Younger generations driving lifestyle benefits

This article was published on February 25, 2019 on Employee Benefit Adviser written by Kayla Webster.

Younger generations are often characterized as entitled and demanding — but that self-confidence in their work is pushing companies to adopt benefits outside the traditional healthcare and retirement packages.

By 2025, millennials will make up 75% of the U.S. workforce, according to a study by Forbes. The first wave of Generation Z — millennials’ younger siblings — graduated college and entered the workforce last year. With these younger generations flooding the workplace, benefit advisers need to steer clients toward innovative benefits to attract and retain talent, according to panelists during a lifestyle benefits discussion at Workplace Benefits Renaissance, a broker convention hosted by Employee Benefit Adviser.

“Millennials came into the workforce with a level of entitlement — which is actually a good thing,” said Lindsay Ryan Bailey, founder and CEO of Fitpros, during the panel discussion. “They’re bringing their outside life into the workplace because they value being a well-rounded person.”

Catering benefits to younger generations doesn’t necessarily exclude the older ones, the panelists said, in a discussion led by Employee Benefit Adviser Associate Editor Caroline Hroncich. Older generations are accustomed to receiving traditional benefits, but that doesn’t mean they won’t appreciate new ones introduced by younger generations.

“Baby boomers put their heads down and get stuff done without asking for more — that’s just how they’ve always done things,” Bailey said. “But they see what millennials are getting and are demanding the same.”

In a job market where there are more vacant positions than available talent to fill them, the panelists said it’s important now, more than ever, to advise clients to pursue lifestyle benefits. While a comprehensive medical and retirement package is attractive, benefits that help employees live a more balanced life will attract and retain the best employees, the panelists said.

“Once you’ve taken care of their basic needs, have clients look at [lifestyle benefits],” said Dave Freedman, general manager of group plans at LegalZoom. “These benefits demonstrate to workers that the employer has their back.”

The most attractive lifestyle benefits are wellness centered, the panelists said. Wellness benefits include everything from gym memberships, maternity and paternity leave, flexible hours and experiences like acupuncture and facials. But no matter which program employers decide to offer, if it’s not easily accessible, employees won’t use it, the panel said.

“Traditional gym memberships can be a nightmare with all the paperwork,” said Paul O’Reilly-Hyland, CEO and founder of Zeamo, a digital company connecting users with gym memberships. “[Younger employees] want easy access and choices — they don’t want to be locked into contracts.

Freedman said brokers should suggest clients offer benefits catered to people based on life stages. He says there are four distinct stages: Starting out, planting roots, career growth and retirement. Providing benefits that help entry level employees pay down student debt, buy their first car or rent their first apartment will give companies access to the best new talent.

To retain older employees, Freedman suggests offering programs to help employees buy their first house, in addition to offering time off to bond with their child when they start having families. The career growth phase is when most divorces happen and kids start going to college, Freedman said. Offering legal and financial planning services can help reduce employee burdens in these situations. And, of course, offering a comprehensive retirement plan is a great incentive for employees to stay with a company, Freedman said.

Clients may balk at the additional costs of implementing lifestyle benefits, but they help safeguard against low employee morale and job turnover. Replacing existing employees can cost companies significant amounts of money, the panelists said.

“Offering these benefits is a soft dollar investment,” Freedman said. “Studies show it helps companies save money, but employers have to be in the mind-set that this is the right thing to do.”

Benefits Communication Growing in Importance and Difficulty

This article was published on February 25, 2016 by the International Foundation of Employee Benefits, written by Neil Mrkvicka.

Half of all organizations responding to the Benefits Communication Survey say the number of participant questions they receive regarding benefits has increased in the past two years. Adding to the frustration, organizations identify their top challenge with benefits communication as participants not opening/reading materials. Despite challenges, benefits communication remains a high priority for most respondents.

A total of 341 organizations of a variety of sizes, industries/jurisdictions and regions across the United States and Canada participated in the survey. Key findings include:

What Is the Current State of Benefits Communication?

Nearly two in five surveyed organizations (38%) have budgets specifically devoted to benefits communication, and one-quarter of these organizations (25%) likely will increase their budgets next year. A few organizations shared the size of their benefits communications budgets, which ranged from 3% to 10% of the total benefits budget.

Organizations are more likely to handle benefits communication in-house than to outsource, and more than one-third (35%) have staff specifically dedicated to benefits communications. Organizations are more likely to outsource via consultants, administrators and vendors (31%) compared with attorneys (6%). Large organizations are more likely than small organizations to have budgets and staff specifically dedicated to benefits communication.

