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Fine-Tune Benefits Before Open Enrollment

Gauge employees' needs when revisiting the benefits menu

July 18, 2022 | Stephen Miller, CEBS

A woman sitting at a desk with a calculator and money.

Open enrollment this fall for 2023 employee benefits is an opportunity for organizations to showcase the value of the benefits packages they provide to employees—and to help stem high turnover rates.

If current offerings aren't competitive, this is the time to think about revising the benefits menu.

According to HR consultancy Mercer's Survey on Health and Benefit Strategies for 2023, over two-thirds of responding employers plan to enhance health and benefits offerings in 2023 to improve attraction and retention or better meet employee needs. The survey was conducted from April 26 to May 13, 2022, with 708 U.S. organizations participating.

"Employers are grappling with finding a delicate balance between what they need to do for talent attraction and retention in tight labor markets versus the challenges of the current economic environment," said Tracy Watts, senior partner and national leader for U.S. health policy at Mercer. Employers need to be "thoughtful and specific about their benefits enhancements to ensure they will get a return on their investment. This requires an understanding of the values and needs of their unique workforce."

Health Care Affordability

Health care affordability is a top concern for many workers, in particular low-wage earners or those coping with a chronic medical condition. While high-deductible health plans have grown rapidly over the past decade, employers have recognized that these plans aren't a good fit for some employees. Mercer's survey found that for 2023:

41 percent of surveyed employers will provide a low-deductible medical plan option or even a no-deductible plan with just premiums and co-pays.

11 percent will offer free employee-only coverage (i.e., no premium deductions) for at least one medical plan option

While coverage at no cost to employees historically has been more common among small employers (29 percent currently offer it), it is a newer strategy for large employers.

Health benefits strategies also are focused on supporting the emotional and financial well-being of employees, with over half of large employers (52 percent) planning to offer virtual mental health care in 2023.

The majority of survey respondents will offer virtual care solutions beyond telemedicine for physical health care in 2023, with over half of large employers (52 percent) offering virtual behavioral/mental health care services, Mercer found.

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Family-Forming Benefits

Among other benefits to become more common, nearly one-third of large employers surveyed will offer access to fertility treatment coverage and adoption and surrogacy benefits by 2023.

Across U.S. employers of all sizes, 37 percent of survey respondents will provide at least one specialized benefit or resource to support reproductive health, which could include benefits to support high-risk pregnancies, lactation, pre-conception family planning, pregnancy loss or family-planning support during menopause.

"In today's competitive labor market, employees are able to leave jobs for others offering only slightly higher pay," Watts said. "Employers are looking to create a stronger bond with this workforce by offering health and well-being benefits and resources that their employees will value."

Gauging Employees' Needs and Interests

"Many HR leaders are unaware of the nature and extent of their employees' needs and resource challenges," according to Liddy Romero, founder and CEO of the WorkLife Partnership, a Denver-based nonprofit whose Resource Navigator Service helps businesses address the problems employees are facing, and Valerie Wendell, former chief innovation officer at WorkLife Partnership.

"Employee benefits are not regularly evaluated for their impact on employees and the extent to which the benefits contribute to a culture of care," Romero and Wendell noted, adding that benefits-utilization data is often the only metric benefit managers look at.

The role midlevel managers play as "first responders" when frontline employees are struggling with challenges "is often unrecognized and overlooked as an important source of insight," they pointed out.

Romero and Wendell recommend that employers better understand their workers by:

Ensuring benefit providers are offering meaningful insights on how employees are using their benefits.

Surveying employees on whether offered benefits meet the different challenges faced by a diverse workforce. Protect employee confidentiality by keeping respondents anonymous.

Surveying midlevel managers, who have some of the best insight into the health and struggle of their direct reports (again, keeping it anonymous).

Crystal Granger, SHRM-CP, senior benefit administrator at Bob's Red Mill Natural Foods Inc. in Milwaukie, Ore., noted that "during this year's renewal, we've taken a look at our benefits and tried to ensure that what we're offering is what people want, and not just not what we think they need."

She added that her HR team is "doing more internal surveys as we look at renewals to make sure we are staying ahead of that curve."

The Society for Human Resource Management's Employee Survey: General Benefits template (accessible by members only) may be helpful.

Highlight Value to Employees

"Employee benefits are no longer just table stakes; they're a differentiator. This gives employers an opportunity to put their benefits in the spotlight during benefits enrollment season," wrote Abby Aldrich, director of employee experience at consultancy WTW (formerly Willis Towers Watson), and Casey Hauch, managing director of communication and change management at the firm.

The annual benefits enrollment period is "a time when employers have a captive audience with employees," making it "the perfect time to remind employees of the array of benefits options you offer and the value that they provide," Aldrich and Hauch noted.

For the upcoming benefits enrollment season, they recommended that employers:

• Emphasize the security that the benefits package provides and how it supports employees throughout the year.

"Beyond health insurance, employees are looking for emotional support [and] resources to bolster their resilience and financial protection," Aldrich and Hauch explained. "Many employers are demonstrating their commitment to emotional security by removing barriers to mental health care and offering care and self-help tools at little to no cost."

Options such as lifestyle spending accounts (a lump sum for which employees choose how they want to allocate benefits dollars) also are becoming more common, they noted.

• Have a multifaceted communications strategy to educate employees and reach them in ways and at times that work best for them.

Think about how to reach various employee types using targeted and personalized communications tactics, the consultants advised, because "employee confidence in benefits selections is strongly linked to effective communication, support and tools."

Prior to the enrollment window, "organizations are inviting employees to learn about their benefits options two to three weeks in advance of decision-making time, making it easy to access information when it works best for them," Aldrich and Hauch noted.

They suggested that HR departments embed a decision pathway tool into their communication or have a chatbot ready to answer questions no matter the time of day. They also said employers should make it easy to contact insurance carriers, service centers or HR partners by providing the phone numbers for people to call and websites for self-help.

"Providing security, giving choice and making it easy are strategies that will garner trust with your employees," Aldrich and Hauch advised.

Related SHRM Articles:

Open Enrollment Planning for Post-Pandemic Workplaces Gets Under Way, SHRM Online, July 2022

Visit SHRM's resource page for Open Enrollment.