Tackling open enrollment headaches: HR leaders see underutilized benefits as retention tool
It’s open enrollment season — which can be a headache for HR people and employees alike.
In fact, in one recent survey, nearly one-third of 22 to 32-year-olds (the cohort dubbed “zillennials”) said they’d rather apply for a new job than go through the process of selecting health insurance during this period. And more than half of them admit to having blindly chosen a plan because they found the details too confusing.
Open enrollment is about so much more than health insurance, of course. It is a time when employees must make a range of choices that will shape their personal financial picture for the next year — from selecting pet insurance to optimizing their retirement contributions. Then, there are the scores of benefits employees may not even be aware they have access to but which can prove especially valuable.
And another wrinkle this year: the results of the U.S. presidential election, which experts say could radically alter healthcare benefits for workers, particularly women and members of vulnerable groups.
It all amounts to an enormous undertaking for HR departments tasked with educating their employees.
Katie Pfeifer, head of workplace solutions at the financial management firm Cerity Partners, recommends that HR teams host informational workshops and webinars that break down complex benefits “to help employees see how these offerings fit into their broader financial goals.” Keeping it simple is essential, she noted, seeing as benefits around such areas as disability and long-term care can often be complicated and misunderstood.
With employees’ financial picture in mind, Kashable offers an employer-sponsored benefit program that provides employees with everything from low-cost loans to financial wellness resources like coaching and credit monitoring services.
Einat Steklov, cofounder and CEO of Kashable, argues that prioritizing employees’ personal finance picture not only helps ease the burden of workers but serves as a tool to recruit and retain staff. A recent survey by Kashable revealed that more than 6 in 10 workers feel their financial situation negatively impacts their mental health, while another study, from SoFi and CITE Research, found that 86% of employees are increasingly stressed about their finances.
During this open enrollment season, HR professionals face heightened challenges as healthcare costs surge following years of relatively stable trends. Tim Nimmer, senior vp of insurance services and operations at the HR solutions company TriNet, notes that medical cost trends have skyrocketed, driven by a combination of inflation and increased healthcare usage around the pandemic.
HR departments often find themselves in a particularly delicate position during open enrollment. “If you create a lot of disruption or pain with employees around their benefit programs, it is a very bad day for the HR professionals,” said Nimmer. “So, they try to make sure that they balance the budget pressures with the employee demands of consistency and stability with their benefits.”
HR leaders point to the many benefits afforded to employees which are often underutilized.
Pfeifer said many employees overlook benefits like non-qualified deferred compensation (NQDC) plans, which can be a powerful tool for high-income earners to defer income taxes and invest excess income. Health Savings Accounts (HSAs) are also often underutilized, often seen solely as a short-term tool for medical expenses but that are, in fact, “highly beneficial for retirement healthcare expenses if used strategically,” she said.
Wende Smith, head of people operations at the HR services company BambooHR, noted that some benefits employees often fail to take advantage of include tuition reimbursement, commuter benefits, and legal and identity theft protection services.
“The role of HR is to balance the needs and desires of employees with the requirements of the business while maintaining market competitiveness — this balance remains a top priority,” she said. “HR professionals should be actively listening to employees to ensure high levels of engagement, happiness and retention.”