The most common benefits communication topics are:

• Retirement benefits education (74%)
• Health care benefits literacy (74%)
• Wellness and mental health (72%)

The most frequently used benefits communications channels include:

• Printed mail to homes (89%)
• E-mail (73%)
• Print distributed on site (69%)
• Internal websites (66%)
• External websites (58%)
• Videos (29%)
• Social media (23%)
• Texts (10%)
• Robocalls (9%)
• Games (7%)

Two-thirds of all organizations (67%) reach out to retirees with benefits communication, 53% engage spouses/dependents and 52% personalize communication materials. The most common benefits communications strategies organizations use are simplifying complicated content (85%), year-round communication (73%), reaching out to retirees with benefits communication (67%), leveraging word of mouth (63%), engaging spouses/dependents (53%) and personalizing communication materials (52%). Less than half of all organizations customize communication benefits to multiple generations (49.6%), measure the effectiveness of communications (43%), communicate by life stage (41%) or communicate in multiple languages (31%).

What Are the Goals and Challenges?

Survey findings reveal that 65% of organizations regard benefits communication as a high priority (28% very high and 36% somewhat high). However, the amount of time spent on various benefits communication efforts doesn’t always match up with organizations’ priorities. For example, 89% of organizations report helping participants understand and use their benefits as a top goal, but only 70% say that effort occupies most of their time. Fifty-two percent cite getting individuals to understand the value of benefits as a top goal, but 48% say it takes most of their time. Helping participants make smarter personal health and/or finance decisions is the third most cited goal (49%), with 30% saying it occupies most of their time. Data show how reactively responding to participant questions (57%) seems to be stealing time from organizations’ more proactive benefits communication goals.

Each of the top challenges with benefits communication is centered on participants: Participants do not open/read materials (80%), don’t understand materials (49%) and do not perceive value in their benefits (31%). (Each is cited far more frequently than internal challenges such as benefits staff time, resources or expertise.) Large organizations are more likely to say participants not opening/reading communication materials is a top challenge. U.S. organizations are far more likely to view complying with mandated benefits communication as a top goal, challenge and consumer of time, compared with Canadian organizations.

Few organizations believe their participants have a very high (3%) or somewhat high (16%) level of benefits understanding. Half (49%) say the number of participant questions regarding benefits has increased in the past two years, compared with just 7% reporting a decrease in questions. U.S. organizations are more likely to say the number of participant benefit questions has increased in the last two years compared with those from Canada. Some of the most common benefits topics about which organizations receive participant questions are the Affordable Care Act, health reimbursement arrangements and health savings accounts, plan design changes, accessing retirement funds and health care eligibility, coverage and costs.

The International Foundation deployed Benefits Communication Survey in December 2015 to member organizations across the U.S. and Canada. For a more in-depth analysis and data on which communication approaches are working the best check out the full results here.

Benefit Communication: Losing Can Be a Winning Strategy

The below article was posted by the International Foundation of Employee Benefit Plans on April 22, 2016 and was written by Pat Bonner, Ph.D., CEBS.

If you are a baseball fan, you are probably familiar with this quote often credited to legendary baseball coach Sparky Anderson—”Losing hurts twice as bad as winning feels good.” I’ve got to wonder whether Sparky knew how right he was. His words are a handy summary of one of the chief tenets of behavioral economics—loss aversion—and good advice for those of us in the benefits field who want to change behavior.

Decades of research have confirmed that losing hurts more than winning feels good. In fact, most studies indicate losses are twice as powerful, psychologically, as gains. People are highly motivated to avoid what they consider a loss.

Have you considered how you might take advantage of this phenomenon in benefits communication? When you want to change worker behavior, tell them what they might lose if they don’t take action. Want to get workers to save more for retirement? Consider these messages:

• Just say NO! Stop missing out on your retirement plan match.
• Would you rather pay yourself or Uncle Sam? Increase your retirement savings and cut your taxes.

Consider this health benefits story from Eric M. Parmenter, vice president, employer solutions, Evolent Health in Arlington, Virginia. Eric tells how two different large hospital/health clients budgeted $30 per month for each employee who completed a health risk assessment (HRA). While the cost was the same, one client used the $30 as a carrot (a gain) while the other used a $30 stick (a loss).

Client A told employees it would provide a $30 discount on health premiums to those who completed the HRA. The $30 became the carrot for taking action. In contrast, Client B told its workers they would have to contribute an extra $30 for their health benefits if they chose not to complete the HRA—This $30 penalty was the stick, or penalty, that employees would incur. Both clients were able to improve the number of workers completing the HRA, but Client B, who framed the message as a loss, had a 95% HRA completion rate, compared with 80% for Client A who communicated what employees would gain.

Framing a benefits message as a gain or loss can be effective, but it appears human beings are wired more to avoid the loss than seek the gain.

Tap Into Data for Tailored Benefit Communication

The below article was posted by the International Foundation of Employee Benefit Plans on October 27, 2016 and was written by Kathy Bergstrom, CEBS.

