Employee Benefits Plan Personalization

How to Put the "Fit" in Benefits

An important question for every benefits professional to consider:

What happens when you try to wear shoes that are too big for you? Or too small?

We've all been there. You find a perfect pair ON SALE and fall in love, only to realize that the store doesn't have your size in stock. But there's no way you're missing out on this deal. So you convince yourself you can go a half-size up (or down), and you buy the shoes.

It doesn't take you long to realize you may have made a mistake. After just a couple wears, you see that no amount of breaking in is going to stop the discomfort you feel when you wear the shoes - or the resulting soreness and blisters. It's simply not going to work. The size isn't right. They say, "If the shoe fits, wear it," but equally true would be, "If the shoe doesn't fit, don't wear it."

The good news is that the negative impact of an improperly sized pair of shoes is relatively temporary. Your blisters will heal. Your disappointment will fade. Improperly sized benefits, however, can have far-reaching and long-lasting consequences.

The Cost of Benefits Mismatch 

Just like with shoes, employee benefits can be too "big" or too "small," and neither situation is good.

Employees who have more health care coverage than they need waste their own money and their employer's money - and not just on premiums. The simple fact that they have the coverage encourages these employees to use it, whether or not they truly need to use it. For instance, an employee might wake up with a runny nose and think, "Well I might as well go to the doctor and get a bunch of tests done." Moreover, risk compensation theory can come into play, as the financial safety net provided by the oversize benefits makes employees more likely to be nonchalant with their health - so they end up needing more serious (and expensive) care down the road. Ultimately, over-insurance can inflate claims, driving up the cost of health care for everyone.

Under-insurance can wreak havoc on an organization, as well. While less coverage can mean lower costs for employers in the short term, the long-term effects are potentially catastrophic. Under-insured employees may forgo necessary treatment because they can't afford the expense, increasing the likelihood of prolonged or unplanned absences. Putting off care can also result in employees coming to work in poor condition - a situation known as "presenteeism," which can actually cost a business 10 times more than absenteeism. Furthermore, undersized benefits can create serious financial stress in the workplace, negatively impacting job performance and the employer's ability to retain talent.

So how can you make sure your employees have the right level of coverage to avoid such scenarios?

Use Personas to Match Benefits to Employees

As our health care system becomes increasingly user-focused, its important that you see your employees as consumers looking for products that fit their unique needs. In that regard, you're tasked with taking on the role of benefits marketer. And one of the biggest keys to good marketing is knowing your audience.

Your workforce is a unique mix of different ethnicities, generations and financial situations, and your benefits offering needs to reflect that, with an equally unique mix of products and programs that address the varied needs of the employee population. Sound overwhelming? It doesn't have to be. When marketers need to understand the makeup of their audience, they get help from personas.

Personas are fictional, generalized profiles of your employee population's distinct personalities, lifestyles and habits. To start, you compile your demographic information and learn as much about your workforce as possible. Benefits data analytics tools can provide deeper insight to help you identify how employees are currently using their benefits and managing their health. Surveys and focus groups are also a great way to add color. After you've done all your research, you assign each profile a name, along with a list defining characteristics that help guide your decisions on what benefits to offer. Here's an example:

Mark - The Young Invincible

  • Age 21-26
  • Single
  • $35,000 average income
  • Inseparable from his smartphone
  • Adventurous risk-taker who almost never goes to the doctor

From this persona, you can determine the mix of benefits that would best fit the "Marks" of your organizations (maybe a high-deductible health plan with an emphasis on an HSA, plus digital health services).

But the offering is only part of it.

Tailor Benefits Communication and Enrollment

You can't force your employees to select the right combination of benefits. But you can guide them in that direction through a personalized approach to communication and the enrollment experience.

Your personas can help you meet employees where they are and communicate in a way that will resonate. For instance, since your "Marks" are quite partial to their smartphones, you would likely find success engaging them via text or mobile app. As for the message itself, benefits content management tools enable you to segment your employee population so you can send the most relevant information to each persona. In advance of enrollment, you could communicate to all of your "Marks" on how contributing to an HSA can help them build financial security.

And while HDHPs may best the best fit for most the "Marks" in your organization, not all 25-year-olds are created equal. That's why you want to make it as easy as possible for employees to identify the coverage they need during enrollment. A consumer-centric shopping experience - complete with survey questions, plan comparison and data-driven cost estimation - gives employees the contextual cues they need to understand how their available benefits can fit into their unique lives. This empowers them to build a combination of core medical, ancillary and voluntary benefits that puts them in the coverage sweet spot.

As with shoes, when it comes to benefits, size matters. Don't let your employees walk around with coverage that doesn't fit them. Or else you'll have to deal with much worse than blisters and sore toes. 

Learn more about how you can build a benefits program tailored to your workforce in this on-demand webinar.