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What Employees Don'T Know About Their Benefits Could Kill Their Future

Savvy brokers follow business trends directly affecting their clients and regularly offer customized advice to demonstrate knowledge and value. Comprehensive new data has shed light on one such trend-employee benefits communication. Although the issue of benefits communication has been around for decades, new research has identified compelling incentives for clients to improve employee communication and engagement in benefits decision-making.

A Vulnerable, Unprepared Workforce

The "2011 Aflac WorkForces Report1" uncovered eye-opening facts about the state of workers' well-being. For example, most consumers are in deep denial about the way a health crisis could affect their household. Unfortunately, this instinct to ignore worst-case scenarios has left countless Americans vulnerable to the potentially negative impact of a serious illness or injury. Only 13 percent of workers believe it is likely that they or a family member will experience a serious illness, such as heart disease or cancer, in the future. The odds are, in fact, much greater. Despite underestimating the odds of a serious or chronic illness, most workers- nearly 90 percent, in fact-say financial considerations would be the first thing on their minds if they or a family member became seriously ill. Many workers (40 percent) say they are most concerned with the coverage their insurance provides and 34 percent wonder how a serious illness would affect their ability to cover monthly expenses.

The fact that financial considerations would be top in the minds of workers is not surprising, given that 51 percent of workers say they are not prepared to pay out-of-pocket expenses not covered by major medical/health insurance related to an unexpected illness or accident. Another 31 percent say they have no confidence in their ability to cope with the financial impact of disability/injury, death or other unexpected events. With limited funds to help pay for an unexpected illness, most workers would be forced to turn to other measures and outlets to help cover the costs.

The Need for Clear, Consistent Benefits Communication

Brokers and agents can begin by making clients and prospective customers aware of the extent to which their workforce may be financially at risk. By doing this, you can help clients, whose productivity and own financial livelihood depends on these workers, realize they must play stronger roles in protecting workers. Helping employers focus on a central finding of the Aflac study-the need to more effectively communicate with employees and provide more education for wiser benefits decisions-also will empower clients with information to help put an end to the workforce vulnerability cycle.

Too Little Information; Adequate Advice Lacking

Only 40 percent of employees who participated in the Aflac study feel extremely/ very informed about their companies' benefits offerings. Reasons include sporadic and infrequent employer communication about benefits, and their role in financial and health care protection. Most employees, in fact, indicate that their employers communicate less than three times a year about benefits, and 44 percent of employees say they receive too little communication about benefits from their employers. Without real information, employees often turn to poor sources for insight and guidance. The majority of workers (61 percent) say they receive information and/or advice about employee benefits via word of mouth. Finally, agents and brokers can make a strong business case to clients for improved benefits communication.

Forty-one percent of workers agree they would be less likely to leave their jobs if they were well-informed about benefits, according to the Aflac study. The turnover cost alone is an incentive for employers to change how, and how often, they share benefits information.

Better Communication Leads to More Engagement

A mere 8 percent of workers strongly agree they are fully engaged in making those decisions, a sentiment shared by their employers. Sixty-three percent of companies agree that workers need to be more engaged, and just half feel their employees take full advantage of the benefits they're offered. As a result, they're unprepared for, and underprotected against, an accident or illness, resulting in significant financial implications for both themselves and their employers Strategies for Improved Benefits Communication Brokers and agents can help companies reap significant rewards, including healthier, more protected and more engaged employees, by recommending more effective benefits communication.

Four best practices include:

1. Retain a Broker/Benefits Consultant

Enabling employees to speak directly to a broker or other benefits advisor can provide incredibly effective education. In fact, 49 percent of workers agree they'd be more informed about benefits if they sat with a consultant or broker during enrollment.

As health care reform makes the insurance market even more complex, employees are seeking greater advice and clarity from their employers. Because many HR departments are operating with streamlined staffs, following complicated, evolving regulations is increasingly difficult. Brokers and agents can help companies bolster their insurance benefits with minimal impact to their bottom line. They also can give advice in developing effective communication strategies and enrollment processes. According to Aflac's study, companies that use brokers or benefits consultants are likely to offer a more robust benefits package than their competitors, believe their benefits packages are more competitive than their industry peers' and communicate more often about their organizations' benefits.

2. Survey Employees

Electronic communications offer easy solutions for surveying workers at minimal cost. Yet, a little more than half (52 percent) of organizations conduct surveys that increase their understanding of employees' satisfaction with benefits offerings. Even fewer-just 43 percent- survey their employees' understanding of benefits communication. Making assumptions about employees' satisfaction with and understanding of benefits offerings and health insurance is potentially damaging-not only to workers who may feel their needs aren't being met, but also to a company's productivity and retention.

3. Offer More

Many HR decision-makers choose not to add voluntary insurance policies and programs to their employee offerings because they don't believe employees are interested in applying for voluntary coverage. However, Aflac's study shows quite the opposite: 59 percent of employees say they would be interested in applying for voluntary insurance- if given the opportunity. A full understanding of workforce preferences and needs will help employers increase employees' benefits package satisfaction. Additionally, a greater recognition of health insurance gaps will help HR executives better address benefits communication needs and find ways to make benefits information more robust and accessible.

4. Communicate Year-round

Many employers only communicate their benefits programs to workers annually or semiannually, often with overwhelming information. Instead of expecting employees to comprehend and retain large amounts of benefits information at once, employers should present benefits program elements throughout the year. By doing so, they'll help employees retain the information, making open enrollment a smoother, easier process.

Conclusion

Developing effective benefits communication and employee engagement strategies is difficult, particularly when faced with a workforce largely in denial about the likelihood of an unexpected illness or accident. Brokers and agents can help HR executives make information simple for employees to understand and remember, enabling better decisions for their families and greater appreciation of their total compensation packages. Benefits packages can influence employee loyalty (86 percent), productivity (81 percent), job satisfaction (89 percent) and retention (77 percent). With all these factors at stake, helping clients implement a more effective communication and education plan is simply smart business.

Ron Agypt, a 34-year insurance industry veteran, is Aflac’s senior vice president of Market Development and Broker Sales, U.S. He is responsible for setting corporate strategy, and for developing market and broker growth through a team of dedicated profes [email protected].


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