From the October 2008 issue of Ceridian Connection

The Towers Perrin 2008 Health Care Cost Survey confirms one of the main external factors that will affect this year's open enrollment decisions -- a continuing increase in health care costs. The study reveals that the average corporate health benefit expenditure in 2008 is around $9,144 per employee -- an increase of 6 percent over 2007 -- with annual per-employee contributions exceeding $2,000. Employers are expecting to subsidize 78 percent of next year's medical insurance premium costs, and employees will have to cover the remaining 22 percent, plus usage-based co-pays, deductibles and coinsurance.

Conveying higher health care cost messages to employees during open enrollment continues to be a challenge for companies as they look for effective ways to recruit and retain top talent.

"Benefits open enrollment for some companies has become 'this thing I have to deal with' rather than a positive experience," said Kim Yueill, director of Ceridian Benefit Services. "When discussing higher health benefit costs with employees, more education is needed to help them understand how to select their benefits and maximize their benefits at the end of the day."

Yueill also asserts that more emphasis must be placed on reinforcing health and wellness messages. If you take care of yourself sooner, before you become sicker and require more care, you can positively impact health care costs.

"Employees are focusing on benefits during open enrollment, so they are a captive audience for messages about the preventive benefits of health and wellness programs," according to Jennifer Bichsel, director of employee benefits for Ceridian. "Higher employee usage of health and wellness programs can help your company slow rising health care costs."

FSA fear factor
With gas prices through the roof and a continuing precarious U.S. economy, some employees are apprehensive as they make commitments to a Flexible Savings Account (FSA). And of course that "use-it-or- lose-it" rule does not help quell their fears. Once again, education can do wonders in helping employees understand that FSAs can save them a lot of money on their covered expenses, such as co-pays for doctor visits and over-the-counter medicines.

"Some employees just don't understand how FSAs work and even think they are paying twice," Yueill said. "Some people struggle with what they perceive as giving money on a regular basis to get it back later. And many people do not know the range of claims that are allowed with an FSA. For example, you can claim sun block and even the mileage cost of traveling to a health care provider for an office visit. You also receive a 30 percent savings on all of your health expenses that are covered under the FSA."

"There are a lot of medical cost calculators out there, and we encourage employees to start using them," Bichsel added. "The calculators can help employees to understand costs that occur to determine their FSA contributions."

Similarly, Health Savings Accounts (HSAs) may see less investment this year as people weigh their decisions on where their money will best serve them during an economic downturn. Employees need coaching about how to put money aside now and continue to accumulate it year after year so they will have HSA funds to cover needed services in the future.

Know your audience
Another important internal factor to consider when planning your open enrollment is connecting with the "family health manager." Open enrollment messages are often communicated to the employee rather than the family health manager who makes decisions related to the family's health as well as the fiscal side of health insurance.

"A lot of companies take on an employment relationship with a person, but benefits become a relationship with the family," Yueill said. "You need to determine the best way to approach the family relationship, such as conducting a health fair or open enrollment session that includes other family members."

In addition, taking steps to strengthen communication during open enrollment can work wonders in empowering employees to make educated benefits choices. Findings from the 2007 MetLife Study of Employee Benefits Trends offer the following techniques to help effectively communicate benefits messages during open enrollment:

• Provide total compensation statements to help employees understand the costs and benefits of the products and services provided
• Work with benefits providers to tailor communications to employees based on demographics and/or life stage
• Where appropriate, personalize messages to make better use of certain benefit choices or voluntary plans
• Reach out to workers with communication tools targeted to their age group, such as Web-based options for younger workers or glossy brochures for older workers
• Conduct an analysis of competitors and peers to determine the benefit mix they provide to their workforce
• Educate top executives inside and outside the HR department to understand that incremental costs associated with communication and education efforts might result in potential gains in hiring, retention and employee productivity.

Ceridian's FSA ParticipationPlus solution is another way to help employers tackle the factors that can make or break their benefits open enrollment. It offers a comprehensive education and awareness campaign to educate the employee population using an informative DVD, posters and table tents. FSA ParticipationPlus addresses the factors affecting your open enrollment from the inside out. Contact your Ceridian representative for more information about Ceridian's FSA Services.

Related links:
Ceridian FSA Calculator
Blue Cross Blue Shield Health Care Cost Calculator
Health Partners Cost of Care Calculator
MyFlorida.com Health Care Cost Estimator