By Rob Grubka
The COVID-19 pandemic has shined a spotlight on the convergence of health and wealth. The fear of getting sick and possibly incurring expensive medical costs has American workers looking for help — and many are increasingly turning to their employers.
A new consumer survey from Voya Financial shows that close to six-in-10 American workers (56%) spent more time reviewing their benefits offered by their employer during the fall open enrollment period. This suggests that many employees did not simply hit the default button during open enrollment. The challenge is that more than one-third (35%) of employed individuals report not fully understanding any of the employee benefits they selected.
While confusion over workplace benefits is not a new problem, the stakes are certainly raised as we continue to navigate the global pandemic. Americans cannot afford to let common hurdles get in the way of helping them understand how to maximize the workplace benefits they selected during open enrollment. Here are five tips to break through the roadblocks:
1. Your benefits start with you: Voluntary benefits offered through your employer can be complex and confusing. Fortunately, most employers offer support materials to help their employees make sense of supplemental health benefits including accident insurance, hospital indemnity insurance or critical illness insurance.
Voya research reveals that more than half of employees (51%) did not use any of the printed materials their employer offered related to voluntary benefits options and coverages during open enrollment. The problem is further compounded by an employer disconnect on how successful they perceive themselves at communicating their benefit offerings to their employees. According to a LIMRA workplace benefits study, about nine-in-10 employers (91%) rank themselves as “successful” or “somewhat successful” at communicating their workplace benefits. When asked a similar question, just 70% of employees agree.
As a result, employees cannot simply sit back on their journey to advancing their financial wellness. Thoroughly review your benefits materials from last fall’s open enrollment. If you have questions, ask your HR department for help. In addition to printed and online materials, employers often have digital tools that can help provide a personalized view of your benefits selections.
2. Learn how to file a benefits claim before an emergency: Most employees typically focus on their medical coverage when they get sick or injured. This can cause them to overlook valuable optional benefits coverage they selected during open enrollment. As a result, it’s not uncommon for employees unaware of how voluntary benefits work to not submit a claim for a covered event — leaving paid benefits for which they are eligible on the table.
Ideally, the time to educate yourself on how the claims process works and what voluntary benefits you selected is not during a medical emergency. Plus, some employers may have a process setup with their benefits providers that will allow the provider to look for and automatically file a benefits claim on your behalf for certain qualified events.
When you consider that some voluntary benefit payments can be used for anything you need — such as paying for childcare, groceries or everyday expenses — it’s worth your time to understand how the coverage you may have elected can positively affect your health and wealth needs when you experience those covered situations.
3. Make your medical information work for you: Employers spend a lot of time determining their benefit lineups, and HR teams want employees to maximize the voluntary benefits they selected. To help do this, more and more companies are giving their employees the choice to “opt in” and share their private medical claims data with their benefits providers. By analyzing the medical codes in an employee’s medical insurance data, benefit providers can then proactively identify other coverages that the employee selected during open enrollment and help them take advantage of every potential claim opportunity. It’s important to note that an employee’s sensitive medical information is not shared with their employer.
Given the deeply personal and highly protected nature of medical data, you would think most employees would be unwilling to share this private information. However, in a recent medical claims integration pilot, Voya discovered that almost 50% of employees agreed to “opt in” and share their medical insurance data. While each of us needs to determine our own comfort level when it comes to sharing private information, putting your medical data to work is another way to help get the most out of your workplace benefits.
4. Maximize your health savings account: A health savings account (HSA) is a medical savings account that’s available to you when you’re enrolled in a qualified high-deductible health plan (HDHP). With the rising costs of health care, an increasing number of companies offer HDHPs in their employee benefits packages. Prior to the pandemic, industry research from the Employee Benefit Research Institute showed that almost half of Americans (46%) with private health insurance were enrolled in a HDHP. Typically, most HDHPs are combined with an HSA offering, which is funded by pretax dollars that are deposited into your account, usually through a payroll deduction.
As a result, HSAs have increased in popularity to help pay for unexpected medical costs, while also helping employees plan for and cover the high deductibles associated with these health plans. This has been especially true during the COVID-19 pandemic. According to a new report by Devenir Research, assets in HSAs increased 25% and the number of new HSAs increased 6% during 2020 — totaling more than 30 million health savings accounts in the U.S.
If enrolled in an HSA, you might want to consider increasing your contribution amount, if you haven’t already. For 2021, the HSA contribution limits are $3,600 for individuals and $7,200 for families. Individuals who are 55 and older are eligible for an additional $1,000 catch-up contribution. Unlike flexible spending accounts (FSAs), you don’t need to experience a qualified life event (e.g. having a baby) to adjust your HSA contribution during the year. In other words, you’re not locked in to the amount you selected during open enrollment. Plus, if you end up not using all your HSA dollars, the funds are not “use it or lose it.” The money builds each year and can even be invested when it reaches a certain dollar amount, which can serve as another way to help supplement your emergency savings from an unplanned health expense. 5. Start planning for fall open enrollment early: Industry research shows employees spend just 17 minutes on average enrolling in their workplace benefits, which is far short of the four hours spent by the average American when deciding to purchase a mobile phone. Even during a “normal” year without the backdrop of a global pandemic, this is not enough time to fully understand your workplace benefits — and this process will likely not get any easier.
Industry research reveals that larger employers are considering making changes to their benefit plans due to COVID-19. Specifically, between 25% and 34% (depending on employer size) are considering adding a new voluntary benefit to their lineup. Topping the list: student loan guidance, refinance and loan repayment; hospital indemnity insurance; identify theft protection and critical illness insurance coverage. Therefore, it’s important you consider your future needs now, so you can then focus time and energy this fall to learn about your new benefit options.
Remember, you are not alone
Making sense of your workplace benefits — that you either selected during open enrollment or are considering for the future — is something you don’t have to struggle to figure out on your own. If you need help, your company’s HR team can answer questions, provide additional information and likely provide access to online tools to help you think holistically about your health and wealth needs. After all, ensuring individuals are making the most of their benefits is a “win-win” for both employers and their employees.
Rob Grubka is president of Voya Employee Benefits.