Open enrollment can be hectic, but it’s also an important time of year. Typically occurring from October to December, open enrollment allows employees to select health benefits for the upcoming year. The choices made during this time are vital to an employee's health and financial well-being. Despite the critical importance, 55% of employees spend less than 30 minutes researching their benefit options, according to the 2019 Aflac WorkForces Report.
Employees are not only overwhelmed. They’re in the dark.
A survey found 35% of employees, and 54% of millennials, don’t fully understand any of the benefits they chose during open enrollment.
This confusion extends beyond insurance benefits. In 2021, 40% of 401(k) plan participants said they do not fully understand the fee information associated with their plan, as reported by the U.S. Government Accountability Office. With the help of financial wellness programs, employees can receive much-needed guidance and support to navigate their benefit options.
In addition to understanding benefits, financial tools (such as a money management platform or total rewards center) can help your employees determine what they can afford, allowing them to make smart financial decisions.
Paired with 1-on-1 guidance from a Certified Financial Planner™, employees can make critical decisions like increasing 401(k) contributions after a raise or determining the most appropriate insurance benefits needed when starting a family.
This benefit is not only needed, but actively requested by employees.
When surveyed, 66% of employees said they want their employer to help them better understand their employee benefits.
The support of a holistic financial wellness program equips your employees with the knowledge and tools required to navigate the open enrollment period.
Here are some standard benefit plan policies and how a financial wellness program can maximize employee benefits and support financial wellness.
How financial wellness helps employees engage with their benefits
Health, dental, and vision
Health, dental, and vision benefits are great ways to add value to employee compensation packages, and with the rising cost of health care, it’s widely considered essential.
There are many plans out there, and employees often overlook important details. Financial planners can help employees make informed decisions by analyzing many factors such as:
- Compare estimated yearly costs, not just monthly premiums
- Budget for planned expenses, such as orthodontic care for children
- Determine the right combination of premium and coverage based on medical needs
- Consider waiting periods and pre-existing condition clauses
HSAs and FSAs
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are prime opportunities for employees to maximize their benefits by setting aside tax-free income to cover medical, prescription, dental, and vision expenses.
Depending on your employees’ lifestyle, state of health, and upcoming plans, these accounts can serve as a great planning tool, but they require some forethought. Financial wellness programs and experts can guide the many facets of choosing the right plan, such as:
- Calculate contributions to minimize money lost subject to the use-it-or-lose-it rule
- Determine employer to employee contribution ratios
Retirement plan contributions
Retirement plans are crucial aspects of financial well-being. A well-thought-out retirement plan can offer your employees the peace of mind and financial stability necessary to thrive in their non-working years. There are several types of retirement plans to consider.
Employees need to understand their options to capitalize on their benefits and best prepare for the future. With the help of a financial planner, employees can:
- Identify sources of income during retirement years
- Plan for future expenses and goals
- Recommend investments and contribution amounts based on current cash flow and retirement goals
- Manage assets and risk
Disability and life insurance
Disability insurance will cover a portion of your employee’s salary if they’re unable to work. Financial planners can help employees navigate details of disability insurance, such as determining if coverage is right for the employee and how the benefit is taxed if they go on claim.
On the other hand, life insurance is a benefit paid out to a beneficiary should your employee die. Financial planners can help employees determine whether they’d like to take out a policy at all, which varies from employee to employee. A new parent, for example, may be more likely to explore life insurance than a recent college graduate with no dependents.
Further, financial experts can help those with a great need for a life insurance policy to determine if their employer-sponsored plan is enough, offering insight to employees who may want life insurance protection if they retire, change jobs, or lose their job.
Employee benefits have come a long way in regards to supporting the varied needs in workers’ lives. However, many employees still think of benefits as the traditional doctor visits and dental cleanings. Financial wellness programs can bring awareness to coverage your employees may not be aware they have access to, maximizing their benefit in ways like:
- Gain support in fertility and family-planning journeys
- Budget for education goals with tuition reimbursement
- Explore mental health stipends for services like therapy
Supporting employees beyond open enrollment
While open enrollment is the prime time to discuss benefit options with your teams, it’s not the only time to support employees in their benefit and financial wellness journeys. When provided with financial wellness programs, employees have access to the resources they need to maximize their benefits and reach their financial goals.
Employees can take advantage of services like 1-on-1 coaching, financial wellness sessions, and education resources throughout the year as quarterly or mid-year “check-ups,” keeping them on top of their goals and confident in their benefits and financial plans.