If you haven't already heard the term “employee benefits decision support,” chances are you will soon. In fact, a study by Willis Towers Watson estimates that 71% of employers will offer a decision support tool by 2020. This fast-evolving benefits trend has emerged due to three key reasons:
- Employees don’t understand their benefits options - and it’s costing them
- The benefits landscape is becoming even more complicated
- You and your team have limited bandwidth
Let’s look at each in turn.
Employees don’t understand their benefits options - and it’s costing them
According to a study from the Employee Benefits Research Institute (EBRI), roughly half of employees lack confidence when choosing their health plan. Other research indicates that workers often overestimate their ability to make sound benefit choices, which means that some of your workforce’s confidence is likely unfounded. This ties in with the statistic that an alarmingly low 14% of Americans can accurately define basic health insurance terms.
Taken together, these data points paint a scary picture. Many employees are making their benefits selections without the insights and guidance that they need, often ending up with the wrong coverage for their circumstances. Research further shows that their under-informed choices consistently cost them between $600 and $2,000 more than they need to pay on health care annually. A decision support tool can help your workforce understand their benefit options and make appropriate decisions based on their unique needs.
The benefits landscape is becoming even more complicated
In an effort to control costs, your benefits team has likely had to embrace the current consumer-driven health care trend as a necessary strategy to decrease corporate health and benefits expenses. Since the very generous, low-deductible, low-copayment health plans are cost prohibitive for your company, the cost burden has shifted to the employees by way of high deductible health plans (HDHP) and Health Savings Accounts (HSA). Now, employees must make smart decisions to manage their cost of care and many are ill-equipped to navigate this new medical insurance landscape.
In recent years, you’ve probably augmented your benefits package to include a range of options that go beyond medical, dental, and vision coverage. While more choice is always good, this benefits buffet can ultimately make the open enrollment decision process even more challenging for your workers. When people are overwhelmed with choices, they are more likely to make no choice at all, letting inertia kick in and sticking with their current benefits. Intelligent decision support tools can simplify the task of reviewing and comparing all of the benefits available, helping your employees choose the suite of perks that best align with their personal needs and preferences.
You and your team have limited bandwidth
As a caring professional, you really want to help employees choose the right benefits for both their wellbeing and their wallet. The truth is, though, that you and your team just don’t have enough time to personally guide every worker during open enrollment. The annual benefits season is simply too chaotic-- especially if you’re understaffed. According to EBRI, this bandwidth shortage results in nearly a third of employees not receiving any benefits guidance.
This is unfortunate because we know that workers need and want this assistance. In fact, if the help was available, more than half say that they would definitely take advantage, and nearly 90% say that they might. Since it’s not feasible for you to meet with every individual employee, a sophisticated decision support tool that factors in each worker’s needs and preferences can be a great stand-in. Technology like artificial intelligence makes it possible for every single employee to get the personalized guidance that they need.
As you can see, a perfect storm of variables has come together, paving the way for the emergence of decision support tools. We developed this eight-part series to help you better understand how these new tools work, how to evaluate them, and what they could mean for you and your employees during your next open enrollment. We hope you read the remaining articles in this series where we'll dive deeper into the decision support trend and its implications for HR & Benefits teams.