cover
effective” in communications about benefits, whereas 40 percent of employees rated their HR departments somewhat effective” in communicating about benefits, and another 27 percent said communication was “not very/not at all effective.
Given the growing complexities brought on by health care reform, now is the time to begin closing that communications gap. More than half (55 percent) of employees rely on their HR departments to inform them about benefits, and that reliance will only grow in coming years.1 Workers will need to be educated and advised about the potential impact the flexible spending account limitations and caps will have on their budgets. Or, for example, large departures from traditional health care plans in favor of health savings plans alongside high deductible health plans will require a major education effort.
Addressing the Different Needs and Preferences of the Four Generations of Workers As if businesses don’t have enough to juggle, managing the new cocktail of company culture is increasingly important. The reality is that all four generations — traditionalists, Baby Boomers, Generation X, and Generation Y — each has its own work style and belief systems, and abides by different rules and expectations of the workplace. Businesses need to develop strategies to keep the workplace cohesive, while meeting the varying needs of each generation.
This rings particularly true when it comes to benefits options. The Aflac study found that only four in-10 employers currently tailor their benefits offerings to their employees based on their needs at different levels or life stages.1 Yet, there are clear nuances when it comes to different generations and their benefits needs. For example, life insurance has reached a 50-year low, with nearly a third of U.S. households not having any form of this financial protection.3 Many organizations were forced to trim benefits such as life insurance in past years, but businesses have options to offer this coverage to employees at no direct cost to the company through voluntary life insurance plans.
Voluntary life policies can be customized to best suit different life stages. For young, single workers who don’t have many financial obligations, term life coverage is a good base and affordable. For older workers who are trying to save for retirement, universal life policies offer the ability to adjust premium contributions to balance against savings for retirement or other personal goals. Financial planning and retirement savings is another area where different needs and goals will need to be addressed. A 2009 Financial Security Study revealed
that younger consumers represent the primary market for comprehensive financial and long-term planning. These workers place a high importance on financial security, yet are the least likely to feel they are financially prepared. The good news is they have time on their side. For many Baby Boomers, retirement savings were washed away when the housing bubble burst or during the recession, which means they’re now delaying retirement. They have little time to rebuild the wealth they lost in recent years. Further, a 2009 study by The Century Group found 74 percent of Baby Boomers rated health care costs as their greatest or second- greatest concern.
To retain the best employees, employers ought to consider building benefits packages that specifically address the unique needs of generations. For Baby Boomers, a package might include heavy retirement savings plans/incentives, health savings plans, or voluntary insurance policies. These plans help protect assets in case of serious accident or illness during time of need and are portable, allowing insurance coverage to be retained long after Baby Boomers stop working. For Gen Y workers, long-term financial planning tools, money management advice and perks, such as bonuses, work/life balance options and career development paths will be in high demand.
Preparing for Potential Upticks in Adult Dependent Coverage The provision under the health care reform law that allows young adults up to their 26th birthday to obtain health care coverage through their parents’ health insurance plans is a relative unknown for businesses and HR administrators across the country. This marks an important departure from traditional guidelines under which young adults typically lost access to their parents’ coverage once they turned 19 or graduated from college. How will employee populations respond to the availability of full coverage for dependents from ages 19 through 25?
The Department of Health and Human Services (HHS) estimated that 680,000 to 2.12 million young adults will gain coverage in 2011 as a result of this provision — mostly through new enrollment in employer-sponsored plans. The midrange enrollment estimate, which assumes moderate participation in the new coverage option, is that 1.24 million young adults will gain coverage in 2011. Slightly more than half of this group will have been previously uninsured, HHS estimates. Businesses will need to forecast and plan for potential cost increases, depending on the number of workers who choose to opt in.
March 2011 CA Employer 17
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27