors if they got rewards as would 98% of all employees under 35 and 85% of those over 55.
  • 86% said the top motivators for improving their health came from colleagues, followed by their direct manager (57%).
  • 64% of Millennials said that their direct manager influenced them to improve their health compared to 51% of those 55 and older.
  • 24% of Millennials said HR influenced them to improve their health compared to 40% of those 55 and older.
  • 63% of households making less than $50,000 want employers to play a role in their financial well-being compared to 44% of those making $200,000 or more.
  • 60% of participants from 18 to 34 say that employers should be involved in financial health compared to less than half of those 45.
  • 58% of women say employers should play a role in employees’ financial health versus 48% of men.
  • 77% of employees say that their employers should play a role in helping them get cost effective care.
  • 74% say the employer should provide emotional/personal support resources.
  • 53% say employers should play a role in helping them stop unhealthy behaviors.
  • 53% say employers should help them manage financial issues.
  • 24% participate in emotional health benefits.
  • 37% participate in financial security programs.
  • 48% of employees participate in programs to help them improve their physical health.

Brian Marcotte, CEO and president of the National Business Group on Health said, “It is clear that employees can benefit from employer-sponsored programs aimed at improving physical, financial and emotional health, along with decision support resources to maximize their health care experience. The one size fits all approach to communications has proven ineffective in engaging employees and engagement is now the number one challenge facing employers. Personalization is the key. Emerging engagement platforms…shows great promise…by leveraging data, predictive analytics, and technology to reach people with personalized, timely, relevant, and actionable information.” For more information, visit welltok.com.

Consumers Resist Robo Advisors

Financial services firms may be banking on automated robo advisors, but consumers are not buying into the idea. In a new GfK Global survey, only 9% of consumers said they would be likely to use an investment advisory service that offered just digital (text or online chat) contact with human advisors. The 25 to 34 age group is most open to the idea (15%) while less than 5% of those 50 and above would embrace an all-digital service approach from their investment firms.

Tom Neri, managing director of GfK’s Financial Services team in North America said, “Financial service companies need to be cautious in deploying robo-advisor technology, making sure to provide their high-value customers with the service they need. A one-size-fits-all seems certain to alienate even young investors. Financial firms are betting on an increasingly automated customer service approach to help them stay lean in an unforgiving consumer marketplace. But even digitally native Millennials are only lukewarm to this vision when it comes to the difficult area of investments.”

Consumers are least open to completely automated customer service for investments and mortgages. They are slightly more willing to accept an all-digital service plan for checking and savings accounts. Not surprisingly, just 10% of those surveyed would trust a computer algorithm over a human to give financial advice. Trust in robo-advisors is highest among the 25-to-34 group (17%) and lowest among those age 65 and over (6%).

Thirty percent would pay more for access to a person for help with financial services, and 45% would not be willing to forgo live customer service in return for paying less. Consumers’ hesitation to embrace automated investment services may stem from disappointing experiences. Only 27% agree that it is easy to get the information they need from the websites of financial service firms

Healthcare Issues Among Millennials

Transamerica Center for Health Studies (TCHS) finds that Millennials are struggling with the cost of healthcare while facing some health issues at a young age. The survey reveals the following:

  • The most common reason that the 11% of uninsured Millennials didn’t get coverage before the ACA deadline is that they did not know how to apply for insurance.
  • 60% of the uninsured are women; and 68% of the uninsured are unemployed.
  • 21% of Millennials can’t afford their routine healthcare expenses. An additional 26% can afford it, but with difficulty.
  • 70% say that cost is very important when looking for healthcare.
  • 66% of Millennials say that a $200 a month premium is not affordable.
  • Nearly half of Millennials skip care to reduce their healthcare costs.
  • More than half of Millennials have a chronic illness or health condition. The most common conditions are depression (17%), weight issues (15% overweight and 7% obesity), and anxiety disorders (14%).
  • 64% rely on their mom/step-mom as their primary source for health advice and healthcare guidance; 36% rely on their dad/step-dad; and 26% rely on their spouse or partner.

