Strategic Enrollment

Bridging The Benefits Gap

More than ever, educations is key as outlooks on risk & time horizons are changing

by Ann Brisk

Ms. Brisk is senior vice president and Director of Strategic Partnership Growth for HSA Bank. Visit www.hsabank.com

As most open enrollment periods at U.S. companies wrap up, retirement plan advisors are shifting their focus toward benefits education going forward. The coronavirus pandemic (COVID-19) has altered or upended advisors’ outlook on risk, uncertainty, external factors, forecasting time horizons, and scenario modeling. Still, there are options to help advisors navigate benefits education over the coming year.

While COVID-19 has forced advisors to adjust how they deliver services, it has also highlighted the importance of Health Savings Accounts (HSAs) in financial planning. Advisors must also meet the challenge of working with multi-generation employees with varying degrees of engagement in their finances who participate in health plans that lean more heavily on technology.

Virtual Communications Bring Flexibility

The changes to everyday business interactions as a result of COVID-19 have also compelled advisors to rethink how and when to best inform employees of their savings and investment options, as well as communicate advice and maintain relationships virtually.

In response, advisors are now more comfortable using video conferencing technology to hold live employee group meetings or record sessions for them to view on demand—depending on the particular audience and whether the sessions are interactive.

In addition to virtual meetings, advisors should now consider sending more regular videos, newsletters and other forms of digital communication to employees, reaching out more frequently to answer questions and remind them of best practices throughout the year. Technology increasingly allows employees to absorb the content at their convenience.

Advisors may also want to give employees stuck at home more time to digest information, review plans and options, and calculate how they’ll work for them and their families. Virtual meetings offer a way to involve an employee’s spouse or partner in the decision-making process. In a world where parents may be working from home while also assisting kids with virtual learning, work deadlines are increasing and when employees could be caring for sick loved ones, flexibility in accessing plan information can make all the difference in engagement.

Increasing Employee Engagement

Communicating digitally also makes it easier for advisors to review and revisit goals frequently to ensure employees stay on track. With digital communications, advisors can track employees’ progress and adjust plans as needed. And tracking online content click rates helps advisors adjust future communications.

It’s important for advisors to get employees accustomed to engaging with their plans and benefits year-round. That’s because the engagement typically loses momentum after employees make their plan or benefits decisions for the year. Without consistent communication, employees rarely maintain the focus necessary to keep learning new ways to maximize their benefits to improve their health and wealth.

To help in these efforts as employees consider plans and benefits, advisors should provide them with educational tools that can empower them to run comparisons at their convenience. These can include calculators and videos, which advisors can make available virtually through email or an Intranet site. Educational tools often boost engagement as well as give employees the confidence they need to make investment or savings decisions.

Securing Funds For Medical Emergencies

Beyond the need to increase technology deployment, COVID-19 has taught advisors that employees should set funds aside for emergencies; advisors recognize that job reductions can happen unexpectedly and that medical expenses rank among the leading contributing causes of bankruptcies in the U.S. This matters, as consumers today show less confidence in their ability to manage their health needs. Numbers from the third annual HSA Bank Health and Wealth IndexSM survey showed that just 15% of 2,000 respondents said they frequently save money specifically for future healthcare expenses.

Advisors can help here by highlighting the importance of setting up and contributing to a medical emergency fund. To this end, more should consider including HSAs as part of their practices to ensure they’re providing a more holistic service offering and adding even more value to their relationships.

There remains a shortage of quality information on HSAs; 42% of those surveyed in HSA Bank’s study could not say whether their healthcare plan was HSA-eligible. Advisors can play an important role in demystifying and simplifying these plans and explaining the many benefits. They should discuss how HSAs’ money-saving opportunities—such as tax breaks and the advantages of employer-matching contributions—can make a significant impact on employees’ lives. The more money employees deposit into HSA accounts, the more distance they put between themselves and financial stress.

Let Employees Run The Numbers

When deciding between health plans and health accounts, encourage employees to consider all of the important numbers involved in making these decisions, including health insurance premiums, deductibles, out-of-pocket maximums, co-pays and the savings potential that comes from using an HSA to offset these costs...

Start conversations with HSA basics: making HSA contributions; understanding which expenses can be paid with HSA funds; downloading the mobile app; and naming a beneficiary.

Get employees to “do the math” behind their healthcare expenses and health plan options for themselves. When deciding between health plans and health accounts, encourage employees to consider all of the important numbers involved in making these decisions, including health insurance premiums, deductibles, out-of-pocket maximums, co-pays and the savings potential that comes from using an HSA to offset these costs. Running the numbers helps employees see for themselves the benefits an HSA can bring to their long-term health care savings strategy.

The 401(k) plan empowered generations of workers to take their retirement goals into their own hands. But HSAs remain the only investment vehicle in which employees can invest completely tax-free, allowing them to reach their retirement goals more easily. And unlike other investment vehicles, HSAs have no income limits, enabling highly compensated workers to enjoy the tax breaks.

In the retirement plan world, advisors have long proven their importance to employee communication. By applying a fraction of this attention to HSAs, they can make a significant impact on employees’ lives.

Different Needs For Different Demographics

Finally, advisors should continue to pay careful attention to the differing needs of various generations of employees. They can start by keeping communications simple and clear in both medium and message for all generations, as well as work harder to improve financial best practices among older employees.

Advisors will work with employees that are from different income and age demographics, something they’ve been doing for years in the retirement plan field. Still, different age groups require different communication approaches. For older employees, a simple Zoom call setup can work well along with proper instructions.

Be aware, financial practices for those nearing retirement are poor, according to HSA Bank survey numbers. While baby boomers—those between 56-75 years of age—showed only moderate levels of health and wealth engagement, 37% of people over 65 said they rarely save money for future health care expenses, even as 83% of those over 65 reported worrying about future medical bills.

The dynamic differs for the youngest generation in the workplace, Gen Z, who range between 18-24 years old and possess a high level of health and wealth engagement. This generation grew up in the era of Fitbit, and their familiarity with health and other forms of data tracking facilitates learning about plans and options. To be sure, this generation needs more education on how to use data-tracking information when it comes to planning for their health care or financial well-being.

Still, Gen Z’s interest in incentives and “gamification” broadens opportunities for advisors to find creative ways to reach them beyond just sharing brochures over email. As with the retail industry, advisors should strive to meet their audience on the terms that engage them the best.

Adapting To Fit Changing Times

Although COVID-19 has disrupted many aspects of people’s daily lives, most of the core principles of financial advising remain unchanged. While in-person communications may work best for relationship-building, expect virtual meetings to continue. Zoom calls reduce travel costs and time for advisors, especially when employees may be spread out geographically. Virtual meetings also help advisors disseminate messages quickly for any scenarios or plan changes that require immediate attention.

Remember that, individuals young and old learn best through a variety of methods. Advisors should provide content that engages employees in multiple ways and through multiple channels, such as attaching flyers, linking to educational videos and decision-making tools, or connecting them with other resources from benefits or plan providers. The most effective resources advisors can offer to make the communications personal are tools that help employees apply the information to their own lives.

COVID-19 has strengthened consumer engagement in financial and health-care planning, but education gaps persist. Advisors should take this prime opportunity to help employees bridge their knowledge gap throughout the year

 

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