In days past, open enrollment could be a relatively straightforward experience, both for employers and employees. Benefits choices were few, requiring simple communications and little decision-making. With the era of one-size-fits-all benefits packages almost a thing of the past, however, open enrollment has become a big deal. Employers devote considerable time and resources in selecting an array of benefits to offer to employees, along with the vendors to provide them. Employees need to figure out which of the benefits to choose, considering both what they think they need, and the cost.
According to a survey from MetLife, employees are looking for more help during open enrollment to pick the benefits that are right for them. Specifically, 59% would like their employer to suggest benefits that would be appropriate for someone in their “life stage” — single, married without kids, new family, established family, or nearing retirement. Other than a spouse, employees said they were most likely to view someone in their same life stage as the most important source of advice (22%), rather than HR (14%) or a professional advisor (11%).
Young singles were most interested in guidance, with 78% of those seeking HR advice saying they would like their employer to suggest life-stage guidelines to help them in benefits selection. According to life-stage guidance from MetLife for this group, having the money to survive an income loss should be a pivotal concern.
For dual income/no kids employees (DINKs), both disability and life insurance are key benefits, since the couple has become accustomed to relying on two incomes. Employees in this group also may be seeking a tax break, which pretax 401(k) plan contributions can provide.
Employees with new families should do a complete and careful review of their benefits during open enrollment, since the addition of dependents would have required a change in coverage categories, and also brought on the need for types of benefits that previously may not have seemed important, such as life insurance and dependent care.
Established families might be in the habit of knowing what benefits they need, but as family members get older future financial concerns loom closer on the horizon. Employees in this life stage should check to make sure that they’re on track for saving for expenses such as college education for the kids, long-term care and retirement, using any tax-favored vehicles or insurance products available to them through their employers.
For many employees in the pre-retirement life stage, it’s catch-up time. More than half (56%) of pre-retirees in the MetLife survey said they were somewhat or significantly behind where they wanted to be with their retirement savings. With dependents’ financial needs lessening, many pre-retirees are able to make larger 401(k) plan contributions. Though employees aren’t limited to open enrollment for making 401(k) plan changes, with the benefits-examination atmosphere that open enrollment inspires, it’s a good time to remind employees to review where their accounts stand. Also, pre-retirees who haven’t considered long-term care insurance might want to give it a serious look.
The MetLife survey also offered these observations:
- Of the surveyed employees who wanted their employer to suggest the right benefits based on their life stage, 84% said they would be willing to share personal information — such as their age, marital status, number of children and income — that would allow the company’s benefits insurer or provider to offer customized advice on benefits selection.
- Only 51% of the surveyed employees said they had actually read the entire open enrollment package.
- Employees tended to hold their employer responsible for a bad open enrollment experience — 58% of those who felt negative or not confident about their enrollment decisions blamed their employer for this feeling.
This survey data provides food for thought on how to make the most out of open enrollment. Although open enrollment isn’t your only time to communicate with employees, it certainly is one of the most significant. Building employee goodwill by providing tools to help them make the best benefits choices can pay off in greater employee satisfaction throughout the year.
