3 Ways Employers Can Improve Benefits Open Enrollment

School has started, holiday planning is forthcoming and another annual event is upon us…benefits open enrollment. Each year companies large and small prep for the once a year event to educate and enroll employees in benefit plans. Whereas communication of benefit programs should be ongoing, open enrollment is truthfully the one time that employees are fully focused on benefit plan features and the one time that employers must provide information, tools and resources employees need to make wise benefit decisions.

For many employees, annual open enrollment can feel overwhelming and stressful. Overwhelming because benefit terms, coverage levels and continued changes require employees to become strong consumers.  Stressful because apart from continued rising costs in healthcare, employees feel pressured to make the once a year decision they won’t later regret.  However, many don’t necessarily commit the time necessary to become educated on coverages and plans options. In fact, Aflac’s benefit survey found that 77 percent of employees spend 60 minutes or less preparing for and selecting benefits, and nearly half (46 percent) spend 30 minutes or less.   This statistic reinforces the need of employers to offer resources to assist employees in making educated benefit decisions.

Following are three ways employers can improve the success of benefits open enrollment this year:

Anticipate and Eliminate Confusion         

The average employee has a limited understanding of benefits “lingo,” and may struggle to understand concepts that seem straightforward to employers or HR. According to Employee Benefit News, just 14% can correctly define co-pay, co-insurance, deductible and out-of-pocket maximum.

Apart from benefit terms, employees also struggle to understand the true cost of a health plan, specifically the tradeoff between high premiums and low deductibles. With many employers introducing or moving to increased options of consumer-driven or high-deductible plans, employees need education on the distinct differences of an HMO, a PPO and plans with a HSA. HSA basics remain widely misunderstood by employees; and employees may opt for health coverage they understand, rather than health coverage best suited for their circumstances. For example, a plan with a low deductible and high premiums may not be right for healthier employees who don’t expect to be heavy users of health care services. Conversely, lower premium plans with higher deductibles may not be right for someone who has a chronic condition and requires ongoing use of prescription medications.

Many employees may focus on the least expensive plan on a per paycheck basis or for the most comprehensive plan despite a higher premium; however, an HSA, especially with funds contributed by the employer, can alter that cost calculation between a traditional PPO option and a high-deduction consumer-directed health plan.

Make it Active           

When facilitating open enrollment, ensure that the process requires employee review and election, rather than allowing them to passively continue with their selections from the prior year. Employee Benefits News reports that 90% of employees keep the same benefits year after year. This is an indication that employees may often stay with what they know in part because of lack of education, but likely because the process didn’t dictate an active engagement.

Requiring employees to reapply each year in benefit plans improves the odds they’ll reassess whether they’re making the right choices for themselves and their families. An active enrollment process has another benefit as well in that it will ensure employers are also getting up-to-date information about employees and their dependents. Open enrollment is oftentimes that one time employees will review their dependents and their personal information.

Communicate Information through Different Ways        

There is probably no risk in over-communicating during open enrollment. Employers should evaluate multiple communication channels to ensure information is received and confidently reviewed by both employees and their eligible dependents. A survey by the nonprofit International Foundation of Employee Benefit Plans revealed that employers believe:

  • Benefit plan participants do not open or read communications materials (80% of organizations reported this).
  • Participants don’t understand the materials (49%).
  • Participants don’t perceive value in their benefits (31%).

Employers can more readily combat these statistics with communicating information during open enrollment in various formats. These channels of communication can include face-to-face meetings, e-mail campaigns, a benefits booklet mailed to the home, an interactive platform on an intranet site, or posters in the hallways.

In addition, millennials are commonly seeking information in bite-sized pieces and in mobile format, so employers are wise to examine the potential use of apps or benefits communication to employees’ mobile devices. Ideally, employers should look to provide employees information 24/7 so they can easily absorb, share and take action on it when and where it’s most convenient for them.

Given the tremendous expense and time invested by employers in considering and extending benefits as part of an employee’s total rewards, taking time to consider improvements in the benefits open enrollment process is a worthwhile activity and one that will be appreciated by employees.

Brandi Gordon, SPHR – Senior HR Consultant

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

 

Bay Area Human Resources Services

EEOC Settles Equal Pay Act Complaint

On September 7th, the U.S. Equal Employment Opportunity Commission (EEOC) publicized that a school district in Minnesota has entered into a conciliation agreement with the commission to resolve a custodian’s equal pay charge. In a conciliation agreement, the school agreed to pay her $50,000 to settle the claims.

After conducting an investigation, the EEOC said it determined that the Montevideo School District failed to pay a female custodial aid wages equal to that of a custodian, a position held by her male coworker, even though the two performed job duties that were the same as or equivalent in skill, effort, and responsibility.

The aid position was paid on an hourly basis and, overall, paid much less annually than the salaried custodian position, according to EEOC. Because the positions performed the same work, the female employee’s lower pay violated the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964, the commission alleged.

The Equal Pay Act requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal. Specifically, the EPA provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.

To resolve the allegations, the employer agreed to pay the employee $50,000, reclassify her as a custodian and adjust her pay accordingly. The school district also must provide employees with annual anti-discrimination training and report any wage discrimination allegations to the EEOC.

Julie Schmid, acting director of the commission’s Minneapolis area office, said in a statement that “EEOC is committed to full enforcement of Title VII and the Equal Pay Act to ensure that women are paid equally for their work in the same jobs as men.”

The Montevideo School District disagreed with the EEOC’s findings. The Superintendent of Schools, Luther Heller, stated, “The district decided to settle this matter because we determined the employee had performed work above and beyond the job description or job classification; therefore, we decided that the employee was entitled to a higher ranking and a higher paying job. We don’t agree that it was for the reasons stated by the EEOC, but we agree there was an unfair result and we took steps to remedy that.”

Significance

This case is a reminder that the EEOC is diligently pursuing charges under the Equal Pay Act. In 2014 and 2015, the EEOC received approximately 1,000 complaints under the Act which averaged $6 million in payouts annually. If your organization has not already done so, it should review its organization charts and job descriptions to ensure compliance with the Equal Pay Act. One way to help ensure you are equally quantifying similar jobs across your organization is to perform a point-factor analysis on each position. Point-factor scoring allows you to measure such things as position complexity, required oversight, required knowledge, decision-making requirements, and working environment among other factors to mathematically quantify positions. This analysis will also help you ensure positions are classified as “exempt” or “non-exempt” for purposes of state and federal wage and hour laws.

If your organization is interested in a point-factor evaluation, please do not hesitate to contact our offices for more information.

Malcolm Whyte, SPHR – Vice President HR Services

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services