Introducing new plan elements—let alone a brand-new flexible benefits plan—can be a huge undertaking for plan sponsors.
In most situations, disruption and change management can be steered and managed well. However, given the magnitude of some undertakings, there is the potential for negatively impacting day-to-day operations and temporarily disrupting plan members. It becomes essential to invest the time upfront to evaluate the different types of flexible plans, consider the feasibility of introducing options and set a critical path to ensure a positive outcome.
In order to effectively introduce a brand new flexible benefits plan, it’s critical to properly evaluate all of the options available. It’s also important to note that there can be such a thing as too much flexibility. Too often, stakeholders invest a great deal of time and effort only to end up in this scenario: A new plan offers up to nine different variations, and then members end up staying in the default option. This can happen if too much flexibility is introduced and members do not understand all the options.
Communicate the plan before and after
Designing and implementing a flexible benefits plan is only the beginning of the project. In order to ensure that a flexible benefits plan is truly successful, a comprehensive communication strategy needs to begin well before the effective date and be consistent long after.
Here are some of the questions that should be addressed as part of the benefits plan communication strategy:
- Do members fully understand all of the options available to them?
- Is the objective of engaging members of varying demographics also guiding the methods chosen to communicate with the workforce?
- What is the desired level of participation, and how will the gap be closed during annual enrollment?
- How are increases to price tags being communicated with members when their contributions experience a significant adjustment?
- Is the enrollment tool facilitating or hindering the process?
Review how the plan is operating
The technical expertise required to review how a flexible benefits plan is operating is also important to ensure the ongoing success of the project, including cost sustainability.
Here is a checklist of questions to consider:
- Has a strategy been put into place to review and measure the ongoing success of the plan?
- Are the proper rules in place to reduce antiselection risk?
- Is the right amount of antiselection margin being loaded into the price tags?
- How does the actual experience compare with pricing?
- Should price tags all be repriced with an aggregate adjustment?
- Are actual budgets being accurately represented, especially in self-insured plans where the employer is responsible for all deficits, or are employer costs being represented as non-trending credits year over year?
A benefits plan redesign is one of the most impactful projects for members. In order for these projects to be successful, the proper experience and resources need to be invested. Traditional plans fail to engage all members in the workforce when they do not address the individual needs of each member. Similarly, a prepackaged flexible benefits plan that has not been informed by a clear strategy and data-driven recommendations likely will not address the needs of every company. It is worth doing the required work up front to ensure a smooth and successful implementation.
It can be easy to get caught up in explaining the what of a group benefits plan, but don’t forget to mention the why. With a focus on company culture and objectives, the utilization of the tools and market insights now available, and an emphasis on employee communication, a sustainable, flexible benefits plan is both plausible and achievable.