Benefits are an important factor in attracting and retaining talent, but they’re expensive for both employees and employers. Everyone wants to save on costs and get the most of their benefits, and there’s one important tool that can drive these results – employee benefits decision support tools.
What Are Employee Benefits Decision Support Tools and How Do They Work?
In the benefits world, a decision support tool is an online resource that helps employees with benefits decisions. It’s an interactive tool that can keep employees engaged more than paperwork or print resources, helping them make more informed decisions.
The employee benefits decision support tool process is as follows:
- The employee answers questions about their household, personal expenses, and goals for benefits
- The tool educates the employee about their options and makes tailored recommendations based on their answers
- The tool guides employees through optimizing their contributions
- The employees use those recommendations to enroll in the benefits that best suit them
Let’s use an example of a 35-year-old man with a wife and one child.
Enter Information
Depending on the tool, the man will enter information about:
- Himself and his family
- The household income and location
- Routine health costs for the year
- Expected vision and dental care needs
- Planned or unexpected medical events
- Wellness incentives
- Childcare expenses
- Expected costs related to these areas
Receive Benefits Recommendations
Based on the information entered, the tool will provide recommendations for:
- Medical, dental, and vision coverage with monthly premiums
- Estimated costs for each option
- Optimize Contributions
- Based on the choices the man makes, he will then be given other benefits options like:
- Dependent Care FSA for childcare expenses
- A Health Savings Account to save on expenses
- A Limited Purpose FSA to save on vision and dental
- A 401(k) to save money for retirement
A good support tool will present these options and educate the employee about why they’re the best choices for them.
Review the Personalized Benefits Plan
When everything is completed, the man is presented with a summary of benefits choices that may include:
- Basic information about health coverage
- The accounts he enrolled in
- The dollar amounts that he should contribute
- His estimate savings
This information can then be used to optimize his benefits upon enrollment
Evaluating Your Current Employee Benefits Decision Support
It’s important for employers to choose a benefits platform with decision support to help employees understand the benefits selection process and make informed decisions. The support tools can come in many forms, depending on the vendor, so employers should consider the level of support provided and educational resources.
Recommendations
Some benefits marketplaces offer support by providing employees with the option of a recommendation engine that considers healthcare use and preferences, financial concerns, health concerns, and more. The tool then uses this information to generate tailored recommendations that match the needs and preferences of different products for each employee.
The Impact of Recommendations
Research from the Private Exchange Research Council (PERC) analyzed the impact of these types of recommendations and discovered some trends:
- Employees don’t always choose the highest- or lowest-cost plan
- Employees are more likely to choose HSA plans when recommended
- Certain employee groups were responsive to recommendations for specific products, such as HAS-qualified plans
- When given the choice, employees are making smart and careful decisions for how to spend their own money
Employees will ultimately make their own choices about benefits that suit their needs, but system recommendations are helpful for them to determine whether they need more or less protection.
Fundamentals of Decision Support
Benefits decisions have a big impact on an employee’s future. If they’re unfamiliar with benefits, the process can be daunting. They have a lot of decisions to consider and may not feel confident in what benefits they should choose, so they may choose plans that don’t align with their health and financial goals.
By taking different factors into account, such as age, location, family status, salary, and healthcare needs, employees can make informed decisions about the benefits available and prioritize according to their unique circumstances.
When employees feel empowered to make informed benefits decisions, they’re more satisfied with their benefits packages. They’re also happier with their employers and more likely to stay with the company.
Advantages of Benefits Decision Support Tools
Benefits decision support tools have numerous advantages for employees and employers.
Employees
Employees gain a better understanding of the benefit options available to them. In some cases, employees may not be aware of what they don’t know or what questions to ask. They may not understand what options are available. Decision support tools can educate them on the factors they need to consider when choosing benefits.
If employees have to research and make sense of benefits on their own, it can waste a lot of time. It’s time consuming and frustrating, especially if they don’t know a lot about benefits to start. Decision support tools reduce the time they have to spend on benefits decisions by providing personalized information and recommendations.
Finally, benefits decision tools ensure that employees are enrolling in the benefits plans that are most likely to give them value. This not only improves the benefits budget, but it has a dramatic influence on employee satisfaction.
Employers
Benefits decision support tools aren’t just for employees. When employees have the information they need to make decisions, they’ll enroll in the benefits that are best for their needs. This improves enrollment rates while improving employee satisfaction.
Employees are then happier with their benefits package and the enrollment experience, and by extension, their employer. This increases their retention and saves the employer money in turnover costs.
Giving employees the tools they need to make the best decisions reduces the costs for employers. They’ll only pay for the benefits they’ll use, maximizing the payout for the benefits budget for the employer.
ebm Employee Benefits Support
ebm offers benefits decision support tools to help your employees get personalized recommendations for their benefits packages. Our software integrates into your existing tech stack and works with some of the largest brokers, carriers, HCM, or benefits administrative tools to enhance the benefits experience.
Elevate Your Benefits Experience
With benefits and decision support tools, employees will have the education and guidance they need to make the right choice for their needs. Our benefits support software empowers both employees and employers to get the most out of their benefits packages.
