-- Roughly Half of all Employees Wish Benefits Enrollment Happened More than Once A Year; Workplace Event Arouses Feelings of "Responsibility," "Ability to Protect" --
-- Growing Desire By Employees – Particularly Workers under 35 – to Understand their Life-Stage Options; Strong Unmet Demand for Easy-to-Understand Rules of Thumb --
NEW YORK, September 25, 2006 – At a time when competitive pressures have forced companies to shift the financial burden for healthcare and other employee benefits from "employer" to "employee," MetLife’s 2006 Study of Open Enrollment Benefits Trends shows that a majority of workers look forward to their company’s Fall benefits open enrollment period. The survey reveals that most (43%) employees say their company’s open enrollment period makes them feel "responsible" – like a good protector. Few employees indicate that they feel "detached" (6%), "annoyed" (3%) or "overburdened" (4%) by the selection process. And, two-thirds (66%) believe the cost of benefits offered by their employer are less expensive than if bought on an individual basis.
"In this age of ‘consumerism,’ open enrollment is often the one time of year when employees have the chance to act like true consumers by evaluating their benefits coverage and ensuring that they don’t have gaps or costly overlaps in coverage," said Dr. Ronald Leopold, vice president, Institutional Business, MetLife. "Today’s employees really care about their workplace benefits. They know that it’s up to them to build and fund their own personal safety nets as their health, wealth and protection needs change throughout their careers. Open enrollment is a window of opportunity to enroll in group benefits that are typically less costly and more convenient than if they were purchased on the employee’s own."
According to the study, the majority of employees agree that the cost of benefits offered by their employer is generally lower than the cost they would pay if they were to buy the same benefits on their own, although "value" not "price" is the biggest consideration. Most (54%) employees choose benefits that are priced in the middle – not the highest and not the lowest.
"In an era in which employees are asked to walk a higher tight rope than ever with respect to financial risks and their consequences, a strong personal safety net has never been more important," notes Dr. Leopold. "The MetLife study suggests that individuals increasingly recognize that it’s their responsibility to fund their own benefits, and they are willing to pay the price for peace-of-mind protection."
To help them make the best benefits decisions, most employees are hungry for support tools and workplace advice – especially in the areas of retirement savings (28%) and healthcare (28%). They want and need tools and rules of thumb to help them identify the benefits that are appropriate for their life stage or life situation. For example, single employees may favor disability income insurance and health savings accounts over dependent life insurance; while mid-lifers and pre-retirees are likely to be more interested in retirement income products and long-term care insurance. According to MetLife research, nearly three-quarters (71%) of employees would also like their company to alert them about additional insurance protection they should consider whenever they have a significant "life event."
Because seven-in-ten employees spend an hour or less reviewing their current benefits and selecting new coverage options, they need workplace advice that is succinct and easy-to-understand. Young employees under the age of 35 are particularly hungry for personalized guidance and rules-of-thumb. Nearly two-thirds (64%) of these young employees -- and 54% of employees overall -- say that they would definitely or probably sign up for financial planning, if it was offered through the workplace as a voluntary benefit (i.e., for which the employee pays all or most of the cost). In addition, employees under the age of 35 are more interested in hearing about benefits they have not had before than their older counterparts (46% vs. 34% of respondents age 55 and older), and having access to resources to help them better determine what changes they need to make due to recent life events.
"Employees are becoming responsible for protecting their own and their families’ ‘health’ and ‘wealth.’ Many now have the responsibility for selecting a health plan, identifying doctors and treatment plans, and protecting their families’ income in the case of long-term illness, workplace absences and/or death -- responsibilities that were traditionally taken care of by employers," said Dr. Leopold. "Younger workers in particular are looking to their employer to share the ‘information burden.’ The old model of inundating employees with information that they have to sift through doesn’t work anymore. In this environment, the employer’s role is shifting to one of customized support, education and coaching to help employees make the right benefits decisions for them and their families."
Dr. Leopold offers the following tips to help employees make benefits decisions during open enrollment:
Life-stage Matters. Consider the impact on your benefits if you have experienced a major life event (e.g., if you were married or divorced, had a baby, purchased a home or graduated from professional school).
With Healthcare and Dental Benefits, "Costs" are Relative. Make a list of the major preventative and diagnostic procedures you are likely to need and make sure your health plan covers those services. The "least expensive" plans will be those that cover the services -- doctor visits, pharmaceutical costs, test procedures -- that you use most. Consider any benefits your spouse may have so you don’t pay for double coverage if you don’t need it. Compare coverage levels and cost to get the best plans.
Be Thorough When Assessing Life Insurance Needs. When looking at your life insurance coverage, start by thinking about who is financially dependent on you and what they would need if you weren’t able to provide for them. Consider not only your day-to-day expenses and larger obligations -- e.g., your mortgage or rent, and childcare -- but also services you may provide for an aging parent such as cooking or cleaning. Remember that many employers only provide basic life insurance coverage (one or two times your salary), so if you have dependents consider purchasing supplemental coverage.
Increase Disability Insurance Every Time You Get a Raise. Disability insurance is designed to protect your ability to earn a paycheck. Employees should make sure that they have coverage that amounts to at least 60% of their income in the event that they are ill or injured and cannot work. Review your coverage as your income rises to ensure that the benefit is sufficient. Consider supplementing your group policy with an individual disability policy.
Save as Much as You Can for Retirement. If your employer offers a 401(k) plan match, it’s always a good idea to contribute at least enough to get the full contribution. Consider increasing your 401(k) contributions every time you get a raise. Weigh the importance to you and your family of creating retirement income, especially if you don’t have a company-sponsored pension plan.
Ask Your Employer About the Availability of Long-term Care, Homeowners and Auto Insurance. Most workplace plans offer group rates and convenient payment options. Unlike many traditional benefits (e.g., life insurance, health insurance), which employees can only elect during open enrollment season, many companies allow employees to buy long-term care insurance, homeowners insurance and auto insurance throughout the year.
Don’t Overlook Savings From Flexible Spending Accounts. These accounts allow you to set aside money on a pre-tax basis to pay for out-of-pocket medical and prescription costs. Check with your employer to see if dependent care, parking and public transportation costs can be deducted pre-tax as well.
The MetLife Open Enrollment Study was conducted in August of 2006 and was fielded by GfK NOP. This survey polled 1,204 full-time employees, age 18 and older, who have at least some say in the benefits decision-making for their household.
To see how MetLife is helping employees think through their employee benefits options, visit http://www.whymetlife.com/rules to get a copy of MetLife's rules of thumb for selecting benefits.
MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to millions of individual and institutional customers throughout the United States. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowner’s insurance and retail banking services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Outside the U.S., the MetLife companies have direct insurance operations in Asia Pacific, Latin America and Europe. For more information about MetLife, please visit the company’s Web site at www.metlife.com.
