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Benefits spending is the second-largest cost category for employers behind salaries. However, a significant portion of employees still don’t fully understand what is — and isn’t — covered by their benefits.
This lack of clarity on benefits can have costly implications for employers. An employee mistakenly seeking care for services not covered under an employer plan could increase healthcare costs. Misuse of benefits can also signal that employees may not see the value of benefits offered and thus consider employment at companies where the benefits are perceived as more valuable.
To give employees a full view of their benefits and how they can be used, employers should consider active enrollment, whereby employees are required to select or opt into benefits during each enrollment period. Having employees make decisions about their benefits more actively can increase the likelihood that they know how to appropriately use them. And they can pick the right supplemental or voluntary benefits to close gaps, if any exist, in their current coverage. Ultimately, core and voluntary benefits provide value only when they’re well understood and thus appropriately used by employees.
For active enrollment to be successful, employers need to communicate with employees regularly about any changes in offerings, explain what those changes mean, and make it easy to enroll. These tasks can be accomplished with the right combination of emerging and established technologies, good connectivity and accessibility, and data science capabilities. With an optimized active enrollment strategy, employers can enjoy an improved return on investment (ROI) on benefits offerings and higher employee engagement.
The Power of Technology, Connectivity and Data
The proliferation of the Amazon-like digital experience, with recommendations and reviews accessible at the click of a button, has shaped expectations across all areas of life — including benefits enrollment. Based on our experience, there are five actions that employers can take to increase employee engagement, improve communication and provide clarity around their benefits to make active enrollment more effective than ever.
1. Find a third-party provider with proven application programming interface (API) integration. Some employers may build and manage their own integrations with their benefits administration system for enrollment. Not only can that approach be costly and unwieldy, but also the system interface often isn’t as user-friendly as employees are used to, resulting in a poor user experience for both HR and the employees.
Advanced third-party providers are investing in API integrations that allow benefits systems to talk to each other in real-time and exchange data between the enrollment platform and the third-party system. Because these systems can talk with one another in real-time, they no longer require complex data files and back-end interfaces.
Workday, for example, rolled out an API in 2017, enabling brokers to plug in market-leading enrollment tools for their clients. This allows employees to see a clean, easy-to-use, employer-branded interface where they can enroll in their core and voluntary benefits, review options and even return to the portal later if interrupted. Their data is seamlessly sent back into Workday. From the employee view, it’s as if they enrolled in one system.
2. Make mobile enrollment accessible. Optimizing for mobile enrollment is a must for employers. Because people own smartphones, they’ve become accustomed to getting information on demand. Having benefits information in the palms of their hands can make it easier for employees to review packages when convenient.
In industries such as manufacturing, where a significant portion of the workforce works in production, employees may not have access to a company computer (or have a company email alias) with which to enroll. Even in industries where employees do have work computers, they may prefer to look at benefits at home — perhaps with a partner — and are more likely to do so on their mobile phones. According to Aon research, many companies are seeing mobile enrollment figures hit 10% or higher. When selecting a platform or integration partner, employers should ensure they are optimized for mobile.
3. Engage and communicate with employees through decision-support tools. While APIs are important, employers need a system that can engage and educate their employees through a variety of different tools. It’s not uncommon for employees to compare different benefits options or calculate how much they are spending out of pocket with different plans. Digital calculators and comparison charts can fill that need, helping employees explore different packages and close coverage gaps.
Video conferencing and web chatting tools are also critical in enabling HR administrators to help employees enroll in benefits or learn more about a product. Employees who have a question about a benefit can interact with administrators in real-time to get their questions resolved quickly. And employers can use these tools to support their enrollment communications strategies as well. According to a 2020 Aon Pulse Survey, 77% of employers are using web and video conferencing to distribute employee messaging. In the age of working remotely, these tools are more important than ever.
4. Use data and analytics to tailor offerings. Data and analytics have quickly become integral to benefits management; most employers likely already use data and analytics in some form across their benefits planning. With the help of technology integration and connectivity, companies can craft targeted employee education and messaging strategies to encourage participation in active enrollment.
Access to enrollment data also helps employers decide what benefits to offer in the future or how to repackage them so their products better address employees’ needs. Companies can use data and analytics to assess the types of claims that employees submit, which can help determine whether they need to adjust their coverage. The more targeted an employer’s benefits are to its population, the more likely employees are to see the value in their benefits and complete active enrollment.
5. Target and personalize communications. Many employers don’t start communicating early enough about active enrollment, and their messaging isn’t targeted. This is a missed opportunity. Employee data and analytics can help organizations better segment their populations and thus personalize their communication methods (such as educational messages about benefits) and channels. For instance, an employer could target millennials with a specific condition and create a targeted campaign that discusses benefits that address that need in the language most likely to resonate with that audience. Population segments may also determine the right channel for communication. For instance, many millennials prefer social media and texting, so it may be easier for employers to connect with them through those channels. Employers might also need to create versions of their messages in other languages, depending on their population demographics.
Employees who haven’t enrolled in benefits can get communications that emphasize the penalties of not enrolling, with a countdown to the active enrollment close date. Aon has had success supporting companies on their messaging campaigns; in one case, a retail company got 90% of its employees to complete the enrollment process, which included education and communications campaigns in addition to the actual enrollment.
Active enrollment is a significant opportunity for employers to provide more value to their employees through benefits, but improving ROI requires a strategic approach. By planning active enrollment strategies early in the year; being thoughtful about technology and digital tools; and developing smarter, targeted communication methods, employers can prove the value of their plans and get greater employee engagement and improve overall coverage.