Employee benefits offered vs. used: What's the difference?
A recent study from Fidelity suggests just offering certain benefits increases employee well-being, even if they're not used.
One in four companies had changed employee health benefits since the COVID-19 pandemic began in March, complicating the upcoming 2020 annual enrollment period, according to new research from Fidelity Investments.
The report, entitled “Uncovering the real value of the benefits you offer,” warned that while evaluating health benefits was more important than ever, 79% of employees did not anticipate spending any more time in 2020 making their decision. But will that matter in the end?
Related: Increased spending and COVID-19 impact 2020 benefits landscape
“If 2020 has shown us anything, it’s that this is not a typical year and arguably, we are approaching the most important annual enrollment we will ever experience in our lifetime and we cannot simply default our benefits like we may have done in previous years,” said Hope Manion, chief health and welfare actuary and senior vice president of Fidelity Workplace Consulting. “Given so many have experienced financial and health crises this year, now is the time to ensure they don’t overlook benefits that could impact their future health and financial well-being.”
According to Fidelity’s research, many employees are generally aware of valuable benefits, but still are not taking advantage of them. For instance, 92% of employees may be aware that a health savings account is offered by their employer, but many choose not to opt for a high-deductible health plan, a requirement to contribute to an HSA.
Interestingly, the report found that not all benefits actually have to be used to be effective. When it comes to well-being, just offering mental health benefits, life insurance and remote work suggests that the employer has employees’ best interests in mind. But for employees, HSAs, telemedicine and parental leave need to actually be utilized to improve well-being.
Understanding the difference between awareness and utilization of benefits can help employers dig deeper into which benefits they should focus their attention on. They can then seek to better understand why people do or don’t sign up for a certain benefit and find new ways of conveying value.
Fidelity, which works with employers to create benefits programs for workers, recommended that employees be on the lookout for often-overlooked employer benefits like telemedicine, meditation services and wellness programs.
Fidelity offered some key takeaways for employers as they prepare for the upcoming enrollment season, including:
- Measure value in a comprehensive way–sometimes you just have to ask employees how they’re doing.
- Don’t get caught up on utilization rates; sometimes it’s enough just to offer a benefit.
- Awareness is key no matter how much the benefit matters.
- Promote engagement of specific benefits through value propositions
- Look beyond benefits behaviors to see what personal and cultural harries may be impeding engagement.
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