Employees Express Concern About Adequacy of Health Benefits

In addition, many do not know what they are paying for health insurance, a survey finds.

Fifty-four percent of employees do not know the out-of-pocket maximum for their employer-sponsored health insurance, 33% do not know their deductible and 30% do not know either, according to a survey commissioned by Assurant Employee Benefits, part of Sun Life Financial.

More than three-quarters (77%) of employees are concerned about overall financial risk with employers cutting back on health care coverage. Sixty-two percent agree that employer-provided health plans are rarely enough to cover unexpected costs, and additional coverage is needed.

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In addition, 87% say more customized benefits choices that fit their lifestyles would help them make the right health plan choices.

The study report, “Voluntary Benefits: An Unknown but Needed Option,” suggests that due to  health care costs continuing to rise, American workers need to adequately understand what voluntary benefits are. The survey found 94% of employees consider “other” insurance offerings important when choosing a job, and 43% feel they do not have enough information from their employers regarding voluntary benefits.

“Benefits communication is a crucial component of enrollment for employers,” says Joi Tillman, vice president, Voluntary, for Sun Life Financial. “This study shows us that with good education and communication, employees will not only understand the importance of voluntary benefits, but they will seek them out for both health and financial protection.”

Automatic Retirement Plan Features Give Millennials an Early Start

In addition, more savers are leveraging HSAs as a tool to increase overall retirement savings, an analysis suggests.

Ascensus analyzed data from its 40,000 retirement plans and 200,000 health savings accounts (HSAs) and found automatic plan design features are driving higher enrollment rates.

Plans with automatic enrollment features see an average participation rate of 78%—9% higher than participation in plans without automatic enrollment. Plans that combine automatic enrollment and automatic increase have an average participation rate of 81%.

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In addition, as automatic features become more prevalent, a majority of Millennials entering the workforce are enrolled in their employer’s plan and begin saving earlier in their career. If they continue to proactively manage their savings strategy, this generation could be in a much better position to fund a comfortable retirement by the time they reach retirement age than those at retirement age today, Ascensus says.

Ascensus data also shows HSAs are favored among savers at or near retirement. Savers older than 55 account for 34% of the HSA assets on the Ascensus platform, suggesting that more savers are leveraging HSAs as a tool to increase overall retirement savings.                                                                     

Other trends the analysis found include:

  • Online capabilities continue to gain traction and promote smarter saving. Ninety percent of new clients onboarded in 2015 opted to enroll employees online. Additionally, online-based retirement calculators are still being used and promote better savings habits. Twenty-nine percent of participants who used the Ascensus online retirement calculator started saving immediately following its use at a 9% deferral rate.
  • HSAs are becoming increasingly popular among all age groups. The number of overall HSA accounts increased 22% in 2015, with 16.7 million open accounts. Similarly, the number of assets in these accounts also rose steadily to $30.3 billion, a 16.7% increase year over year. Current projections show this growth continuing and the HSA industry reaching $50 billion in assets by 2018.

Additional trends and insights about retirement savings and HSAs, as well as college savings plans, is available on Ascensus’ newly launched website, http://pulse.ascensus.com.

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