Employee Education: Avoiding a Benefits PR Challenge

Presented by Scott McMurdie, CFP®, QPFC®

Agenda

• 5 Common Misconceptions• What are the signs of an education

problem?• Why should you care?• Barriers to improving communication• 5 ideas to enhance benefit communication

• 87% of employees say it is important to work for a company that cares about their well-being.Monster.com survey

• More than 4 in 5 employees who rate their employee benefits education highly also rate their benefits package positively and say their workplace is an excellent or very good place to work. UNUM 2012

5 Common Misconceptions Related to Employee Benefit Plans

Common Misconception #1

The 401(k) Plan is free

• According to the Small Business Administration 75% of employees who sign up for their company 401(k) plan are unaware of the fees associated with the plan. (sba.gov)

Common Misconception #2

Employees know how much the medical plan costs

How Much do employees know about the cost of their medical insurance?

All Employees Surveyed60% think they know the

cost

15% can provide reasonable estimate

LIMRA 2012

Common Misconception #3

Employees appreciate the value of employer contributions to

benefits

• 61% of employers provide basic information about their financial benefit offerings to employees once a year.

• 13% never communicate the value• 12% communicate the value upon first

eligibility• B of A Merrill Lynch Workplace Benefits Report

Common Misconception #4

Employees understand the differences in medical plans and which one is best suited

for their specific situation

Tale of Two Medical Plans

• Plan A-- $5,000 deductible 100% Coinsurance HSA Plan (Cost $400/mo)

• Plan B--$2,000 deductible 80% coinsurance $4,000 out of pocket maximum $35 Dr. Co-pay and Rx Co-pays of 10/30/50 (Cost $475/mo)

Which one is better?

• More than half of employees do not understand what their health insurance covers. Harris Interactive 2013

Common Misconception #5

The grass is greener on the other side

Flow of News

• Difference between Millennials, Generation X, and Baby Boomers

What are the signs?

• Low Participation• Constant questions/complaints to

managers or HR• Exit interviews• High Turnover• Reduced Productivity

Why should I care?

• Cost of Recruiting/Hiring/Firing• Loss of Productivity• Time Waste• Increased Administration Costs

What Keeps Employers From Enhancing Education and Communication

• Cost• Internal Resources• Complexity of benefits• Geographic Location of Employees• Apathy

5 Ideas For Creating an Effective Education and Communication Program

• Personalized Benefit Statements

5 Ideas For Creating an Effective Education and Communication Program

• Personalized Benefit Statements• Employee Surveys

5 Ideas For Creating an Effective Education and Communication Program

• Personalized Benefit Statements• Employee Surveys• Benefits Fair• Regular Education Meetings outside of

Open Enrollment• Utilize Providers

Benefits of a Well Structured Education Program

• Decreased Turnover• Enhanced Recruiting• Increased Enrollments• More Engaged, Loyal Employees• Improved Productivity• Reduced Benefits Administration

Questions?

Please remember to completethe session evaluation

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