Last year, we discussed some of the irrational ways in which employees act when enrolling, and some tactics we might use to encourage them to think rationally. We know we sometimes need to break through their irrationality to help them make good decisions about benefits.

But let's focus on our own behavior. I recently heard several benefits pros say they think employee participation rates should be increasing, or at least remaining level. Is this an example of being predictably irrational? Wishful thinking?

Participation is the key to satisfaction for employers (they want offerings to be attractive to employees) and to our own success (low participation equals low revenue). We might say today's benefit communications will inform employees better than ever. Employees can enroll via computers, tablets, smart phones and paper; multiple media should make enrolling easy, right? And we use all those mind tricks of behavioral economics. Participation should be terrific.

Perhaps that would be the case if nothing else had changed in the past 20 years. But multiple factors affecting participation have evolved, and they more than counter any positive expectations.

With costs going up, employers are passing along increases to employees. Employees are faced with increased expenses for medical benefits while their real income grows at a slower pace.

Second, there are more options. Today's diverse workforce has diverse needs and employers reflect this via an ever-broadening array of voluntary plans. A recent SHRM study indicated today's employers have a choice of more than 350 potential benefits, nearly six times as many as 20 years ago. When employees are presented with too many choices, they tend to become irrational and may not even make a choice at all.

Finally, benefit administration systems have not yet proven to be as consistently effective as in-person enrollment, yet employers tend to prefer them. Paper forms and messy paperwork are eliminated. This saves lots of work, but the trade-off is often a loss of participation.

It's no wonder participation rates are going down. So what are we supposed to do about this?

First, we should work with employers to prioritize their benefit options. Ben admin systems are capable of offering a very broad range of benefits at a single time. But just because you are able to do something does not mean you should. Consider conducting benefit enrollment twice a year. The traditional fall enrollment could focus on medical, term life and health-related products. The off-cycle enrollment period might focus on “lifestyle” options and products such as permanent life and long-term care.

Second, convince employers that online enrollment should always be accompanied by in-person enrollment meetings. Employers have a perception that their younger workers prefer online benefit communication, but in a recent study, LIMRA found that nearly 70 percent of Gen Z workers still prefer in-person communications.

Finally, we should be conscious of the price of the products. Since employees are being squeezed by medical costs, make sure the voluntary products we offer are truly low cost options.

The ball is in our court. We can irrationally expect better participation, or we can work to make it happen.

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Why it's irrational to expect benefits participation to be increasing

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