Tailoring pension and benefits messages by age or generation is a good first step toward helping plan members make better decisions. But that may not go far enough. “An evolution is coming to more personalized retirement and benefit plan communications,” said Michelle Oram, CEBS, director of product development at Manulife in Waterloo, Ontario. Oram made the remarks during her presentation “Financial Education—Let’s Get Personal” at the 35th Annual ISCEBS Employee Benefits Symposium in September in Baltimore, Maryland.

“Now we segment communications based on age or generation. It’s a step in the right direction, but painting everyone with four little brushes still generalizes,” she said. The pitfall is that messages are based on assumptions rather than behavioral data. “Employee needs are more about personal circumstances than age.”

Oram gave an example of two 55-year-olds who, even though they’re the same age, have different life situations and financial priorities.

Meet Dave. He is 55, is married, has grown children and thinks about retirement a lot.

Dave’s financial priorities: maintaining his lifestyle in retirement, saving for retirement and saving for his family’s future.

What Dave needs: retirement lifestyle coaching, retirement income projections, retirement planning advice and estate planning support.

Key message for Dave: Deposit his regular bonus into his RRSP.

Meet Marilyn. Also 55, she is divorced, has younger dependent children and is not ready to retire.

Marilyn’s financial priorities: paying for her kids’ education, saving for retirement and reducing debt.

What Marilyn needs: retirement income projections, tips to get on track and a financial wellness program that includes debt management.

Key message for Marilyn: Increase her regular contribution to her retirement plan.

But how does a plan sponsor figure this out without invading someone’s privacy? Data, Oram said, and plan sponsors and administrators already have a lot of it.

They have basic demographic information such as the age and gender of their employees. They also have information on life events from plan enrollment such as when someone gets married or divorced or has a child.

They have employment data such as job title, salary and promotions, and they have behavioral data from retirement plans such as investment selections and whether employees maximize the employer match.

With that data in hand, plans should identify key messages and actions. For example, they can look at who doesn’t take full advantage of the match and create a personalized message motivating them to up their contributions.

They can look at who has deposited bonuses in the past and craft an e-mail encouraging those employees to do so again.

Messages must be personal, however, to catch employees’ attention, she said.

Strategies that work include e-mails with a meaningful sender name and subject line and with a link to a personalized video or URL outlining the impact the desired behaviour will have on the employee’s retirement plan.

“Benefits communications are competing with a lot of personalized messages your employees see every day,” Oram said.

How to Get Employees to Use Their Preventive Care

The article below was published on July 21, 2016 by the International Foundation of Employee Benefit Plans, written by Brenda Hofmann.

Preventive care is vital to keep your employees healthy. The more employees take advantage of available preventive care, the more cost-effective their care becomes. They stay healthy, you save on health care costs—It’s a win-win for employees and employers.

You know that the Affordable Care Act (ACA) requires that health plans cover recommended preventive services at no cost to the individual, but do your employees? If you’re not already doing so, consider communicating to your workforce the free preventive care benefits that are available to them.

You may want to adjust the language to best fit your plan or workforce, but here are some samples of communication to get you started:

Take Advantage of Free Preventive Care

Who: You! Men, women and children are all covered.

What: Depending on your age, you may have access to—at no cost to you—preventive services such as:

• Blood pressure, diabetes and cholesterol tests
• Many cancer screenings, including mammograms and colonoscopies
• Counseling on topics such as quitting smoking, losing weight, eating healthfully, treating depression and reducing alcohol use
• Regular well-baby and well-child visits, from birth to age 21
• Routine vaccinations against diseases such as measles, polio and meningitis
• Counseling, screening and vaccines to ensure healthy pregnancies

See the full list at Healthcare.gov.

When: Now. These preventive services are already covered under our plan.

Where: Preventive services are free when delivered by an in-network doctor.

Why: Preventive care screening can detect disease in the early stages when it is most treatable. Following preventive care guidelines, along with the advice of your doctor, can help you stay healthy.

How: Know what’s considered preventive care and review the guidelines. For example, although a colonoscopy is a preventive care screening, it’s only covered for people aged 50 or older. Additionally, colonoscopies that are done to evaluate specific problems are usually classified as diagnostic procedures (not screenings) and are not covered.

Avoid unexpected costs by clearly stating when you make your appointment that your visit is for a covered preventive care service. For example, if you’re making your well-woman visit on the phone, say “I’m making an appointment for my free preventive care well-woman visit.”

Also, medical complaints aren’t preventive. If you discuss other issues with your doctor, the visit is no longer preventive and you’ll be charged a fee. For example, if during your well-woman visit, your doctor does blood work for thyroid problems you are having, these additional services won’t be covered under free preventive care. Don’t hesitate to ask your doctor whether screenings he or she recommends will cost you.