Originally published in The Purpose Of Money January 22, 2023
Since the labor market shifted in the last few years, employers have spent time and resources trying to design benefits packages catering to the needs of millennials.
In the residual tailwinds of the Great Resignation and a turbulent market, a new generation is entering the workforce – Generation Z.
Gen Z has members born in 1995 or later. They’re just finishing their education and entering the workforce for the first time, seeking opportunities, and they have different desires and concerns than the previous generations.
Gen Z members are discerning in their job search, so competitive employers must provide support and flexibility if they want to attract top talent. Attractive benefits packages are a great tool to attract future Gen z employees.
Onboarding employees is always an investment of time and resources, but it takes a little more with employees like Gen Z who are completely new to the workforce. You need good benefits as a competitive factor to attract talent, but that’s not worth much if your employees don’t know what makes one benefits package better than the next.
Health insurance is essential for any employee, but Gen Z is also looking for wealth and income protection benefits, tuition reimbursement, and other benefits. They don’t automatically know their options, how their benefits work, or how these decisions impact their future.
As an employer, you can help your employees understand why the benefits are competitive while protecting their interests simultaneously, increasing job satisfaction and reducing attrition.
Arguably the most crucial employee benefit, health insurance is a new concept for many Gen Z employees. Before entering the workforce, these job candidates have been on their parents’ health plans and may not understand all the decisions that go into choosing the right insurance plan.
Health insurance has a financial impact now and in the future, if someone decides to get married or have children. Gen Z employees need to understand their benefits, the pros and cons of each insurance plan, and how to choose the best plan for their needs.
At a minimum, educate Gen Z employees on the following:
Gen Z employees should be educated about how health insurance premiums are divided between themselves and their employers. They should also understand how a deductible and coinsurance impact their monthly premium to make an informed decision. A low monthly premium may seem attractive, but they may not notice it comes with a high deductible.
Deductibles have a huge role in a health insurance plan. Employees must understand how deductibles work and how their choice could influence the price they pay for their healthcare services, preventative care, and prescriptions. Insurance plans with high deductibles can significantly impact their financial future.
Each healthcare plan has a different copay, and copays are the employees’ responsibility. Generally, the higher the upfront premium, the lower the copay. Some copays only go into effect after a deductible is met. These details are essential for employees to understand as they navigate their plan options.
In-Network vs. Out-of-Network
Most health insurance plans work within a network where the insurer contracts negotiated rates with healthcare providers. The health plan enrollees need to understand that seeking care outside the network may mean higher costs associated with their care and how that may impact their health. With some plans, an out-of-network provider may mean no financial assistance from the insurance company.
If your company offers health savings accounts or flexible spending accounts, educate employees on the value they hold and the advantages they have. Employees may not immediately recognize the difference in a tax-advantaged account or understand that something like a health savings account may go with them, even if they switch jobs.
Health insurance plans must cover ten essential services under the Affordable Care Act. Ensure employees understand these services to make a decision about their healthcare plan.
Wealth and Income-Protection Benefits
American education doesn’t include much financial education, even in college, unless the student studies finance, accounting, or similar fields. Because of this, some fresh graduates don’t have the tools to make sound financial decisions that may impact their future.
Educational programs from employers help employees understand the benefits they’re offered and how planning now can preserve their future financial health.
Tuition Reimbursement or Continuing Education
Tuition reimbursement and similar benefits appeal to job candidates, but each offer may differ. If you offer similar benefits, educate employees on the options available to them and under what conditions.
For example, tuition reimbursement may only pay for an employee’s education up to a specific price or within a particular program or field of study. Students may also need to have satisfactory academic progress. Any conditions attached to tuition reimbursement should be clear to the employee before they enroll in a program.
Tips for Educating Gen Z on Benefits
Not sure where to start? Here are some tips to make the benefits education experience more engaging and valuable for Gen Z employees.
Make Plans Customizable
Employees have different concerns, circumstances, and family dynamics that may affect their benefits decisions. Instead of offering a one-size-fits-all plan, employees are more confident with a customizable benefits plan that they can tailor to their needs and financial goals.
If possible, offer a range of benefits aside from health insurance, such as vision and dental, income and wealth protection, and tuition reimbursement. Employees then can choose the most cost-effective plan for their needs.
Educate Them on Their Options
Employees must be fully aware of their options and how they get value from their benefits. For example, a fresh graduate may not appreciate the value of having health insurance while they’re young and healthy or the benefits of setting up retirement plans early in life.
Lack of awareness and education about benefits offerings are significant barriers for Gen Z employees, so it’s essential to communicate with them effectively. You can use tools like workshops or forums with question and answer segments, enrollment meetings, and archived resources. Having a mix of different education options ensures that all employees can access the education they need.
Talk About Benefits Outside of Open Enrollment
Benefits tend to come up during open enrollment periods. While this is an excellent time to discuss benefits, it doesn’t have to be limited to this time period. You should discuss and educate employees about benefits throughout the year and around significant life changes, such as employees starting a family. These changes in their lives will mean changes in their benefits plan that they may not be considering.
You should also set up an education channel that provides employees with information about benefits to prepare for life changes and open enrollment. Include information about terminology, health insurance plans, and guides for choosing the right benefits.
Protect Gen Z Employees’ Future with Benefits Education
Gen Z is the newest generation entering the workforce. As their employer, it’s essential that you not only offer competitive benefits but educate Gen Z employees to help them make the best decisions for their individual needs and goals.