Today I want to talk about something that is very important to all of us: choosing the right benefits. I relate to this because as someone with a wife and two small sons at home, it’s absolutely critical that I choose the right benefits for my family.
Given that I’m responsible for HR & Benefits within Ultimate’s UltiPro and I’ve spent my entire career studying and managing benefits solutions, I am fortunate to have the knowledge and tools necessary to make informed benefits decisions. Unfortunately, for most people, knowing how to differentiate and select benefits can be confusing and daunting. This fact is very concerning because outside of buying a house and saving for retirement, choosing the right benefits is probably the most important decision a person will make.
At this point you may be thinking, “He’s just saying this because he has spent his career in benefits.” This may be true but let me explain it from my vantage point.
The reality is that benefits are important because of their potential impact on one’s personal and financial well-being. Based on recent data from Mercer, an employee’s annual healthcare cost for a family of four is expected to top $10,000 in 2012. That is approaching almost $1,000 per month! At that level, we are in the ballpark of a monthly mortgage payment.
This is where the similarities end.
The reason is that unlike buying a house, if you choose the wrong benefit plan you could suffer catastrophic financial losses should you get sick or have a health problem that is not covered. Even worse you might not even be able to get the medical treatment you desperately need. I think this makes it pretty clear why understanding how to choose the right benefits is important.
What’s ironic is that most people spend only a few minutes choosing their benefits and do so with very little information. This is where the need for benefits decision support comes in.
As a business owner or HR leader who wants your people to make informed benefit decisions, it is critical that you provide the tools for them to do so. This includes: 1) definitions of key benefit terms, 2) the pros and cons of each benefit plan being offered, and 3) comparison tools that can be used to determine the benefit plan that is best tailored towards their unique personal situation.
Historically speaking, people have relied on their employers to provide the information needed to make informed benefits decisions. This approach, however, is becoming ineffective at a very rapid pace. This is because the younger generations entering the workforce rely almost solely on their social networks for all kinds of advice. Now I’m not new to the workforce, but soliciting benefits advice from my friends and family using my social network seems like a much better approach to me.
So my message is, take your time and be wise in your benefits decisions. If you are the person responsible for benefits management in your organization, take it upon yourself to provide your people with the information and tools they need to make informed benefits decisions. Put yourself in their shoes. Failure to do so can have terrible consequences for everyone.
Here’s to putting people first.