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Preparing Employees for Benefits Enrollment

Preparing Employees for Benefits Enrollment

Karen E. Klein / Buiness Week

November 17, 2008

Smaller businesses are significantly less likely than larger ones to offer health insurance, surveys show, but there are small firms that offer comprehensive benefits and do so with excellence.

Renee Schaaf, vice-president of retirement and investor services for The Principal Financial Group (PFG), spoke recently to Smart Answers columnist Karen E. Klein about a national contest her firm sponsors to identify small and midsize companies that excel in employee benefits. She discussed the best practices for open enrollment that the winners have in common. Edited excerpts of their conversation follow.

The “open enrollment” period for many insurance packages is coming up. What is open enrollment?

This is the time, it typically lasts between two weeks to two months, when employees are given the opportunity to make changes to their benefits program in health, life, and disability insurance. Usually the insurance companies need to have the decisions in hand by Jan. 1.

What’s the most important thing that small employers can do during this time period?

Educating employees is critical. And I’m not talking just about the benefits details, but in general. What was noteworthy in the winners of our contest is that these small companies were sharing financial information about how their company was faring on a frequent basis—all through the year. That gives employees a much better feel for how much they can anticipate in terms of benefits and raises at the end of the year.

Of course, it’s also important to offer a comprehensive education program about the benefits and the choices that employees have to make. Best practices include using every possible medium, from face-to-face meetings to group meetings, offering print materials and Web materials. One new practice emerging is to bring in personal guidance for employees in planning their retirement. And include spouses in the meetings. So you need to have them at multiple times, including during lunch and after hours, so the whole family can be involved in these decisions that affect them all.

So much of the language of insurance benefits is jargon-filled. Isn’t it tough to even understand the choices, let alone decide between them?

Yes! It’s very important to simplify the language and put jargon into plain English. What we found is that employees are embarrassed to say that they don’t get words like deductible or co-payment, because they think they ought to know what all these terms mean.

Employers also need to use the same terminology for all communication, so what is online, on paper, and in the plan documents all say the same thing. Ideally, you want employees to be able to understand their options at a glance by synthesizing the information down into digestible chunks. Providing worksheets or spreadsheets, where employees can plug in their own personal information and calculate their benefits, is also good.

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