A Small Boost in Millennials’ Financial Health Has a Lifetime Impact

Improving financial wellness of younger employees from four to a five on a 10-point scale translates into a 12% improvement in projected retirement savings. The report by Financial Finesse is based on over 35,000 financial wellness assessments completed in 2014 and 2015. An improvement from four to six brings a 27% improvement in projected retirement savings. The report reveals that debt is a growing concern, with many employees at risk of becoming significantly over-leveraged. This could be a problem for older employees who may carry consumer debt into retirement. Baby Boomers had the biggest decrease in the percentage that have a plan to pay off their debt (64% to 58%) and the biggest increase in those that are experiencing late fees (11% to 15%). Fifty-five percent of Generation X participants said getting out of debt is a top-three priority. Fifty-three percent said that lacking emergency savings is a top-three vulnerability. Forty-three percent of Millennials have serious debt, making it a top-three vulnerability. A higher percentage of employees across all generations are running a retirement calculator, checking credit scores, and projecting college expenses.

Employees Want Financial Guidance and Benefits

Forty-six percent of employees expect their financial situation to get better in the next year, and they’re turning to the workplace for financial education, according to a recent MetLife study. These financial concerns may be making employees more loyal, with 45% of employees planning to work for their current employer 12 months from now, compared to 41% last year. The study finds the following:

  • 47% of employees say that non-medical benefits can help limit their out-of-pocket medical expenses.
  • 52% of Millennials understand life insurance compared to 69% of Baby Boomers.
  • 38% of Millennials understand long term disability insurance compared to 57% of Baby Boomers.
  • 68% of Millennials prefer one-on-one consultations with a benefit expert, compared to 62% of Gen Xrs and 57% of Baby Boomers.
  • 44% of Millennials want their employer to help them solve their financial concerns compared to 20% of Baby Boomers
  • 75% of Millennials say employers have a responsibility for the financial well-being of employees.
  • 62% of employees are looking to their employer for more help in achieving financial security through employee benefits, compared to 49% in 2011.
  • 44% of employees feel in control of their finances.
  • 65% of Millennial employees don’t have a savings cushion of three months of salary.

The study finds that strong communication is a key driver of employee confidence when selecting benefits. The most effective resources are one-on-one consultation. Todd Katz, executive vice president, Group, Voluntary & Worksite Benefits, at MetLife said, “Employers looking to harness the power of one-on-one consultations can turn to outside experts such as brokers, consultants, and enrollment communications firms. For employers, this is an opportunity to evolve into a more consultative role and provide meaningful education and training for employees, while engendering loyalty. Helping employees understand the value of their benefits through engaging communications is critical for employee and for the workplace. If employees fully understand their benefit options, they’ll make better purchasing decisions and decrease their financial stress. To alleviate confusion about benefits, it’s critical that employers…enable their employees to make informed decisions about which benefits best suit their needs. This includes providing a variety of decision-support resources and offerings to help them make educated benefit decisions.”

Who’s the Boss of Workplace Culture?

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HR professionals, managers, and employees have very different opinions about workplace culture: who drives it, what’s important to creating a great culture, and what can destroy it, according to a study by Kronos Inc. and WorkplaceTrends.com. The survey reveals the following:

Who Defines Workplace Culture?

  • About one-third of HR professionals say that the head of HR defines the culture while only 10% of managers and 3% of employees agree.
  • 26% of managers say their executive team defines the culture while only 11% of HR professionals and 9% of employees agree.
  • 29% of employees say the employees define workplace culture while only 9% of HR professionals and 13% of managers agree.
  • 40% of Millennial employees say that employees define the culture – an indication of an evolving view of workplace culture where employees feel they have more power.
  • 28% of employees say that no one defines the workplace culture while only 5% of HR professionals and 7% agree.

