By Joe Demelo and Craig Hewson

Imagine three companies with group benefit plans. ABC Company’s plan costs $254 per employee per month, DEF Company’s cost is $205 and GHI Company’s cost is $401.

Plan sponsors will often view a benefits plan offering as a way to show how much they care for the health and wellness of their employees, especially in the event of a death, a disability, high health and dental costs or when employee retires.

However, in general, employees might not always have the right perception of the value of the benefit offering.  This perception doesn’t differ much one plan to another regardless of the overall comprehensiveness of the plan.

So, how can a plan sponsor bridge the gap between perception and reality? The answer may be obvious to some, but perhaps not so simple. Effective and targeted employee communication is the only way to give employees and accurate understanding of the true value of a benefits pan. Not only is communication the best way for employees to understand the value of what the sponsor is providing, it also helps the employer to effectively manage a group insurance plan and ensure operates efficiently through a engaged and cooperative employee group.

Strategies to Strengthen Success
For a plan sponsor, an effective communication strategy on employee benefits, is a delicate balance of communicating the value of the benefits to employees while trying to meet specific company objectives. It becomes even more challenging if the central theme is a sensitive issue, such as rising healthcare costs and trying to engage and change employee behavior to help control rising costs.

So, how does an employer effectively communicate around these sensitive issues and still leave the employee with the perception of value? Whether the employer has chosen to hold an employee meeting or issue an employee memo, the following strategies can strengthen the effectiveness of the communication:

Set an appropriate frequency and tone for employee communication.
Group insurance plans renew annually – a perfect time to meet face to face with employees to answer any questions they may have and to reinforce the value of the plan to the employees. Any changes or updates throughout the year might warrant a memo to ensure that the employees understand what is happening and why. Some companies communicate more frequently and less formally, choosing a specific benefit to highlight with each communication, again enforcing the value of the benefits plan. In every case, remember to set the stage so that their feedback is welcome.

Determine the objective behind the message.
The issue must be worth communicating. Is it the purpose to inform employees their plan is changing, or to ask employees to be more accountable when they purchase benefit related items? If the employer is unclear about what the objective is, the results will certainly fall short or the employees will be left confused and possibly annoyed.

Be clear about the message.
Concise communication that is straightforward is essential. Don’t expect the employees to read between the lines and pick up on the hints being dropped. If the objective is to inform employees that their individual choice in pharmacy may have a direct relationship to their out of pocket costs, it should be stated clearly.
Don’t be afraid to bring others into the conversation when crafting the message. An abundance of information is available from third-party resources, insurance companies and independent advisors. Use these resources to support the intended message.

Use positive language.
Think about how many announcements start with a negative proposition followed by an unpleasant consequence. Avoid saying, “if claim costs are not cut and controlled, some benefits may have to be cut or the employee-share in the cost might have to increase.”  Try to focus on the advantages of shopping around for low cost pharmacies and then explain how employees can really make a difference to their costs and the sustainability of the plan. This will empower your employees to be part of the solution.

Try to be on the same page as the employee.
Employees tend to have very little understanding of the intricacies behind the sustainability of their benefits plan, particularly when it comes to their healthcare benefits. Case in point, employees take their prescription to the pharmacy without much thought beyond what they may need to pay out of pocket. In general, they do not understand, nor do they necessarily care if their health care benefit is over-utilized. As an employer, explain why changes were made to the benefits plan.  If it’s about sustainability and cost – tell them. Also, remember to use language that the employees understand, rather than industry jargon.

Be available for questions. In order for the employees to fully understand their benefits plan, they will undoubtedly have questions. Let them know that they can talk to a responsible person at any time and that their questions will be answered.

When used appropriately, these communication strategies work well to reinforce a perception of value of a benefits plan. The added bonus is that in time, employees will play a key role in cost management and make the benefits plan more sustainable as they team up with the plan sponsor.

Associate Joe Demelo and principal Craig Hewson help communicate better benefits as part of TRG Group Benefits & Pensions Inc.

(PeopleTalk Summer 2014)