Employers in today’s economy are caught between two opposing forces: rising healthcare costs and a hyper-competitive labor market.
According to an Aon analysis, employers will pay 6.5% more for their employees’ health plans in 2023 than the previous year; the average cost per employee will surpass $13,800.
Employers want to keep their benefits spending in check. But faced with unprecedented churn and waging a war for talent, employers are also aware that job seekers are in the driver’s seat. A generous benefits package can help attract and retain employees.
Human resources teams must find ways to optimize their healthcare spending while continuing to offer the high-quality plans that current and prospective employees demand. This means ensuring that each employee is enrolled in the best-fitting plan for their needs — no more, no less.
It’s a formidable challenge. Employees are notoriously reluctant to research benefits and are wary of trying new options. Most opt to stay with familiar plans rather than exploring options that may save them money or provide more appropriate coverage.
Fortunately for HR teams, a new class of digital tools has arrived to help employees make better-informed, more confident enrollment decisions while helping employers control healthcare spending: benefits decision support.
Decision Support: Your Secret Weapon to Reducing Healthcare Spending →
What Is Benefits Decision Support?
Benefits decision support tools are web or mobile apps that help employees understand and choose the best-fitting benefits for their needs. Benefits decision support tools are most often used to help employees select health plans.
A benefits decision support tool serves as a virtual advisor. Typically, the tool will ask employees to provide information about their current health and expected healthcare usage. Questions might include, “Do you or your spouse plan to become pregnant in the next year?” or “Do you take any medication regularly?
The tool will then use this information to project the employee’s costs for the various plans offered — including premiums, deductibles, and copays — and provide a side-by-side comparison.
Some benefits decision support tools boil each plan down to a single value score, which makes visualizing the differences between plans quick and easy.
How Do Benefits Decision Support Tools Work?
The most advanced benefits decision support tools use the same kind of algorithmic engines that many of us have come to rely on for choosing streaming video, music, and even dates. With just a little bit of information about individual users and a lot of information about the user base, these tools can make highly accurate predictions and reliable recommendations.
(Of course, this means that two of the critical differentiators between benefits decision support tools are the quality of the algorithm and the depth of the data. More on that below.)
Benefits Decision Support Advantages for Employees
Benefits decision support tools address many things that aggravate employees most about choosing benefits. According to a 2022 survey:
- 62% of employees say they don’t typically change their health plans from year to year because it is too stressful.
- Nearly half (49%) of employees feel pressured to choose the most expensive plans to ensure the coverage they need.
- 72% of employees wish someone would help them identify the best plans for their situations.
Decision support eliminates the need for in-depth benefits research and complicated calculations. Employees can easily learn which plans provide the best value for their needs and, with that knowledge, can confidently make changes. Many employees will be happy to discover that a benefits decision support tool can save them money without sacrificing coverage.
The best benefits decision support tools can be completed in minutes — not hours — with seamless, frustration-free experiences that make choosing benefits almost as enjoyable as online shopping.
Benefits Decision Support Advantages for Employers
HR teams work year-round to assemble benefits packages that appeal to employees, control costs, and drive recruitment. Benefits decision support makes all that effort worth it.
With benefits decision support, organizations can offer the costly, high-coverage plans that some employees require while boosting enrollment in more affordable plans, such as HDHPs.
Benefits decision support tools can also help increase employee satisfaction and engagement by reducing stress during open enrollment and ensuring each employee has a health plan that serves their specific needs. Employees are more likely to feel their benefits are working for them rather than draining their mental energy and bank accounts.
Benefits decision support tools also lessen the pressure on the HR team, especially during open enrollment. Employees typically have fewer questions and have less trouble meeting their enrollment deadlines. (Procrastinating is harder when the tool only takes a few minutes to complete.) Instead of holding endless informational sessions and answering the same questions repeatedly, HR team members can devote themselves to other, more valuable tasks.
Benefits Decision Support Helps You Contain Costs and Support Your Benefits Goals
HR teams struggle to have a seat at the table because they are seen as part of the “operations” wing of many companies, which usually costs the company money without driving down costs or growing revenue.
But we both know that’s a mistake. HR teams do help companies save money, generate revenue, compete for talent, and grow. But how do you quantify that?
