October 3, 2023

Inflation — it is as much a part of life as death and taxes. All jokes aside, inflation can create significant strain for many employees. As we approach open enrollment, inflation could impact choices employees make when it comes to their benefits.

With limited financial resources, employees are likely to prioritize the benefits that matter the most and search for ways to optimize the money they spend on those offerings. As a result, this year’s open enrollment may be more challenging than usual for employers and benefits providers.

Inflation’s Impact

Each year, the Hartford Future of Benefits Pulse Survey gauges the financial stress of U.S. workers. This year, 63% feel their financial stress has increased over the past year. As they prepare for another recession, employees are making changes to their financial priorities.

  • Cutting back on daily expenses (40%)
  • Paying off debt (30%)
  • Increasing contributions to savings or investment accounts (23%)
  • Seeking a higher-paying job (19%)
  • Taking on a second job to increase household income (17%)

Due to the financial stress inflation is placing on employees, they will turn to their employers to help them optimize their benefits selections. Retirement savings, health care, health savings accounts and voluntary benefits all play a role in felt financial stability. As more employees are keeping a close eye on their hard-earned dollars, they may spend more time reviewing their benefits selections than in previous years.

Navigating Open Enrollment

Despite wanting to optimize what they spend on their benefits, employees need support and guidance from their employers. Health care and benefits are complex, and navigating the selection process and making educated adjustments can be challenging. It is often simpler for employees to make the same benefits choices as they did in the prior year.

In fact, a 2022 study revealed that nearly three-quarters of adults spent less than one hour deciding on which health plan they will choose during open enrollment. Employers have the responsibility to understand how their employees approach benefits and support them to make effective, affordable choices during this year’s open enrollment season.

How Employers Can Help

Benefits should be towards the top of your attraction and retention checklist. Employees and prospects are evaluating the total rewards of employment more than ever as financial pressure accumulates.

Now is the time to take steps to help your employees become better consumers of benefits — arming them with understanding of their options so they can make informed decisions. You help employees create financial and health security for themselves and their family in 2024. Here are four ways employers can help:

Communicate with employees about benefits early

Time to prepare is important. Today is the day to start communicating about open enrollment. Many workers enroll in benefits as soon as open enrollment begins, so by being fully informed before the start of this process, these individuals are empowered to make selections that best fit their budget and needs.

Use multiple (and the right) communication channels

Employers can use various channels to communicate with employees about benefits, including emails, webinars, discussions with benefits counselors, educational videos and interactive tools. Often, a multi-media approach will work best.

However, consider your workforce when building a communications strategy. Different generations often have unique approaches to communications (and benefits for that matter).

Do you have a young, mobile first organization? Then leverage apps and mobile communication. Vice versa, if your workforce is older and less tech-savvy, you may want to build in tools like brochures and traditional, mailed communication.

Utilize the media types that will be most effective for your people.

Clear, personal communication

Plain language and personalized messaging can enable employers to connect products to their employees’ lifestyles instead of simply listing what benefits are offered.

Employers can help employees better understand their benefits options, and how they meet specific needs by simplifying how they talk about these offerings. Use clear comparisons and storytelling to demonstrate how different benefits are relevant.

Highlight the services that come with coverage.

There is often a disconnect between the needs of employees and their utilization of relevant health care services. Employee assistance programs are a prime example — they are often heavily underutilized even though employees want resources to address mental health concerns.

Helping employees understand what services accompany their selections can help them make better decisions to protect themselves. From mental health support to legal assistance, educate your employees to ensure they get the most out of their benefits.

A Note to Employers

It is important to recognize that employers are also impacted by inflation. As the costs of health care continue to skyrocket, employers feel forced to adjust their budgets for medical and voluntary benefits spending in the upcoming open enrollment season. In these instances, employers should be sure to communicate any changes in benefits offered to their employees.

But benefits do not have to break the bank. Employers with the right broker partner have been able to hold back the trend line of inflation. This allows for minimal benefits disruption and even opportunities to enhance benefits to better meet employee and plan member needs.

Employee health and well-being remains one of the most important priorities for many employers. So, as we approach open enrollment for 2024, simplify and personalize your enrollment process to support your employees. As we all wrestle with inflation, changes to our open enrollment approach can help optimize resources and benefits to create impact for employees and their families in the year ahead.

 

Some content courtesy of our partners at Zywave.