Building up your (benefits) core
A recent trip to the physical therapist got me thinking about the benefits employees and employers consider to be the core.
A few months ago, after a long plane trip, I started to have lower back issues and ended up going to physical therapy. I expected the focus to be on some kind of manipulation of my back. Instead, the therapist gave me exercises designed to build up my core. He explained that the muscles and nerves in the lower back are tied to those in the core. Before you solve other issues, it is essential to begin with a strong core.
This started me thinking about the benefits employees and employers consider to be the core. Core benefits are generally those that meet the essential financial needs of employees and their families and satisfy the employer’s goal of attracting and retaining employees. Let’s consider the products that make a successful core benefit plan.
Related: 3 areas where employee benefits are out of whack
Studies show that the top insured benefits (combining employer and employee interest) are medical and prescription benefits, dental and vision, life and disability income protection, followed by critical illness, accident, hospital indemnity and lifestyle benefits.
Benefits related to health and wellness top the list. A strong core starts at the top and includes dental and vision alongside medical and pharmacy plans.
There are two reasons why dental and vision benefits sit in the core. Most employees and insured family members will use the benefits during a given year, for routine examinations as well as any necessary follow-ups. While on the surface these routine examinations are designed to diagnose and prescribe treatment for any problems, the value also includes the relationship between the health and wellness of insured members and their oral and visual health.
Dental checkups are commonly scheduled every six months, while physical exams with the doctor may not even be conducted once a year. A year ago, my doctor said it was nice of me for to show up every two or three years for my annual exam. I don’t think I’m atypical. During those biannual dental exams, significant health issues can be detected, including oral cancers and diabetes, as well as less common conditions. Similarly, vision exams can diagnose eye tumors, diabetic retinopathy and other significant medical issues.
The high utilization of dental and vision products has another benefit based on behavioral economics. The cognitive bias, hyperbolic discounting, is when people choose smaller, immediate rewards over larger, later rewards. Employees love benefits they’re confident will help them in the current year. Owning benefits they know they will use encourages employees to pay attention during enrollment and allows us the opportunity to present extended benefits during that enrollment.
We know that a strong core of benefits has medical, retirement, life and income protection. But dental and vision products fit into the core because they encourage and incent regular checkups and can help in early detection of serious diseases. And every insured—employee, spouse and children—will benefit.
What happens when you build up your core? On the personal side, my back feels great. On the benefits side, employers can be sure employees have access to the most important and popular items. Then employees can consider their own personal needs to build around the core, through other voluntary benefits made available through their employer.
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