As HR professionals, it’s our duty to help our employees not just be physically well but be well emotionally, financially and socially. Total wellbeing programs work, helping to keep employees engaged and productive. But what happens when an employee is forced to give up one aspect of total wellbeing to support another?
I was at an Open Enrollment planning meeting with a client – this was many years ago. We’d gone over the health care renewal (costs were flat) and other H&W plan design changes. The client then advised me that “based on the results” of the employee survey they did, they were going to increase the 401(k) match.
The company did not plan on increasing its total benefit spend, so to pay for the match they were planning on increasing employees’ health care premium contributions.
When I asked whether that was what they wanted to tell employees, the client said “of course not.” So when I asked the obvious follow-up question — how then did they want to position it — they said that employees were used to being informed that health care costs were rising, so we should just tell them that. (What a learning experience that was for me! When I got to the office I asked to be removed from the account.)
What was particularly annoying was the client only had about 65% of its employees participating in the 401(k). Somehow, I doubted that increasing the match was going to improve that — faced with higher health care costs, employees were even less likely to be able to participate in the 401(k).
Skyrocketing healthcare costs, pharmacy drug costs, premiums and deductibles are putting so much financial strain on employees that they are reducing—sometimes even foregoing altogether—saving for retirement to pay for increases in premium contributions and out-of-pocket health care expenses. At the same time, employers, too have reduced their contributions to employees’ retirement needs as health care costs consume an ever-larger slice of the total rewards pie. Call it a Faustian bargain (a deal in which one focuses on present gain without considering the long-term consequences), or robbing Peter to pay Paul. However you look at it, having employees forego one pillar of wellbeing to support another can have devastating effects for both the individual and the organization.
Thankfully, not all hope is lost. With advances in technology and data analytics, employees have access to tools that can analyze their individual needs and optimize their plans both for health and retirement. Here are six ways you can help employees keep total wellbeing whole, and not something they have to sacrifice.
- Before making changes to plan design, consider how they will impact your employees in the long term. Create “use cases” to identify any extreme impacts of plan design changes before those changes go into effect—and adjust the design, or your communications, if needed. And if you make changes, how are you telling employees how those changes affect both retirement savings and health coverage?
- Help employees understand how your online health and retirement tools work. Many employees are overwhelmed by the choices and decisions that they’re faced with and required to make.
- Create personas that employees can use to model their decisions. Often employees make plan selections that are ineffective for their needs. Having the ability to make decisions based on personas that match their circumstances could lead to lower costs, and more effective coverage.
- Conduct periodic audits of your plans to identify ways to improve efficiencies, making plans more affordable.
- Encourage positive lifestyle changes. Employees and their families, when engaged in healthy lifestyle practices, will see a lower overall cost for their health insurance. In the long term the money that’s saved on healthcare can lower premiums and keep their retirement fund growing.
- Don’t be afraid to talk to your employees about how to make good choices. It’s understandable that, for most employees, costs become their main worry, but being open with them leads to a more engaged workforce, which is a great resource for any organization.
While Faust may not have been seeking a lower deductible plan, and Paul may have simply been trying to rebalance his 401(k) plan, the fact still remains that employees frequently need assistance when making short- and long-term life decisions. What my client wanted to do – putting employees in an untenable postision – was a stark reminder of why considering all of the implications of plan design changes (not to mention carefully crafting surveys) is so important.
And the benefits to the company go beyond a workforce that’s engaged and productive. Research shows that workers who are unable to retire are costing companies thousands of dollars a year. So helping employees stay balanced by being healthy today, and saving for tomorrow, can have short- and long-term benefits for everyone.