Open enrollment season is almost upon us: The 2018 open enrollment period will run from Nov. 1, 2017 to Dec. 15, 2017 – representing a shorter enrollment period than in the previous four years. As employers prep for a time that is notorious for being stressful and confusing for employees, it can be helpful to look at the different needs and habits of various employee types so that you can be ready to address their concerns and priorities. It’s also a great time to change the conversation about benefits and to remind employees what they are getting, how much it’s worth and why they need to own their benefits decisions.
Part-Time and Freelance Employees During Open Enrollment
With more than one-third of workers now engaged in the gig economy – a number projected to reach 50 percent by 2020 – concerns about the financial security of these workers are growing. Factor in the possibility of health insurance premium hikes of up to 23 percent next year, and part-time and freelance employees may face a major challenge during this open enrollment season. While several states, including New York, New Jersey and California, are pushing for portable benefits – benefits provided outside of the traditional employment relationship that can be taken from job to job or project to project – and there is a proposal in Congress to craft pilot programs around portable benefits, there are likely to be changes. Freelancers and part-timers shouldn’t bank on portable benefits yet. It’s important for these employees to have a plan in place now to manage cash flow, taxes and retirement, and HSAs can be outlined as part of the solution.
Baby Boomers and Gen X Employees During Open Enrollment
For consumers approaching retirement age, every choice made surrounding healthcare investments and benefits is high stakes. Employers and HR professionals must help Baby Boomers tackle the last of their open enrollment decisions pre-retirement and must also help them make the most thoughtful choices possible for their future. The same goes for Gen Xers. One approach is to encourage Boomer and Gen X employees to consider healthcare as long-term savings versus an annual sign-up. Healthcare is the number one cost in retirement. A study that Fidelity recently released showed that a couple retiring this year would spend a combined $275,000 on healthcare during retirement – a six percent increase over last year’s estimate. Shoring up to weather healthcare costs after retirement is critical when considering that, according to BlackRock, the average Baby Boomer only has $136,000 saved for retirement. An HSA’s triple-tax advantage, ability to cover healthcare premiums and out-of-pocket expenses after age 65 and investment capabilities make it a good place to save for the long term.
Millennials and Gen Z Employees During Open Enrollment
This time of year is ideal for encouraging employees to think long term about HSAs – in particular millennials, who are more likely to contribute to their HSA than other generations but also more likely to spend their HSA funds (according to a 2016 Health Savings Survey conducted by HealthSavings administrators and HSA Coach). That same survey also found that millennials are more open to financial advice than other respondents, meaning they may be more likely to change their minds about how to use their HSA. To make HSAs more relevant to millennials, the survey’s authors suggest using visuals that help them quickly understand how an HSA works, positioning an HSA as a savings tool and providing an example of the long-term impact of saving. For example, a study by the Employee Benefit Research Institute on lifetime accumulations and tax savings from HSA contributions showed that, assuming a five percent rate of return, a 30-year HSA account holder who contributes annually at the allowable limit could save up to $313,000.
For recent graduates struggling to understand the basics of health benefits, it’s never too early to start planning to help them during open enrollment. Meet Gen Z employees where they are most comfortable – on their devices. Wearables, apps, social media and online support are all familiar tools and modes of communication for younger workers, so bringing these capabilities to the forefront of your benefits communications will help to engage them in the benefits-selection process.
Given recent studies that indicate employees want further guidance on the open enrollment process, now is the time to make sure that your strategies to better engage and educate individuals are in place.