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Do your employees understand their company-provided benefits?

Employers and employees are on opposite sides of the Grand Canyon when it comes to health care benefits, according to a 2005 MetLife study of employee benefit trends. The survey reports more than two-thirds of employers believe that employees do not understand the full value/cost of their insurance benefits, while two-fifths of employees say they don't know which options best meet their needs and express a desire for more education and help with planning.

If this is the age of the "new ownership society" where patients control their health care, parents control their children's education and workers control their retirement savings, why do so many feel out of control with regards to benefits? Language such as cost sharing and the new consumer-driven health plans add to the confusion. While benefits professionals should feel good about the slowed rate of increase in health care costs from 10 percent last year to an expected eight percent in 2006, employees feel the pinch of higher deductibles, premiums and copays.

Importance of benefits
One area of agreement between employees and employers is the importance of benefits in recruiting and retaining quality, trained workers -- a fact that is well-known by human resource professionals. The study substantiates that value with nearly one-third of respondents rating benefits as important, up from one-fourth from the previous two years with benefits ranking higher among pre-retirees and young families. In addition, nearly two-thirds of respondents who are highly satisfied with their benefits package felt a strong sense of loyalty to their employers.

The key to bridge the great "canyon" divide and avoid falling into the turbulent Colorado River is in education. Ceridian's Product Manager, Geri Lodato, says it is important to provide employees with the tools to understand the cost shifting. In comparison to the increases in other living expenses such as cell phones, cable television and gasoline, Lodato believes the investment in health care and other benefits is a good value.

Online tools to educate employees
The increased interest in Ceridian's comprehensive Health & Welfare solution shows that employers are tapping into tools such as self-service and online enrollment to control some of the costs. A recent study by Watson Wyatt and the National Business Group on Health reported that the use of online health tools are not only helpful to deliver the information to employees, but also enable employees to see a level of detail regarding their health care that helps determine the cost, quality, etc. of the options they select. Of the 585 companies surveyed, 58 percent provide Internet resources that allow employees to compare health care insurance options side by side. The study reported that the leading companies in controlling costs also offer additional Web tools.

A current offering, Ceridian HR/Benefits Knowledgebase and Decision Support Tools, does just that. The online support tools help employees make informed decisions about their benefits plans, including quality and cost comparisons through modeling. Written in straightforward language with personalized company eligibility rules, the tools include:

• Dynamic plan comparison: side-by-side comparisons of the users' eligible plans.
• Medical cost calculator: provides information about the real costs beyond the premium, i.e., usage and prescription drugs.
• Medical selection tour: reviews the entire plan evaluation and selection process.
• Needs comparison: reviews correlation between life situation and basic needs as it relates to benefits choices.
• Insurance and retirement calculators: provide modeling tools for determining best insurance and retirement plans to meet individual needs.

Health care choices are not the only benefits decision for employees. In between driving children to activities, watching over aging parents and maintaining a household, employees are being asked to make selections that impact retirement. Lodato speaks from personal experience about how she ignored the available retirement options when she first joined the workforce. Today, tools such as a total compensation statement can raise awareness and provide a snapshot for employees that, in addition to salary, includes shared costs and non-cash compensation.

Understanding the employee's true value
The Ceridian Total Compensation module delivers customized electronic compensation statements for employees. The online module offers flexibility and customization, reduces costs, educates employees on the true value of their compensation and builds trust and loyalty with employees through communication. The statement summarizes an employee's wages, both the employee's/employer's contributions for various health benefits, FICA, vacation pay, 401(k) matching, tuition reimbursement and voluntary insurance.

Ultimately, those employers who support their benefits packages with targeted communications and comprehensive tools will raise the level of employee understanding -- making the "Grand Canyon" of employee benefits less intimidating. The time to raise awareness is now as more employers seek to tailor their benefits programs to meet the life-stage needs of a diverse workforce.

Contact your Ceridian representative to learn more about Ceridian's Health & Welfare solutions and Total Compensation Statements.