Experience is the best teacher, but its lessons often come at a high price.
Every employer or human resources professional has made mistakes during open enrollment. Trying to accommodate the diverse needs of the workforce in a short time frame against the backdrop of increasing options and often bewildering regulations can be a challenge, even in the best-run companies.
Avoiding mistakes is impossible, but learning from them is not. Although the list may be limitless, here are a dozen of the most common pratfalls during open enrollment and how to avoid them.
1. Failing to Communicate
“What we’ve got here… is failure to communicate.”
– Cool Hand Luke
This mistake likely has topped the list since open enrollment first came into existence, and it will probably continue to do so. That’s because enrollment is a complex procedure, and few challenges are greater that making sure employers, employees, brokers and carriers are on the same page.
Employers have both a stick and a carrot to encourage them to communicate as well as possible. The stick is the Affordable Care Act, which requires all employers subject to the Fair Labor Standards Act to communicate with employees about their health care coverage, regardless of whether they offer benefits. As a carrot, an Aflac study found that 80 percent of employees agree a well-communicated benefits package would make them less likely to leave their jobs.
2. Neglecting Technology
The integration of new technology is arguably the most significant innovation in the enrollment process in recent years. This is especially important as younger people enter the workforce. Millennials repeatedly express a preference for receiving and analyzing benefits information by computer, phone or other electronic devices.
The challenge is to make the use of technology as seamless as possible, both for employees who are tech-savvy and for those who are not. Carriers and brokers are making this a point of emphasis, and employers should lean on them for practical advice.
3. Over-Reliance on Technology
At the other end of the spectrum is the temptation to rely on technology to do things it was never meant to do.
“Technology is so prevalent in the enrollment space today, but watch out for relying on technology as the one thing that will make or break enrollment,” says Kathy O’Brien, vice president of voluntary benefits and nation client group services for Unum in Chattanooga, Tennessee. “Technology is great for capturing data, but it won’t solve every problem and doesn’t change the importance of the other work you need to do.”
4. Succumbing to Inertia
It can be frustrating to invest substantial time and effort into employee benefit education, only to have most of the staff do nothing. Yet that is what happens most of the time. Just 36 percent of workers make any changes from the previous enrollment, and 53 percent spend less than one hour making their selections, according to a LIMRA study.
One reason may be that employees don’t feel assured they are making the right decisions. Only 10 percent felt confident in their enrollment choices when they were done, according to a VSP Vision Care study. One good strategy for overcoming inertia is to attach dollar values to their choices and show where their existing selections may be leaving money on the table.
5. Cutting too Many Corners
One of the most difficult financial decisions employers make each year is deciding how much money to allocate to employee benefits. Spending too much goes straight to the bottom line and could result in having to lay off the very employees they are trying to help. Spending too little, however, can hurt employee retention and recruiting.
Voluntary benefits offer a win-win solution. Employees, who pick up the costs, have more options to tailor a program that meets their own needs. In a recent study of small businesses, 85 percent of workers consider voluntary benefits to be part of a comprehensive benefits package, and 62 percent see a need for voluntary benefits.
6. Not Thinking Holistically
“Holistic” is not just a description of an employee wellness program; it also describes how employers should think about employee benefit packages. The bread-and-butter benefits of life and health insurance now may include such voluntary options as dental, vision and critical illness. Employers and workers alike need to understand how all of the benefits mesh for each individual. Businesses also need to think broadly about their approach to enrollment
“Overall, we take a holistic approach to the customer’s enrollment program, from benefits communication to personalized benefits education and counseling, as well as ongoing, dedicated service,” says Heather Lozynski, assistant vice president of premier client management for Colonial Life in Columbia, South Carolina. “This allows the employer to then focus on other aspects of their benefits process.”
7. Unbalanced Benefits Mix
Employee benefits have evolved from plain vanilla to 31 (or more) flavors. As the job market rebounds and competition for talented employees increases, workers will demand more from their employers. Benefits that were once considered add-ons are now considered mandatory.
Round out the benefits package with an appealing mix of standard features and voluntary options with the objective of attracting, retaining and protecting top-tier employees.
8. Incomplete Documentation
Employee satisfaction is a worthy objective — and so is keeping government regulators happy.
The Affordable Care Act requires employers who self-fund employee health care to report information about minimum essential coverage to the IRS, at the risk of penalties. Even if a company is not required by law to offer compliant coverage to part-time employees, it is still responsible for keeping detailed records of their employment status and hours worked. As the old saying goes, the job is not over until the paperwork is done.
9. Forgetting The Family
The Affordable Care Act has affected the options available to employers, workers and their families. Many businesses are dropping spousal health insurance coverage or adding surcharges for spouses who have access to employer-provided insurance at their own jobs. Also, adult children can now remain on their parents’ health policies until they are 26.
Clearly communicate company policies regarding family coverage, and try to include affected family members in informational meetings. Get to know more about employees’ families — it will pay dividends long after open enrollment.
10. Limiting Enrollment Options
Carriers make no secret about their emphasis on electronic benefits education and enrollment. All things considered, it is simpler and less prone to copying and data-entry errors.
It would be a mistake, however, to believe that the high-tech option is the first choice of every employee. Be sure to offer the options of old-fashioned paper documents, phone registration and face-to-face meetings. One good compromise is an on-site enrollment kiosk where a real person provides electronic enrollment assistance.
11. Letting Benefits go Unused
A benefit is beneficial only if the employee uses it. Too many employees will sign up for benefits this fall, forget about them and miss out on the advantages they offer.
Periodically remind employees to review and evaluate their available benefits throughout the year so they can take advantage of ones that work and drop those that do not. In addition to health and wellness benefits, also make sure they are taking advantage of accrued vacation and personal days. Besides maximizing the return on their benefit investment, it will periodically remind them that the employer is looking out for their best interests.
12. Prematurely Closing the OODA Loop
Col. John Boyd of the U.S. Air Force was an ace fighter pilot. He summarized his success with the acronym OODA: Observe, Orient, Decide and Act. Many successful businesses are adopting his approach.
After the stress of open enrollment, it’s tempting to breathe a sigh of relief and focus on something else until next fall. However, the close of enrollment is a critical time to observe by soliciting feedback from employees, brokers and carriers. What worked this year, and what didn’t? What types of communications were most effective? And how can the process be improves in 2017?
“Make sure you know what is working and what is not,” says Linda Garcia, vice president for human resources at Rooms to Go, a furniture retailer based just outside Tampa. “We are doing a communications survey right now to find out the best way to reach each of our 7,500 employees. We also conduct quarterly benefits surveys and ask for their actual comments instead of just checking a box.”