The Impact of Inflation on Employee Benefits Decisions

Inflation is causing people to evaluate spending decisions. Many are cutting back on expenses to cover monthly bills. About 40% of employees surveyed plan to reduce the amount they spend on benefits in the coming year. But research shows that benefits help keep employees healthy and productive. Employers need to understand the impact of inflation on employee benefit decisions. Here are three ways to help workers cope with benefit costs.

Understand needs

Employees are worried about finances. As inflation impacts the costs of basic living needs (fuel, groceries, transportation and housing) employees are looking for ways to cut expenses. When choosing benefits coverage, many plan to choose only the plans they absolutely need.

Are you offering the health, financial and wellness benefits employees value most? If not, it’s time to find out. Conduct surveys or informal chats, and ask workers about the coverage they want and need. Then meet with your benefits broker and insurance carriers to pick the plans and coverage that fit employees’ wants and needs. Include several premium options so employees can find a coverage level that fits their budgets.

Employees want a good medical plan for major health concerns. In addition, most want stand-alone dental and vision plans to keep their teeth and eyes healthy. Dental and vision plans typically feature a low monthly premium. Employers can cover the expense, share the cost with workers or offer these plans as voluntary options.

Outline the benefits costs your company covers to assist employees with their health and financial needs. Show the savings benefits can provide, as well as out-of-pocket costs employees can incur without insurance coverage. Review this blog to learn more about how to help employees save money with benefits.

Explain coverage

In past years, most employees spent less than 30 minutes reviewing their benefits packages. However, this year over 70% of workers surveyed say they plan to spend more time evaluating their benefits options.

Employees want to understand their benefits coverage. But often find the plan information confusing. They’re embarrassed to admit that they don’t understand the coverage and insurance terms. Explain the impact of coverage options, such as a high-deductible plan or supplemental benefits, on their health care choices and budget. Review these tips on how to enhance employee benefits education.

Improve benefits communications by using:

• Plain, simple words explaining benefits plans
• Bullet points with plan details that employees can scan quickly
• Examples from current employees on how they’ve used their benefits to improve their health. These stories can help employees see how to use benefits for their situations.
• Lists of services included with insurance coverage. For health benefits, these services may include preventive screenings (mammograms, skin cancer, cholesterol checks) available at no cost (or for a small fee) to plan members.
• Personalized messages to attract the attention of each employee demographic. Illustrate how benefits can impact their lifestyle, financial security, health and wellness.

Design a communications plan

Life gets busy, so it’s easy for employees to forget about their benefits coverage. Create a plan of monthly benefits messages to share with employees.

Consider these ideas:

• Refer to national health news to educate workers about medical concerns and coverage options available to assist with these needs.
• Remind workers about financial and wellness programs they can use. Studies show that the average worker can’t afford to pay for a $500 unplanned expense, so budgeting and savings programs are essential.
• Highlight fitness services and mental health activities employees can tap into to maintain healthy minds and bodies.

Use a variety of methods to reach employees:

• Emails
• Webinars
• Videos
• In-person meetings
• Social media. About 48% of American workers use social media to learn about benefits, with Facebook and YouTube as the preferred sources.
• Employee newsletters

Sources and References:
Human Resource Executive