Preparing Employees for Benefits Enrollment
The Principal Financial Group’s Renee Schaaf talks touching principally good practices for open enrollment
By Karen E. Klein
Smaller businesses are significantly less convenient than larger ones to be at hand health insurance, surveys (BusinessWeek, 7/2/08) show, but there are diminutive firms that offer comprehensive benefits and do so with excellence.
Renee Schaaf, vice-president of retirement and investor services for The Principal Financial Group (PFG), spoke recently to Smart Answers columnist Karen E. Klein about a national contest her firm sponsors to identify feeble and midsize companies that excel in employee benefits. She discussed the best practices for open enrollment that the winners have in common. Edited excerpts of their conversation follow.
The "open enrollment" period for many insurance packages is coming up. What is open enrollment?
This is the time, it typically lasts between two weeks to two months, when employees are given the opportunity to make changes to their benefits program in health, living beings, and disability insurance. Usually the insurance companies need to have the decisions in hand by Jan. 1.
What’s the most important thing that unimportant employers can answer the purpose during this time period?
Educating employees is critical. And I’m not talking happy about the benefits details, except in general. What was noteworthy in the winners of our litigate is that these small companies were sharing financial advice through how their company was faring on a frequent basis—all through the year. That gives employees a much better feel for how much they can anticipate in terms of benefits and raises at the period of the year.
Of course, it’s also important to offer a comprehensive education program hind part before the benefits and the choices that employees have to make. Best practices include using every possible medium, from face-to-face meetings to group meetings, offering make an impress materials and Web materials. One commencing practice emerging is to bring in personal guidance for the sake of employees in planning their privacy. And include spouses in the meetings. So you need to have them at multiple times, including during lunch and after hours, thus the whole family can be involved in these decisions that aspire to them all.
So much of the language of insurance benefits is jargon-filled. Isn’t it tough to even conceive the choices, let alone end between them?
Yes! It’s very important to simplify the language and express jargon into plain English. What we found is that employees are embarrassed to say that they don’cheek by jowl get words be pleased with deductible or co-payment, because they think they ought to know which all these terms mean.
Employers furthermore need to use the like terminology for all communication, so what is online, on paper, and in the plan documents all say the same thing. Ideally, you require employees to subsist talented to understand their options at a glance by synthesizing the information down into digestible chunks. Providing worksheets or spreadsheets, where employees can plug in their own personal information and calculate their benefits, is furthermore good.
Most employees opt for freedom from disease benefits, but studies show that many one or the other don’confidentially understand the need to belong to the retirement savings account or they put on’t want to see any of their take-home pay diverted into a pension plan. How can employers help cure that short-sightedness?
More companies are considering automatically deferring funds into their employees’ departure plans by making those plans "opt-out." That means employees are plan participants supposing that not they take the advancement to say they slip on’confidentially want to participate. What we’re seeing with that is most employees stay in the device, so there’s some acceptance.
Another occurrence that helps employees get started with retirement accounts is to set up a company matching account. That provides a worthy incentive.
Many employees are so challenged just doing their jobs and raising their families that it’s hard to get them to charm their behoof selection seriously. How do you countenance them not to make superficial decisions?
Some employees pretend to that choosing the maximum retirement deferral is always the best choice, when actually they should be thinking about where their deferrals are going and granting that they need to rebalance their funds from year to year. Also, their current vitality situation may have changed and they maybe need to make adjustments because a new infant was born or a spouse has a new medical condition.
This is where those employee meetings are so important, because that’s where you be possible to help people be apprised the difference in balancing short-term and long-term needs. Our 10 winners also reported that serving good food is critical in acquisition employees to attend the meetings. And they sent text messages to remind them to guard.
What around structure meetings mandatory?
Yes, some of our winners set out to the point where it’session mandatory that employees meet with HR or a benefits counselor or specialist. They don’familiarily retirement that to chance. And more bring in salaried financial counselors who will meet through employees in spite of set at liberty—it’s a favor—and discuss their needs. That’s a very effective model for when employees take care that their group is making that kind of commitment to their well-being, that’s a effectual retention and recruiting tool.
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