Benefits May 25, 2016

Private Exchanges Engage Employees More in Health Benefits

A survey also found employees that use private exchanges value their employers’ benefits more.
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A survey of employees who use private benefits exchanges provided by Liazon, a Willis Towers Watson company, found 92% of employees are satisfied with the health benefit marketplace their employers provide.

Eighty-three percent of employees say they became more engaged in their health care decisions. Eighty percent of employees feel they spent the right amount of time selecting the right benefit for them; 87% feel there were the right amount of benefit choices on the exchange or want more; and 95% of employees indicate they prefer to select their own benefits.               

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They also found education and comparison tools to be helpful.

According to the survey findings, 83% of employees using private benefit exchanges are more aware of their medical costs, and 79% better understand what their health insurance covers. Eighty-one percent report they better understand what their other benefits cover.

Using private exchanges made 85% of employees more aware of their company’s contributions towards their health benefits, and 81% say they value these contributions more. More than three-quarters (77%) report they value their benefits more.

“The data show us that employees appreciate their benefits more when they are engaged in the process of selection and view the full cost of their plans. As private exchanges become a more popular form of benefits delivery, employers are beginning to recognize the model as a way to communicate the value of the benefits they are offering to their workforce,” says Ashok Subramanian, Liazon’s co-founder and chief executive officer.

The survey report may be downloaded from http://liazon.hs-sites.com/liazon/employeesurvey.
Data and Research May 25, 2016

Participants Would Like Sponsors to be More Hands-On

Many would welcome automatic enrollment and automatic increases.
Reported by

There is a disconnect between what retirement plan sponsors believe their plans should be delivering to participants and their willingness to measure retirement readiness, according to a new report from American Century, “Understanding Plan Sponsors’ Perceptions Around Plans, Participants and Partners.”

There is also a disconnect between what sponsors think participants want from them and how much more proactive participants would like their employers to be.

Ninety-one percent of sponsors say it is very or extremely important to help employees have a secure retirement, and 67% say that when measuring the success of their retirement plan, it is very or extremely important that participants are retirement ready. However, just more than one-third, 36%, of sponsors measure how ready their employees are for retirement.

Furthermore, while sponsors believe they are doing a good job of helping their participants manage their retirement plan, participants would like them to do more. Eighty-nine percent of sponsors are confident that they are doing a reasonable job of executing their defined contribution (DC) plan, but 58% think they should have done more to encourage workers to start saving sooner.

When it comes to encouraging employees to save for retirement, only 5% of sponsors think employees would prefer “a kick in the pants,” yet 13% of participants would appreciate this. And while only 15% of sponsors think their participants would welcome “a strong nudge,” in fact, 27% of participants between the ages of 55 and 65 would welcome this, and 28% of those between the ages of 25 and 54 would do so as well.

A full three-quarters, 75%, of sponsors think that participant education is important, yet only 46% think the education they offer is either very or extremely effective.

While nearly 70% of participants would like their employer to automatically enroll them in the plan at a 6% deferral rate, only 48% of sponsors have automatic enrollment in place. Seventy percent of participants say they are fairly interested in their employer boosting their contributions by 1% a year, yet the same amount, 70%, of employers do not have automatic increases. As to why, 46% of sponsors say they just have not considered it yet, and 33% fear employee backlash.

The report also found that 79% of sponsors work with an adviser, and 63% of them are very satisfied with their adviser. Sixty-six percent of advisers say their advisers’ integrity, and 65% say their expertise are important qualities.

 
American Century’s report is based on a survey of 2,031 participants and 498 sponsors.

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