What Improves Workplace Culture

Employees say that the three things that matter most to having a good workplace culture are pay (50%), coworkers who respect and support each another (42%), and work-life balance (40%). HR and managers are off base on their assumptions. HR professionals say the top three things that matter to employes are managers and executives who lead by example, employee benefits, and a shared mission and values. Managers say say that what matters most to employees are managers and executives who lead by example, a shared mission and values, an emphasis on taking care of customers. Twenty-five percent of HR professionals and 29% of managers say that pay is a top factor in how employees view workplace culture.

What Kills Workplace Culture

HR professionals and managers say that a high-stress environment and company growth are the most damaging to workplace culture. Employees say that not having enough staff to support goals, dealing with unhappy/disengaged workers who poison the well, and having poor employee/manager relationships are most damaging.

Other Factors

The survey also reveals that technology, job hopping, and Glassdoor-like pressure have changed the culture. Forty-three percent of HR professionals and 39% of managers say that using technology to improve culture is the biggest difference compared to a decade ago. Forty percent of HR leaders say there is more pressure to maintain an attractive culture for recruiting because more information about organizations can be easily found on sites like glassdoor.com. Twenty-three percent of HR professionals and 22% of managers say that their employees switch jobs too much to establish a solid culture.
Seventy-two percent of HR professionals and 61%, managers say that training and development improve workplace culture. Forty-five percent of HR professionals and 46% managers say that getting feedback from employees and acting on it improves workplace culture.

Dan Schawbel, founder, WorkplaceTrends says, “Among all of this interesting data, what struck me most is that 40% of Millennial employees believe that employees create the workplace culture, compared to 29% of employees. This is important. Each generation changes the workplace as they rise up the ranks. Millennials…believe the power to impact workplace culture lies predominantly with the people who do the work. HR professionals and managers should take note of this, look for ways to involve employees in the development of workplace culture, and be on the lookout for disengaged workers who may be poisoning the well – they wield more power than you may think.”

Younger Consumers Value Agents

A survey by Applied Systems and InVEST finds that Millennial (18-34) and Gen Z (16-19) consumers value in-person meetings with insurance agents. They value insurance firms that provide the customer-centric, 24/7 experiences they have become accustomed to in other industries. Reid French, chief executive officer of Applied System said, “Independent agencies need to invest in technology to provide multi-channel customer service experiences and to establish an innovative workplace to attract the next waves of insurance consumers and professionals.” The study also finds the following:

  • 55% of Gen Zs and 37% of Millennials prefer to purchase auto insurance in-person.
  • 29% for Gen Zs and 35% of Millennials purchase auto insurance online.
  • Once they have insurance, Gen Zs prefer to meet in person. (That may include meetings via Skype or FaceTime) or over the phone. Most Millennials are happy to communicate with their agent over the phone or online.
  • 51% Gen Zs and 54% of Millennials found their insurance provider based on referrals. Search engines and online reviews were the second and third most ranking sources of information on their insurance provider.
  • 18% of Gen Zs and 37% of Millennials prefer communicating with their insurance provider via their website.
  • For Gen Zs and Millennials, 24/7 access to information and customer service, particularly via a mobile app, is important in choosing an insurance provider. They expect 24/7 customer service via multiple channels.
  • 97% of Gen Zs and Millennials say that 24/7 customer service is an important part of their decision when purchasing insurance.
  • 88% of Gen Zs say that access to information and service via a mobile app as important.
  • 94% of Gen Zs respondents consider having flexibility to work remotely to be important in their choice of an employer; 93% also consider working for an innovative company to be important.
  • More than 60% of Gen Zs and Millennials are not too familiar with the insurance industry as providing future career opportunities.

Retirement plans key to millennial saving, poll indicates

Only 43% of millennials without access to a retirement plan via work say they are consistent in saving for retirement, compared with about three-fourths of millennials who have access to such a plan, a poll by Young Invincibles found. MarketWatch (2/17)

Last Updated 12/01/2021

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