Passing the Buck
If you're asking employees to manage their own benefits, you could be asking for trouble.
By now, you've heard the phrase consumer driven being
used to describe health care, Social Security and other plans. But
it might be better to use the phrase employee driven.
From health plans to retirement plans, employers are passing
more and more paperwork on to their employees in areas that used to
be the exclusive domain of HR and outside professionals. It raises
the question: Are employers asking employees to manage too much of
the work experience? And what are the risks?
Employers benefit from lower fees and fewer penalties by having
employees manage various plans on their own. Take Health Savings
Accounts, which allow employees to manage their health-care
dollars. The employee--not the employer--is subject to a financial
penalty if too much money is contributed to the account within a
calendar year.
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But there are costs to consumer-driven plans that could
overshadow the transfer of liability. Because consumer-driven plans
tend to be low-margin products for insurers, employees will be
pushed online, where they'll spend work time deciphering their
benefits. And that means less productivity on the job.
"Employees have to do more," says JoAnn Laing, president
of Information Strategies Inc., a Fort Lee, New Jersey, marketing
information company.
The prospect of more paperwork isn't sitting well with
employees. When Information Strategies surveyed 5,000 managers and
employees in December 2004 to gauge the effect of consumer-driven
health plans on worker satisfaction, it found 31 percent of
employees are uncomfortable with the requirements and education
being offered under the consumer-driven plans, and 41 percent
indicated they were receiving very little education regarding tools
and programs. "Twenty-two percent said they're not
complaining loudly because they're afraid of losing the
benefits," Laing says. "But they're feeling put upon,
and it demands more of them."
Employers have to recognize employees' differing
perspectives, says Susan Battley, leadership psychologist and CEO
of Battley
Performance Consulting in Stony Brook, New York. Employees over
age 40 who are used to a paternalistic view of health-care and
retirement plans will need more guidance than younger employees.
"It can affect people differently based on whether they've
had to adapt to this new environment," Battley says. She
suggests employers offer resources ranging from a knowledgeable
employee on-site to a toll-free number and online checklists.
Employers who ignore employee grumblings about the amount of
work they're asked to do to manage their benefits will
ultimately pay high prices in hidden costs. Do so at your own
risk.