Benefits plans matter to employees. Research from the 2011 sanofi-aventis Healthcare Survey shows that 59% of employees would choose to keep their benefits plan if given the option to trade it for $10,000 in cash.
But as much as employers want to provide these benefits to their workforce, they are struggling to manage plan costs. This is by no means a new challenge for plan sponsors, but it’s one that has progressively taken centre stage for employers everywhere.
Controlling Costs
When provincial governments first started talking about lowering the prices for generic drugs, plan sponsors and industry professionals were optimistic about the effects of these changes. However, when talk changed to action and British Columbia, Alberta, Ontario, Quebec and, most recently, Nova Scotia announced their respective drug reform legislation, reality hit. The new generic drug pricing has had minimal impact for most plan sponsors.
Shawn O’Brien, senior consultant, health and benefits, with Aon Hewitt and a member of a panel examining the impact of drug pricing reform, said that Ontario plan sponsors are starting to see savings. However, these savings aren’t extraordinary, since the generic pricing caps currently apply only to drugs listed on the Ontario Drug Benefit formulary. He also noted that any savings employers might be seeing could be negated as more biologics come down the pipeline. “There will be another [cost] spike,” he said, adding, “[Drug reform] isn’t what we originally thought it would be.”
Vic Medland, president, group insurance services, with the Ontario Teachers Insurance Plan (also a panelist at the summit), backed what O’Brien said. “There is no question that the easing for generics is helping [us], but we are at a 52% fill rate for our generic drugs, which is a bit higher than most plan sponsors,” Medland explained. And he knows there is only so much that can be saved from using generic drugs. “We are looking at plan design, and it’s forcing us to be a bit more creative. How do we work together to take maximum advantage of what is available to us?”
Better understanding cost drivers—and how employers are going to control current and future health benefits costs—was a running theme throughout the group benefits stream of the conference. According to the 2011 sanofi-aventis Healthcare Survey, 41% of plan members would prefer to pay higher premiums to maintain their current benefits in the event that their employer was unable or unwilling to pay for increased costs. And more plan members (28%, versus 23% two years ago) would be open to increased co-pays based on an individual’s actual use of medical services.
Crafty Communication
Creating effective benefits communications will help plan sponsors get the most value from their benefits plans. But fully implementing a strategy that meets the needs of an organization is a challenge—and, for some, even a guessing game.
Do plan members understand the programs? Are employers offering what members need? How can employers change their programs to better meet employees’ needs and wants without incurring more costs? Employees should be involved in answering these questions, but getting them to pay attention and give feedback isn’t as easy as it should be.
One reason could be that employees don’t truly understand the messages they receive. The makeup of an organization’s workforce may have changed drastically since the employer first implemented the benefits and retirement savings plans. Does the current messaging take factors such as age, language and culture into account?
In particular, plan sponsors need to keep culture in mind—not only when developing their plans, but also in plan communications, explained Chad Lewis, founder of Intercultural Focus in Boston and keynote speaker at the summit. According to Statistics Canada data, Canada has one of the highest foreign-born populations, with 19.6% born elsewhere. And, if trends continue as expected, about 22% of the Canadian population will have been born outside of Canada by 2017. “Why is this important?” Lewis asked. “Because they are your customers—but also your employees.”
Communication is more than just verbal; it’s non-verbal as well. Body language, presentation and even silence are all forms of communication. How people present themselves—for example, their hand gestures and the way they stand—can reveal a lot before they even say a word. The same applies to the way employers package their benefits communications. Lewis used wedding invitations as an example to show that the presentation of materials is as important as what they say. “How many people here sent their wedding invitations out on a napkin?” Obviously, there is no one style that suits all plans, but presentation matters when planning these vital tools.
How can silence be a form of communication? “Silence is not the absence of communication. When my wife gets mad at me, she gives me the silent treatment, and I know exactly what that means,” Lewis joked. When plan members are silent—despite your communication efforts and opportunities for them to ask questions—does it mean they don’t understand? Or do they fully understand and just have no questions? When it comes to the intricacies of pension and benefits plans, it’s likely the former.
So what can plan sponsors do to better communicate with a diverse workforce? “Be aware that your employees may have different priorities,” Lewis advised. “Be prepared to be able to adjust your offerings…[and have] better awareness of your own communication style and language.”
One small step that plan sponsors could take to significantly improve overall communication is to examine the messages they’re sending.
- Could you be offering benefits that make sense to you but not your employees?
- Could your materials be ambiguous?
- Which specific words might have multiple meanings?
- How can your literature be open to interpretation?
“A picture is worth a thousand words, but a word can be worth 1,000 pictures,” Lewis summarized.
As workforce dynamics change, maintaining creative benefits programs and plan designs—as well as the communication and administration that surround them—will be a challenge for plan sponsors. But it’s a challenge they’ll need to address in order to remain competitive and sustain their benefits offerings.
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