Differences Among Millennials, Baby Boomers, and Generation X Have Implications for Plan Sponsors
by Paul Fronstin, Ph.D., EBRI, and Ruth Helman, Greenwald & AssociatesThese findings are part of the 2015 EBRI/Greenwald & Associates Health and Voluntary Workplace Benefits Survey (WBS), which examines a broad spectrum of health care issues, including workers’ satisfaction with health care today, their confidence in the future of the health care system and the Medicare program, and their attitudes toward benefits in the workplace. The survey was conducted online June 10–19, 2015, using the Research Now consumer panel. A total of 1,500 workers in the United States ages 21–64 participated in the survey. The data are weighted by gender, age, and education to reflect the actual proportions in the employed population. Visit here.
The Millennial Generation, also known as Millennials or Generation Y, is the demographic cohort with birth years ranging from the early 1980s to early 2000s (Strauss and Howe, 1991). Compared with prior generations, Millennials are more likely to be detached from traditional institutions (Pew Research Center, 2014).
Millennials are the largest age group to emerge since the Baby-Boom generation, and employers will have to make adjustments to how they engage them. Employers that have depended on employee benefits as a primary tool to recruit and retain workers may need to rethink the role that employee benefits play with Millennials. The remainder of this paper focuses on differences in opinions regarding employee benefits. Differences among Millennials, the Baby-Boom generation (individuals born between 1946‒1965), and Generation X members (those born between 1966–1976) are examined.
The Importance of Employee Benefits
While health insurance is by far the most important employee benefit regardless of age cohort, Millennials are less likely than Baby Boomers and Gen Xers to say it is the most important benefit. Two-thirds (67 percent) of Baby Boomers report that health insurance is the most important benefit, compared with 63 percent among Gen Xers, and 60 percent among Millennials (Figure 1).
Millennials are also less likely than Baby Boomers to report that a traditional pension or retirement savings plan is the most important benefit. Millennials are more likely than Gen Xers or Baby Boomers to report that they value life insurance and paid time off as the most important benefit. Over 12 percent of Millennials report that paid time off is the most important benefit, compared with 6 percent of Baby Boomers.
Overall, Millennials are less likely than Baby Boomers and Gen Xers to report that the benefits a potential employer offers are extremely important in their decision to accept or reject a job. Less than one-third (31 percent) of Millennials reported that benefits are extremely important compared with 39 percent among Gen Xers and 41 percent among Baby Boomers (Figure 2). Millennials are more likely to report that benefits were somewhat important.
Hence, it is not surprising that Millennials are more likely than Baby Boomers and Generation X to be open to non- traditional ways of obtaining benefits. Millennials are more likely than Baby Boomers and Gen Xers to report that they prefer to take the money spent on employee benefits other than health insurance (Figure 3) and they are more likely than Baby Boomers to be open to taking the money spent on health insurance (Figure 4) and decide for themselves whether to purchase those benefits and how much to purchase.
To read the entire report, with graphs & charts, visit here.
Millennials are more likely to respond that they do not know about their benefits than other workers. Millennials are, across the board, more likely than Baby Boomers to respond that they do not know if their employer offers them various employee benefits, and they are often more likely to respond that they do not know about their benefits than Gen Xers. For example, Millennials are more likely than Baby Boomers to respond that they do not know if they are offered cancer insurance, long-term care insurance, a pension plan, and stock options (Figure 5).
Participation in various employee benefit programs is also generally lower among Millennials than among Baby Boomers and Gen Xers, when workers are offered the benefit. While there is no difference in participation by age cohort for health insurance participation, differences are very small for dental and vision insurance, and participation in the following benefit programs is lower among Millennials: pension plan, retirement savings plan, stock options, health insurance for early retirees, disability insurance, life insurance, accidental death or dismemberment, critical illness, and pre-paid legal (Figure 6). Millennials and Gen Xers report that they are more likely than Baby Boomers to have supplemental health insurance for retirees on Medicare, long-term care insurance, home health insurance, pet insurance, and auto insurance.
It is not surprising that Millennials are generally less likely than Gen Xers and Baby Boomers to be engaged in employee benefits. When it comes to understanding the advantages of voluntary benefits, Millennials are less likely to report the advantages as strong advantages, and are more likely to report them as moderate advantages (Figure 7).
Confidence and Decision Support
Millennials are more likely than Baby Boomers and Gen Xers to be extremely confident in their ability to make informed decisions about benefits (Figure 8). However, Millennials are more likely than Baby Boomers and Gen Xers to be extremely likely to use an employer-provided, independent, third-party benefits provider, when provided at no cost (Figure 9), and more likely to take advantage of online programs (Figure 10). Despite the higher confidence levels and interest in using employer-provided resources to make decisions about benefits, Millennials are more likely than Gen Xers and Baby Boomers to report that offering separate open enrollment periods for health insurance and other employee benefits would be useful. More than four in 10 Millennials report that separate open enrollment periods would be useful (12 percent extremely useful; 31 percent very useful), compared with about 29 percent among Baby Boomers, and 34 percent among Gen Xers (Figure 11).