- Migrate employees to lower-cost plans. For many employees, the health insurance premium is their largest yearly healthcare expense. Decision support tools provide a sense of neutrality, which increases the likelihood that employees choose lower cost plans, even those with scary-sounding words like “high deductible.”
- Reduce employee overinsurance. Similarly, risk-averse employees may overinsure themselves thinking that a lower deductible or reduced copays will reduce their spending in disaster scenario. But health plans are complex and trade-offs in one spending category can impact the cost of another category. Decision support tools let employees run different scenarios and lead them to the right plan, even if they’re risk-averse.
- Encourage employee contributions to HSAs and FSAs. These saving/spending accounts allow employees to use tax-free dollars to build an emergency fund to cover medical expenses, and are often used in tandem with a high deductible plan. These accounts are critical to HDHP adoption, as they eliminate the downside risk of a high deductible. And when employees utilize HDHPs, your company saves a lot of money.
- Improve retirement contributions. Supporting financial wellness is a critical aspect of total rewards, as financial stress is one of the top sources of discontent. Total rewards improves job satisfaction, productivity, reduces absenteeism, and improves employee retention.
- Drive enrollment into voluntary benefits. Voluntary benefits are cost-effective – sometimes free – ways for employers to cover gaps in coverage in your health insurance options. Some voluntary benefits – like childcare programs or wellness programs – provide value well beyond traditional plans.
- Save countless hours of time. Conducting benefits presentations, new hire presentations, answering common benefits questions over and over, these all take massive amounts of time throughout the benefits enrollment season. And they’re inefficient because they don’t provide employees what they really want: individualized attention that recommends enrollment decisions. But a benefits decision support tool can provide that 24/7 individual attention to every employee, freeing HR teams from answering redundant questions, creating slide decks, giving presentations, and all of the other time-intensive benefits enrollment tasks.
Choosing a Benefits Decision Support Tool: 4 Factors to Consider
While benefits decision support is a relatively new technology, it has existed long enough for several competing solutions to enter the market. Unfortunately, there isn’t a decision support tool to help HR teams choose a decision support tool.
When comparing benefits decision support tools, HR teams should weigh the following factors:
- Educational vs. decision-making support. Most benefits decision support tools teach users about their benefits and help them choose. But some focus more on education, while others focus on answering the question, “Which specific plan is right for you?” Keep in mind that tools designed to guide employees directly to the decision point are typically faster and less demanding.
- The user experience. People today are accustomed to slick, intuitive mobile apps that “just work.” It’s worth remembering that benefits decision support tools are meant to encourage engagement. There shouldn’t be a learning curve that pushes employees away from the tool.
- Accessibility. Decision support’s simplicity and flexibility only becomes apparent when employees are able to access their tools when they want, from wherever they want. When choosing a tool, look for multi-language support, multi-device support, and on-demand access for non-employees, like other family members who wish to participate in the decision process..
- The data model and data sources. A benefits decision support tool is only as effective as the data it uses to model employee expenses such as premiums, deductibles, and copays. The most advanced decision support tools apply cutting-edge analytical techniques to hundreds of millions of data points to make accurate estimates and plan recommendations.
(Find more tips on choosing a benefits decision support tool here.)
Flimp’s Benefits Decision Support Tool: PLANselect
We encourage you to research all your options before choosing a benefits decision support tool. But we would like to introduce you to the decision support tool with the highest ROI in the industry: PLANselect.
With a focus on usability and precision (rather than bloated features and time-wasting animations), PLANselect is an accurate decision support tool built for HR budgets. Companies using PLANselect see a 20%+ increase in HDHP and HSA migration.
PLANselect provides the personalized guidance employees need when choosing benefits while respecting their time. By tapping into the power of over 200 million data points, PLANselect makes reliable cost projections and plan recommendations in less than five minutes. Results are provided with easy-to-grasp value scores, making the choice of benefits as simple as comparing the difference between two numbers.
For HR teams, PLANselect offers powerful predictive analytics capabilities. Employers can use it to forecast the impact of proposed benefits plans on employee and company premiums, company HSA/FSA contributions, and the company’s total expenses.
Click here to learn more about PLANselect, the industry’s leading benefits decision support tool.