It is the time of year when employees make their benefit selections. Many of them do not know what they are selecting, but next year thousands of dollars will be deducted from their paychecks to pay for benefits they know very little about. Many employees select the lowest premium plan without realizing that it does not cover the spouse’s prescription medications or the child’s therapy.
A friend of mine recently came to me for assistance in selecting her family’s benefit plans for next year. She was handed an enrollment form to make her selections and no other information. When I started asking her questions, she could not answer them. There was no one in her organization who could answer them either. She was given a phone number for someone outside of the organization who did not call her back for two days. How could she make an intelligent choice when deciding between two different health plans that were going to cost her over $10,000 next year? No wonder employees pick the plan with the lowest premium!
So, who has responsibility for ensuring that employees know the details of their benefit plans? The employee? The employer? The benefits provider? The benefits broker? In the example above, it does not appear that the employer had enough information to share and that the benefits broker did not have the time to explain the details.
Here are the top 5 benefits offered by employers and some of confusion surrounding them:
1. Health Insurance
Most employers offer more than one health plan to their employees. Unfortunately many people don’t know the difference between deductibles and co-insurance. Employees see only the repeated premiums they will be paying and they often do not understand what else they may be responsible for other than premiums and co-pays.
2. Paid Time Off
Most of these offerings are fairly straightforward, but some employers do not explain their plans well. For example, some employers offer vacation and sick time separately. Some employers lump the two together. Some allow time to roll over from year to year while others do not.
3. Dental Insurance
As with health insurance, most people don’t understand what they are responsible for beyond their “free” annual cleanings. There are fillings and root canals, retainers and braces, much of which is covered at less than 100%.
4. Retirement Savings Plan
Whether it’s a 401(k), a 403(b), a pension plan, or a simple IRA, many employees either don’t take advantage of these plans or don’t understand them. Once again, many employees are strictly concerned about how much is deducted from the paycheck, so they ignore the compound interest they could gain over time and the contributions that their employers might make to a fund they won’t have access to for many years.
5. Vision Insurance
Vision insurance is essential for some employees and not necessary for others. These plans are usually simple; they will cover new lenses (glasses or contacts) once a year.
With benefits growing more and more complicated, it is logical to assume that most employees do not understand them, so it is important for organizations to have at least one person who can answer questions. This person must truly understand the ins and outs of the benefit plans and must also have the time to spend with employees. If you want to drive employee engagement, be sure your employees understand their benefits and have the information to utilize them to the fullest extent.
As an employee, do you understand your benefits offerings? As an employer, are you comfortable that you understand what you are offering to your employees? If not, how can you make changes that will better your life and theirs?
For more information or guidance on employee engagement or all of your HR issues, contact Alyson Getchell with Get HR.
