When employees get their open enrollment materials and forms around this time of year, many are so overwhelmed that they simply glaze over and forgo any new decisions, opting instead to go with what they had last year.
And as recent surveys have shown, many regret missing opportunities to participate in additional voluntary benefits, such as tax-advantaged benefits, which can help them save up to 40 percent on their routine and unavoidable health, dependent care and commuter costs.
To fix this, there are a couple of things HR advisors should emphasize. First, make sure that employees understand that workplace benefits are a substantial part of their overall compensation. You can help employees connect the dots between their benefits packet and their paycheck by providing them with an example like this: a family that sets aside $2,500 for health care, $5,000 for dependent care and $2,400 for commuting costs could save up to $3,960 in taxes annually---increasing their spendable income. I’m sure we can all think of ways to put that kind of money to good use.
If you are involved with your company about open enrollment for employee benefits and how they can be used to maximize compensation, I have two great resources for you.
Educational Website on Pre-Tax Benefits
For any novice preparing for open enrollment, the Save Smart, Spend Healthy website provides a great overview of how pre-tax health care, dependent care and commuter benefits work. Key features of the site include lists of eligible expenses and calculators for determining how much you should set aside and expect to save.
Free Sweepstakes = Tutorial and Chance to Win
Encourage those who want to research pre-tax benefits in a way that may even be fun to participate in a new Facebook-based sweepstakes where participants quickly calculate the savings they can expect by using pre-tax benefits and then enter to win a weekly drawing for a $250 gift card. Participants can also gain additional entries to the sweepstakes by referring their friends on Facebook. I wouldn’t wait too long to enter the sweepstakes. It ends Nov. 30, 2011.
I'd encourage you to share this website and sweepstakes with those in your workplaces as they make their open enrollment decisions. As an incentive, keep in mind that every new enrollee in a tax-advantaged account means a reduction in the taxes paid by your company, creating a win-win for the employee and company alike.