Despite the best efforts of brokers, more than 9 in 10 employees will select the same plan they had the previous year during open enrollment, a recent survey from Voya Financial found.
Although this research shows that inertia plays a role for employees in making benefits changes, it also found that nearly half of eligible employed Americans spend less than 20 minutes reviewing information related to their workplace benefits during open enrollment period. The good news is that nearly 80% of employees “strongly agree” or “agree” they will spend more time reviewing their employee benefits options and coverage this year than they did during the last enrollment period.
“The workplace annual enrollment period is the one time of year employees can review and engage with their employer’s holistic benefits package, which should not be taken lightly,” said Nate Black, vice president, health solutions product development, for Voya Financial. “While it’s encouraging that most employees will be spending more time reviewing their options this year, now is also the time for employers to be engaging and communicating with their workforce about the value of the solutions they offer.”
The survey found that workers are almost three times more likely to choose a Preferred Provider Organization over a High-Deductible Health Plan when the plans are labeled their branded names of “Traditional PPO” (74%) and “High-Deductible Health Plan” (26%). However, when plan names are unbranded, removing “high deductible” from the plan name, the preference gap narrows considerably: 52% chose the unbranded PPO, and 48% chose the unbranded HDHP.
“It’s clear that employees’ decisions can be driven by underlying, non-financial factors like inherent biases against HDHPs, their own inertia around decision-making and an aversion to high deductibles,” Black said. “As employees make several quick decisions during annual enrollment, further education and guidance around the benefits and solutions offered through the workplace is critical. Helping employees overcome these obstacles can enable them to make the best decisions and choices for them and their family — and potentially help create improved financial outcomes for employees and employers alike.”
The survey also found that only 3% of working Americans understand the full benefits of an HSA, which is only slightly higher among current HSA owners at 4%. Specifically, less than half of respondents were aware HSAs can be used to:
- Pay for health care expenses in retirement (47%);
- Provide tax advantages (47%);
- Roll money over from year to year (43%); and
- Be used as an investment vehicle (29%).
“This data underscores the notion that employees may be lacking an ability to build strategies to increase health care savings; cover medical and living expenses in retirement; or to use their account as an investment vehicle once the account balance reaches a certain threshold,” according to the survey report.