Communication Challenges Loom Large in Benefit Enrollment Process, Watson Wyatt Survey Finds

Complexity and Plan Changes Were Top Concerns of Employees

WASHINGTON, January 30, 2007 – Communication challenges topped the list of employer concerns during the most recent annual benefit enrollment process, according to a recent poll by Watson Wyatt Worldwide, a leading global consulting firm. This came as employers used the enrollment process to more fully engage employees in their health care buying decisions.

While employers were highly satisfied with the more transactional aspects of enrollment, they felt that improvements could be made in the areas of employee communication, health information and decision support. As for employees, they were most concerned with the growing complexity of the enrollment process and the level of plan changes, according to the companies surveyed.

Sixty-three percent of the 67 organizations surveyed cited employee communications as a top challenge in the recent enrollment season. Thirty-six percent cited more fully engaging employees as a top challenge.

“Annual enrollment has changed significantly at most companies,” said Jeri Stepman, Watson Wyatt’s national leader for health and welfare administration. “It’s moved from a transactional or registration-like process ­­­­­­– where the goal has been to automate and to increase efficiency – to an engagement and decision-support process – where the goal is to engage employees as benefits consumers. It’s the difference between, say, using the web to pay your bills and using more sophisticated online tools to model and manage your investment portfolio.”

Employers reported high levels of satisfaction with the transactional components of benefits enrollment – 75 percent reported being satisfied or very satisfied with the completeness and accuracy of elections – but were far less happy with the effectiveness of health-improvement information, decision-support tools and cost and quality information. Well under half reported being satisfied or very satisfied with those aspects.

According to employers, the complexity of the enrollment process and the number of plan changes were major concerns for their employees. Nearly 30 percent of employers reported employee concerns with each of those facets. The parts of the enrollment process that demand thoughtful decisions – contributions to health spending accounts, choosing between different plans, coordination with a spouse’s plans – were also mentioned as significant employee concerns.

“With many companies implementing consumer-directed health plans and health spending accounts, the stakes of these decisions are much larger. Employees need far more help throughout the process,” Stepman said.

Satisfaction with the process was highest for employers using a mixture of internal and external resources to support their employees through the enrollment cycle. None of the surveyed organizations using a mixture of outsourced and internal resources for employee support reported overall dissatisfaction with their process. In contrast, fully half of organizations supporting the process solely with local HR representatives were either neutral or dissatisfied, as were 42 percent of organizations primarily using outsourcing providers to support employees.

Copies of the survey report, “The Shifting Requirements of Benefits Enrollment,” are available here.

About Watson Wyatt Worldwide

Watson Wyatt (NYSE: WW) is the trusted business partner to the world’s leading organizations on people and financial issues. The firm’s global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 6,000 associates in 30 countries and is located on the Web at www.watsonwyatt.com.

Contact

Ed Emerman, 609/452-5967, eemerman@eaglepr.com
Emily Rieger, 703/258-7634, emily.rieger@watsonwyatt.com