September 2011

Common sense tells us that understanding a situation can enable us to take charge and make informed decisions, which in turn increases the likelihood that we will be satisfied with the results. This wisdom applies to employees and their benefits: Employees who are well-informed about the details of their benefits offerings are more apt to choose the benefits appropriate for them—those they most need and actually use—and thus be happier and more satisfied with their benefits packages. Survey results verify this, providing added motivation to employers to beef up their employee benefit plan communications.

A survey from Harris Interactive and Charlton Consulting Group indicates that most employees do not understand the full value of their salary and benefits, which can lead to dissatisfaction with their compensation package, and with their employer and working situation overall. According to this survey, 51% of workers believe that their employer pays 30% or less for employee benefits, such as health care, life, disability and retirement. However, the Department of Labor’s Bureau of Labor Statistics puts employers’ contributions at 43%, over and above wages, for employee benefits.

That survey also found a correlation between employees’ understanding of and their satisfaction with their total compensation, with 75% of the employees who said they are very satisfied with their benefits also saying they have at least quite a bit of understanding about their benefits package. Such a correlation also was found in a survey from Univers Workplace Benefits and Employee Benefit News. According to that survey, employees who are knowledgeable about their benefits are almost 30% more likely to be satisfied with the benefit plans offered.

How do these indicators play out in the day-to-day workings of companies? According to the Univers survey, companies that have high employee satisfaction with benefits are 86% more likely to say that benefits positively affect their recruitment and retention efforts. Further, firms with employees who are knowledgeable about their benefits are two-thirds more likely than other firms to report turnover rates of under 20%.

Clearly, effective communications yield positive results, not only for employees, who are empowered to choose and use benefits wisely, but also for employers, who are likely to see a more stable and motivated workforce as a result of satisfied employees. Key elements of effective employee benefits communications include:

• Establishing a specific budget item for benefits communications and funding it adequately.
• Enabling those employees responsible for benefits communications to stay abreast of the latest trends and technologies by investing in their training.
• Creating a benefits communications strategy, a plan for implementation, and benchmarks against which to measure success.
• Using multiple types of media to recognize that everyone learns in different ways, and that some employees will respond to printed materials, others to visual displays, and still others to oral communications such as meetings.
• To the extent possible, targeting communications to individual employees and employee demographic groups.
• Recognizing the difference that one-on-one communications can make to some employees and trying to build time into the communications plan to allow for this.

Remember that effective communications are not a one-shot deal; messages sometimes must be repeated often, albeit in different ways and through different media, to truly take hold with the listener. The result can be employees who are more satisfied, not only with their benefits but with their employer overall, which can lead to a more stable, more productive workplace.

My grandmother once told me that she would save her allowance all month to walk three miles to the soda fountain for a single milkshake. From ready-made foods at the market, to the fast-food drive by, to diet pills purporting instant and effortless weight loss, our culture today is all about instant gratification and results. The basic fact that not everything is obtained without an effort and/or wait seems to be a lost concept.

When it comes to a person changing their mindset to adopt healthy habits and rid unhealthy habits, results and gratification take time. It takes a commitment and constant effort to succeed at losing weight, exercising regularly, tobacco cessation, and other habit changes. If they’re to be successful, workplace wellness programs not only need to recognize the above, but also to understand what elements will engage employees over the long-term.

Let’s say you’ve hosted a health benefits presentation on active lifestyles and eating right. The employee turnout is high, and you had a lot of sincere interest from your employees. However, you observe a week later that very few have made any of the recommended changes. Within a few months, even most of those that made an attempt are back to their regular routines.

The above is an all too common scenario that confirms the reality that most people are more well-intentioned than self-motivated. Therefore, motivation should be one of the key elements provided by your wellness initiatives. Here are a few tips to help you inject motivation into your workforce:

• Make the experience personal for employees by offering a health risk assessment that will show an employee their own unique health risks and what steps he/she can take to address each risk.
• Completion of the assessment and any resulting follow-up recommendations should be tied to the health risk assessment incentives you’re offering, such as reduced health plan premiums.
• Keeping in mind that an individual must be willing, ready, and able to make a behavior change, you might focus on those that express a desire to make positive lifestyle changes. Aside from offering incentives, you might also help employees see the risks of failing to make positive changes, such as by posting charts with comparative lifespan stats on individuals that are smokers and non-smokers; pre-hypertensive, hypertensive, and of normal blood pressure; and are overweight, obese, and of normal weight.
• Provide/encourage support system structures, such as employee-based walking clubs, sponsoring a biggest loser competition, subsidies for joining certain fitness centers, or newsletter articles featuring health-successful employees.

Change is rarely easy for any of us. Employers must be careful that they don’t get so caught up in the black and white of a wellness program that they forget to address what will make or break it – human nature.

As health care costs continue to rise each year, employers also continue seeking methods to curb overspending. One such method is particularly appealing because it doesn’t entail plan redesign, plan cutbacks, changing vendors, or cost shifting. It simply involves ensuring that only those eligible are receiving plan coverage and having their claims paid. This can be accomplished by using a dependent eligibility audit to monitor dependent eligibility, as it allows overspending and coverage errors to be caught.

From employee oversight, poor record keeping, unintentional error, to fraud, there are many reasons why someone ineligible for plan coverage might still be on the plan roll. Often times there are ineligible dependent children past the age of majority; a divorced spouse; or a grown child that was eligible due to a student status, but isn’t currently attending school still on a plan roll. Then, there is COBRA notice requirement and continuation of rights compliance. This could be relevant if a once eligible individual has lost their eligibility status during a qualifying event.

In any event, these ineligible individuals add up when they are maintained as eligible and are thereby having claims paid that shouldn’t be paid. The employer is incurring potentially high overspending and unnecessary added cost by doing allowing such to continue.

The eligibility audit, mentioned above, can help the employer determine if their plan is carrying any person that isn’t eligible. For example, an eligibility audit can catch those enrolled as dependents that don’t actually meet the plans written requirements for what constitutes an eligible dependent, thereby alerting the employer that this individual should be removed from the roll. The audit process will include asking eligible employees with enrolled dependents to provide proof (such as a domestic partnership affidavit, a marriage license, certificate of birth, decree of adoption, Social Security disability determination, or current college transcript) confirming that the dependent does actually meet the plan’s written dependent status requirements.

The employer will need to decide beforehand if the audit should be applied concerning all plan members or only in specific areas, such as verifying specific dependent classes (only college students for example.) The employer will also need to determine beforehand what types verifications of dependent eligibility will be required and whether it will need to be an original or copy of the documentation. Determining who will be responsible for examining and verifying the documentation is also an important consideration. If contracted out verses done within the internal human resource or benefits department, the audit is often more costly.

Aside from having a direct impact on what the audit will cost, all of the above decisions directly impact the quality of the results.

Two last important elements are deciding a time frame for the audit and whether an amnesty period will be offered. Often times the audit time frame will run congruent with the benefits re-enrollment/ renewal period. This also allows employees already thinking about their coverage to make any appropriate changes that have been neglected in the past. The employer should also determine whether an amnesty period will be offered to allow employees to report ineligible dependents and not have adverse consequences as a result. Whatever is decided, the employer must be sure to clearly communicate to their employers what the dependent eligibility standards are, what documentation will be needed to verify a dependent eligibility status, and what the consequences will be for ineligible dependent continuation.

An eligibility audit not only offers a considerable amount of immediate health plan cost-savings, it also provides an opportunity for the employer to review plan provisions related to dependent eligibility. Sometimes the definitions need to be clarified or revised.