Continuing my dive into benefits technology and the components that you should look for when evaluating a solution brings us to one of the most important discussion topics: Recommendation Technology, also known as Decision Support.
Data taken from MetLife’s 15th Annual U.S. Employee Benefit Trends Study shows 64% of employees find Online Decision Support Tools helpful but only 36% of the companies they work for offer them. Educating employees on the benefits being offered is becoming increasingly crucial. The cost of insurance is on the rise and many employees still don’t understand how their benefits work.
Decision support tools come in a variety of flavors, from something as simple as a few questions asked to show how plans stack up against each other, all the way to deep analytical tools that can estimate out of pocket expenses. My belief is that although there is value in simple questions – the need for deeper analysis is necessary.
Most employers are starting to offer more than one medical plan and those that are typically include a high deductible option. This is where decision support begins to gain traction. Contrary to popular belief, offering more choices to employees doesn’t make the decision-making process easier for them.
Case in point: An employee is offered three options for a medical plan – a high deductible plan with HSA, a traditional co-insurance plan, and a richer plan with a standard co-pay. These are all good plan options but who they fit will depend on the individual enrolling in the plan. What do most employees look at when picking a plan option? The deduction from their paycheck.
So, an employee with no guidance picks a plan that causes the least damage to their paycheck… and then their spouse gets pregnant. They are going to be hit with the deductible and guess who they’ll blame? Their employer.
The additional help provided by decision support tools during the enrollment process will narrow down choice and also educate and encourage employees to pick the insurance plan best suited for their needs. Ideally with the right decision support solution, all of the specific details for each plan option will be loaded into the technology. The technology would factor in items like current financial situation and health status. The employee is then presented with questions that will help determine how their benefits might be used during the plan year. They can also account for something unexpected that might come up – because there is always the unknown. Based on the answers to those questions, some actuarial data and a pretty slick algorithm, the employee will now have a much better idea of which plan might be best for them. Not only do they see their hard dollar cost per pay period but also estimated out of pocket expenses which include co-pays, deductibles, co-insurance and the like.
Decision support will not only make for better consumerism but also helps takes the stress out of picking a plan. Factor in that added benefit with education that can increase participation in those high deductible plans, and it’s a win-win for employer and their employees. According to the 2016 bswift Benefits Study, employees who took a decision support recommendation were 74.75% more likely to end up with a high-deductible health plan and saved themselves 21.82% in premium costs – which ultimately led to as high as 14.7% lower premiums for some employers.
The optimal decision support technology will allow for recommendations not only on medical plans but dental, life, accident and other plans which require that extra guidance. This in addition to explanation videos, keyword glossaries and answers to other frequently asked questions gives the employee a tremendous amount of material at their fingertips and equips them to make better informed decisions.
Today it’s more imperative than ever to offer competitive benefit packages in order to retain and attract the best talent. It’s equally as critical that employees understand that benefits package and are equipped with the resources to select the plan offerings that will suit them the most. Show employees that you care about the decisions they make and want to provide the best tools possible when they are selecting benefits. Don’t overlook the value of decision support in a benefits technology solution.
If you have a question about benefits technology and want to have a conversation, pick up the phone and call me: (203) 985-1714.
Remember: Technology is only as good as the team that is behind it.