Weekly Wrap: Open Enrollment? It May be a Pain, But it REALLY Matters

I’ve been getting hit a lot recently with news and surveys about a topic that I know is near and dear to many hearts: open enrollment.

Yes, I know in reality that just uttering the phrase “open enrollment” probably makes your eyes glaze over, because an organization’s open enrollment period — which usually takes place in the late summer or fall — is one of those pain in the rear, paperwork-and-compliance exercises that all too many HR pros have to grit their teeth to get through.

I get that, but there’s something else to consider when it comes to open enrollment: it’s really, really important, especially in this age of rapidly rising health care costs, federal mandates, and wellness initiatives.

The fact that so many employees (and maybe HR pros, too) view it as a paperwork-pushing pain in the ass, well, that just shows that we don’t do a good job stressing the huge impact that the right open enrollment decisions can have on workers for the next 12 months.

Workers making “avoidable” benefits mistakes

Want proof of what I’m talking about? Well, here’s a new survey from Aflac — the Open Enrollment Survey of the Aflac WorkForces Report — that makes all of this pretty clear. Here are some of the not-so-surprising findings:

  • More than three quarters (76 percent) of American workers admit to making mistakes about their benefits decisions in the past;
  • 42 percent of workers say they have wasted money each year because of mistakes they made with their insurance benefits;
  • More than four-in-five Americans say they are at least somewhat concerned about the possibility of an unexpected medical expense.

“Far too many American workers are making avoidable mistakes in benefits coverage decisions — from not meeting deductible amounts to contributing too little to Flexible Spending Accounts — and, as a result of their lack of understanding or confusion, they often pay a price in multiple ways,” said Audrey Tillman, executive vice president of Corporate Services at Aflac, in a press release about the survey.

For example, in terms of cost-bearing mistakes and their consequences, the most common include not electing available benefit coverage such as vision, dental or voluntary, choosing the wrong level of coverage and putting too little in flexible spending account.

As a result of paying unexpected out-of-pocket medical costs, 65 percent of workers have had to make sacrifices, including cutting back on social activities (40 percent), luxury items (34 percent), purchasing gifts (29 percent) and taking a vacation (28 percent). Others admitted to working more hours (21 percent), creating a strict household budget (21 percent), and increasing use of credit cards or line of credit (19 percent).

Article Continues Below

Employers can help with common mistakes

In addition:

  • Some 74 percent of workers say that when thinking about their choices for major medical insurance coverage, they only sometimes (or rarely, or never) understand everything that is covered by their policy;
  • More than half (59 percent) of workers who choose the same benefits year after year say they only sometimes (or rarely, or never) have a full understanding of the changes in the policies each year.
  • Although most do not fully understand their health care insurance policies, workers are worried about unexpected medical expenses. In fact, 83 percent of workers say they are at least somewhat concerned about the possibility of an unexpected medical expense, with 30 percent saying they are extremely/very concerned, considering their current financial situation.

“While workers certainly need to invest more time in making better educated decisions, employers can help by understanding workers’ most common mistakes, explaining their impact, and offering best-practice solutions,” said Tillman.

The Aflac WorkForces Report is an annual study analyzing the forces impacting the trends, attitudes, and use of employee benefits. It was conducted online in the U.S. by Harris Interactive on behalf of Aflac from August 11-15, 2011, among 2,220 adults ages 18 and older, of whom 980 were employed full/part time and responsible for insurance decisions.

In other words, this is a very current survey that probably does a pretty good job capturing current employee sentiment. It’s something you probably need to look at closely if you have any kind of a role in your organization’s open enrollment exercise, because it makes very clear that employees would be better prepared for their health care needs next year if they just spent a little more time this year adjusting to those needs right now, when it can make a difference.

Making less is the new norm

There’s more, of course, than the latest open enrollment survey in the news this week. Here are some other HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of HR and talent management. I do it so you don’t have to.

  • A more female-friendly Wal-Mart. Maybe Wal-Mart has gotten some religion. The New York Times says the company will announce “new programs aimed at helping women-owned businesses and women workers, as the company continues to deal with the possibility of individual claims of sex discrimination after the Supreme Court threw out a class-action suit by women workers this summer … (it plans) to source a total of $20 billion in products from women-owned businesses in the United States over the next five years, which works out to an average of $4 billion a year, versus the $2.5 billion a year it currently spends, and to double what it buys from women-owned businesses globally by 2016 … (it) also support training of women in factories and farms that are Wal-Mart suppliers, donate $100 million to causes supporting women’s economic development, and ask its vendors and services firms … to increase gender and minority representation on their Wal-Mart accounts.”
  • Workers making less is the new norm. Got employees grousing about their pay? Well, better get used to it, because according to this report in the Cleveland Plain-Dealer, Ohio is just one of  many states where pay has been dropping. “Most hourly wages of workers in Ohio dropped faster during the last decade than their counterparts in any other state, according to a report by Policy Matters Ohio … The report confirms what local economic experts have seen for years: Ohio has suffered massive job loss in the last 10 years or so especially in manufacturing, which created and sustained the state’s middle class. And most of those jobs seem not to be coming back. Ohio’s latest unemployment rate is 9 percent. “I just didn’t expect us to come in first (in the rankings),” said Amy Hanauer, executive director of Policy Matters.”
  • Managing 24/7 work expectations. Miami Herald workplace reporter Cindy Krischer Goodman tackled the topic of work-live balance in a world where there are more and more 24/7 workplace expectations. “Like most American workers, doing our jobs well no longer means checking out at 5 p.m. The race to get work demands completed each day and stay up with customer needs often keeps us attached to our computer screens or cellphones at all hours. People are getting these after-hours intrusions from all angles — from their boss, their colleagues, their customers, says Wayne A. Hochwarter, a professor of management at Florida State University. “I find it to be extremely stressful and sometimes it’s just excessive.”

John Hollon is managing editor of Fuel50, an AI Opportunity Marketplace solution that delivers internal talent mobility and workforce reskilling. He's also the former founding editor of TLNT and a frequent contributor to ERE and the Fistful of Talent blog.