EMPLOYEE BENEFITS SELECTIONS “RECESSION-RESISTANT” AS NEARLY 9 IN 10 U.S. WORKERS PLAN TO MAINTAIN OR INCREASE COVERAGE FOR 2010, ACCORDING TO METLIFE’S LATEST OPEN ENROLLMENT POLL
Benefits Hold Steady and Confidence Levels in Selections High, Even Though More than One Third of Employees Report Less Discretionary Income
NEW YORK, September 3, 2009 – Millions of American workers will be making their employee benefit decisions in the weeks and months ahead during their employer’s fall “open enrollment” period – often the one time of the year when employees can make changes to their employee benefit selections for the coming year. According to MetLife’s new 2009 Open Enrollment Poll nearly 9 in 10 employees are planning to maintain or increase the number of benefits they select and/or their coverage for next year – despite the fact that over one-third (37%) of all employees said their household’s discretionary income decreased this year. Only 11% of workers plan to decrease their 2010 benefits coverage, and nearly one-quarter of those planning to decrease coverage this year will increase their benefits during next year’s open enrollment period if the economy improves. The poll of 1,000 full-time employees was conducted by telephone in late July 2009 on behalf of MetLife, which provides employee benefits to more than 61,000 companies in the U.S. reaching nearly 40 million employees.
“As we approach the fall open enrollment, employee benefits appear to be ‘recession-resistant,’ even though quite a few employees are feeling the economic pinch,” said Dr. Ronald Leopold, vice president for MetLife’s U.S. Business, and author of The Benefits Edge and A Year in the Life of a Million American Workers. “Recent economic events have caused many to be more mindful and appreciative of the benefits provided to them at work, which often form the foundation of their personal safety nets. In fact, despite some decreases in discretionary income, very few employees plan to pare back when it comes to selecting benefits for 2010. This shows that they continue to value their benefits as essential to helping them plan for the future while protecting themselves and their families.”
Confidence in Selections High, Few Regrets
Despite a changing economic environment, 89% of employees are somewhat or very confident in their ability to evaluate their options and pick the right employee benefits for themselves and their families. As a result, three-quarters of employees (76%) plan to spend approximately the same amount of time this year as last when it comes to selecting their benefits.
Only 13% of employees plan to spend more time during this year’s open enrollment period. Of those who plan to spend more time on their benefits decisions this year, more than half (57%) will spend an additional 60 minutes or more. As for their reasons for spending more time, 64% cite current economic events/financial security and 31% cite a major life event as the impetus. Additionally, 15% felt they made some wrong decisions on the employee benefits they selected during last year’s open enrollment period, which is interesting considering that only 3% of all workers surveyed say that they are not confident in their ability to evaluate their options and select the right benefits.
Family-Friendly Communication Needed
According to the poll, employer communication makes a notable difference in employee engagement in their benefits decisions. Of employees who say they’ll spend more time making benefits decisions this year, 29% say their employer has been communicating more about the importance of employee benefits.
“Employer communications regarding benefits need to be targeted in a way that encourages dialogue and address all family members, since half of employees share the benefits decision-making with their spouse or domestic partner,” Leopold added.
With this year’s Open Enrollment season quickly approaching, there are several steps employers can take to ensure that employees get the information they need to make informed decisions:
Total compensation statements: For employers seeking to improve communications, distributing personalized, clear and understandable Total Compensation Statements, which communicate to employees the value of their total compensation and benefits, should be a top and immediate priority. In fact, only 43% of employers provide a Total Compensation Statement, according to the Seventh Annual MetLife Study of Employee Benefits Trends.
Decision-support tools: As medical insurance decisions tend to consume employee mindshare during open enrollment, employees often spend less time thinking about their need for other benefits. But some of these other protection products (e.g., life insurance or disability) can have a significant impact on family finances during times of income loss. Tools like web-based calculators, which remain the #1 unsatisfied employee request, can advise employees on which benefits to select and proper coverage levels; many can be found free-of-charge on the Internet or through most benefits providers.
Personalized materials: Provide access to information based on employee life-stage and life events (e.g., getting married, having a child, buying a home). Recognize that the “one-size-fits-all” approach to benefits communication is not as effective, and employees want customized advice for “people like them.”
Multiple communication channels: Recognize that a diverse workforce will have people that want to receive information in different ways. This includes a mix of communication channels such as on-site educational programs, telephonic consultation services and on-line decision support tools.
Off-cycle enrollment: Over one-third of employees (38%) would be interested in learning about and modifying their benefits choices more frequently than once a year, in particular those that are planning on spending more time on their benefits decisions (64%). One solution is an off-cycle enrollment period with a focused enrollment on one single benefit. This could result in higher enrollment rates, and greater employee benefits satisfaction and confidence in open enrollment decisions.
Employee Benefits Simplified: Tips for Employees
MetLife suggests that workers consider the following tips when making their benefits choices this year:
Take time to do your homework: Make sure you thoroughly research which employee benefits are right for you. The benefits you select for the coming year can have a significant impact on your family's finances, so be sure to spend enough time to research and select your benefits.
Read the proverbial "big envelope," use online tools: When employees understand their benefits, they make better choices and tend to be more satisfied by and confident in the open enrollment process. Therefore, it's important for you to read your company's open enrollment materials from cover-to-cover. Many companies also encourage workers to read about their benefits offerings online, and some even offer web-based calculators and tools.
Consider making some changes each year: Very few people have the same benefits needs year-after-year. The fall open enrollment period is an opportunity to reevaluate your options and make changes. Make sure you consider changes or coverage increases, particularly if you've experienced a recent life event, such as getting married, having a baby or purchasing a home.
Don’t assume that a challenging economy means you’ll have fewer benefits choices: Most employers are planning to maintain – and some are even planning to expand – the breadth of their benefits offerings, especially when it comes to voluntary benefits. Voluntary benefits are paid for by the employee, typically at a significant cost savings due to group rates. Aging parents? Think about long-term care insurance. Sole breadwinner? Consider disability insurance. Buying a home? Access a legal services plan. New apartment? Don’t forget renters insurance.
Explore the advantage of pre-tax accounts: If your employer offers a flexible spending account for health care, vision and dental out-of-pocket expenses, consider that pre-tax savings can reduce your taxable income.
To prepare for the upcoming open enrollment decision process, the public can visit MetLife’s Employee Benefits Simplifier, a free online tool for consumers available at www.metlife.com/benefits. The tool helps workers identify which benefits are right for “people like them,” and offers suggested actionable life-stage recommendations – particularly when it comes to coverage levels and benefits selection.
The 2009 Open Enrollment Survey was conducted by GfK Custom Research North America in July 2009 via its OmniTel national telephone omnibus service. A sample of 1,000 U.S. full time employees, 18 years or older, at companies with 10+ employees, who are involved in the benefits decision-making process for their households, was accumulated over several OmniTel waves. Data in each OmniTel wave are weighted to be representative of the total U.S. population on the basis of age, sex, education, race, and geographic region. The employed subset of OmniTel is then balanced as a subset of the U.S. population.
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. For more information, visit www.metlife.com.