From the September 2009 issue of Ceridian Connection.

Although health care reform may seem a long way off, it's looming large enough to influence this year's open enrollment. The key to a successful enrollment? Communication.

Economic and legislative forces have combined to create a unique open enrollment season
this year -- a perfect storm that causes both employers and employees to seek the greatest maximum value from workplace benefits.

As approximately 100 million of the nation's workers prepare to elect their benefits for the coming year, one of the keys to helping them find that value is good communication.

"The election of benefits is a very personal choice. Decisions can vary greatly based on social and economic factors," said Amanda Johnson, with Ceridian Benefits Services' marketing and product management. "Especially now, employees need to learn which benefits can help them save money and bring them the most value. At the same time, employers need to offer benefits that can help offset rising health costs, such as health and wellness and consumer-directed health care initiatives."

In 2010, U.S. employers can expect to see a 9 percent increase in their health care costs, according to a recent PricewaterhouseCoopers survey of more than 500 employers and health insurers.
To offset these costs, it's critical for organizations to seek greater value from their benefits offerings and to create a greater awareness of that value. According to a recent MetLife study, this is exactly what employees want. The survey found that nearly half of working Americans are taking greater interest in the benefits they receive at work because of the hard economic times.

"What this does is place good communications and accurate information at the center of open enrollment," Johnson said.

Considering that approximately only one-third of employees in small- to mid-size companies say the benefits communications they receive at work are effective, benefits managers have their work cut out for them.

Maximizing savings through employee benefits
One way companies are looking to cut costs in the coming year is by offering Health Savings Accounts (HSA), Health Reimbursement Arrangements (HRA) and Health Care Flexible Spending Accounts (FSA) this enrollment season.

In conjunction with this, companies are beginning to shift to consumer-directed health care plans (CDHP). More than 20 percent of employers surveyed recently say they are likely to add consumer-driven health care plans -- either a CDHP linked to an HSA or an HRA -- in 2010.

HSAs, one of the most popular options, allow employees and their employers to deposit pretax funds into an employee-owned banking or investment account. The money can be used at any time to pay for eligible medical expenses for qualified medical expenses and coverage. Because these plans demand high deductibles, employers typically pay reduced premiums. Employees are required to pay for more out-of-pocket expenses. However, by using their HSA funds, employees will end up keeping more in their accounts as they manage to spend less.

Participating employees can take greater responsibility for their own health care. In addition, employees can take advantage of a great way to invest and save money -- both for today as they cope with rising costs and for the future as they face retirement.

HSA plans seem to be paying off. According to annual surveys from the Kaiser Family Foundation, the cost of HSA-linked high-deductible plans has been growing at a markedly slower rate than that of health plans overall. America's Health Insurance Plans has reported that 8 million Americans are now covered by HSA-eligible plans, approximately 2 million more than at the start of 2008.

Similarly, Health Reimbursement Arrangements can offer significant advantages and measurable cost savings. HRAs are especially appealing to employers because they are flexible employer-owned plans that give companies complete control over the plan design.

Also, generating maximum value this open enrollment season may mean relying on a tried and true way to save: the Health Care FSA.

It is likely that FSAs will be impacted, in some way, by health care reform. But it is even more likely that this benefit's ability to provide tax savings on certain out-of-pocket medical expenses will remain intact. Currently, Congress is considering limiting FSA contributions to a specific amount, perhaps $2,000 per year. But these proposed changes are far from certain, and they would not affect this coming plan year.

The challenge as open enrollment approaches is communicating the unique benefits of these plans to employees, keeping in mind the unique needs of the employees based on demographics. Studies have indicated that employees might need to see information regarding benefits as many as six or seven times before making a decision.

Clear, consistent communication is the only way to promote the healthy enrollment levels that will bring about expected cost savings for organizations.

Ceridian's FSA ParticipationPlus program, for example, is designed to help employers tackle some of the most common obstacles to effective communications, especially during enrollment time. The program provides the tools for a comprehensive FSA education and awareness campaign complete with an informative DVD, an array of eye-catching posters and versatile fliers.

A new era of health and well-being
Regardless of if and when health care reform occurs, businesses are beginning to realize they have entered into a whole new era of workplace health and well-being.

Even within the carefully crafted language of current health care reform proposals, emphasis is now being placed on reinforcing health and wellness messages.

Wellness plans promote healthy behaviors by stressing preventative care and arming employees with empowering health care information. If employees can take care of themselves sooner, before they require more care, they can positively impact health care costs. When workforces are healthier, employers will often receive lower premiums.

Ceridian has noticed an increase in interest in its health and lifestyle behavior change benefits, such as telephonic health coaching, as employers recognize the cost-saving potential

The future of open enrollment
This year's open enrollment season brings unique opportunities for employers. Now more than ever, employers are perfectly positioned to explain their health-benefits plans in a way that puts health care in context for their employees, demonstrates the value of benefits and provides a greater understanding of what can be done to drive down costs as the nation focuses on health care reform.