When faced with a decision on a complicated subject, consumers sometimes hesitate to decide and end up missing opportunities for necessary financial protection. According to a 2008 Yale University study, decisions about insurance and financial products are among the most difficult.
As an employer, you can help your employees through the decision-making process by presenting helpful information in an organized and easily digestible way. First, you have to understand what may prevent them from making financial decisions, and then educate them on their options in a clear and relevant way.
How Employees Make Decisions
Consumers tend to take no action rather than face difficult choices. In many cases, they won't think to adjust their insurance after a major life event like a wedding, family death, or the birth of a child.
Employers can ease the process by bundling options, offering pre-selected options, and setting up automatic enrollment for essentials like retirement funds, that way employees don’t have to take time making the decision to opt-in.
When presented with too many options, most consumers make poor decisions, or in some cases, fail to even make one at all. Studies about buying behaviors show that consumers get overwhelmed when offered more than four or five benefits at a time. Employers should take the time to learn what their employees need and eliminate any unnecessary benefit choices to help prevent choice paralysis.
Consumers tend to make decisions based on what they know and avoid what they don’t. Employers can help guide employees by giving them supporting information about each benefit offering. For example, a 2006 Unum survey showed that 50% of employees purchased long-term care insurance because they had read the statistics about how many people actually need it.
Employees also need guidance regarding how different benefit options will impact their lives. You should place each benefit option into context to help employees understand how options fit together, and why they may be necessary for their lives and families. One way to do this is by utilizing benefit statements and personal benefit counselors to show employees how different coverages work together.
This step is also a good opportunity to discuss pricing. Employees can map out their choices as well as the overall cost, and then evaluate whether the options suit their budget. According to SHRM, “41% of employees can’t identify all of the elements that add up to the full cost of their health care, such as employee and employer contributions and cost of care.” So it’s important to use this time to educate employees about every element of pricing.
The last thing to consider is that consumers will often allow their emotions to dictate decisions rather than logic. This means any insurance that deals with critical illnesses, disabilities, or death may not get the amount of attention it requires. However, once these types of decisions are made, employees tend to feel relieved and optimistic. Take the time to educate employees about the financial risks of not purchasing the proper insurance, and use real-life examples to help make important points.
Ways to Educate Your Employees
As a general rule, you should provide your employees with multiple ways to learn about benefits and about three weeks to process the information before enrollment starts. An obstacle employers may encounter is the lack of desire from employees to learn about their benefits options, which is why it’s important to offer education in a variety of forms.
Employers should utilize different educational resources, including brochures, email, multimedia presentations, and interactive online decision-support tools, like Ask Emma. Ask Emma educates employees on the value of available benefits and tailors enrollment guidance to address their unique needs. The software also allows employees to answer key questions about their life, family, and health in order to help them make the best benefits decisions for their lifestyle.
Employers can also offer the assistance of a benefits counselor for one-on-one or group meetings. The addition of an expert allows employees to ask complex questions and get in-depth answers.
Once you understand how your employees make decisions regarding benefits and the type of assistance they may require when doing so, you can provide tools and resources to help them choose the correct plans. Employers often spend so much time putting together quality benefits packages but then neglect to educate employees about their options. Stay competitive and keep your employees satisfied by allocating time and resources to helping them make informed decisions.
Clarity Benefit Solutions offers educational tools and services to help employers provide high-quality benefits to their employees. For more information, visit our employers’ page today.
Sources:
1. https://www.benefitspro.com/2011/09/09/how-to-help-employees-make-informed-benefits-decis/
