It appears that inflation is causing many employers to pump up their benefits budgets as open enrollment season for 2023 approaches, but inflation also means many workers will be more selective about their benefits choices and spending.
A new survey from Voya Financial found inflationary pressures have American employees increasingly focused on their employer-provided benefits to help optimize their workplace benefits and savings needs.
Specifically, due to inflation, Voya’s survey found that the majority of employed individuals (70%) plan to spend more time reviewing their benefit selections during open enrollment to help make the most of their benefit dollars. However, to help employees make more informed benefit decisions for their unique personal circumstances, most will likely need some help. Interestingly, the new survey also revealed that 7 in 10 are interested in receiving support to help optimize their benefits dollars across retirement savings, health insurance, health savings accounts, and voluntary benefits like critical illness, hospital indemnity, disability income or accident insurance.
“It’s encouraging to see that workers intend to carve out more time to focus on reviewing all the workplace benefits offered by their employers to help optimize every hard-earned dollar.”
Voya Financial’s Rob Grubka
“With inflation at record levels not experienced in decades, the financial stress caused by increasing prices is taking a toll on American workers,” said Rob Grubka, CEO of Health Solutions, Voya Financial. He added that the new survey found nearly three-quarters of Americans (74%) agree that inflation has made them more stressed about their personal financial situation, which is up from 66% in March of this year.
“If we look at lessons learned from the onset of the COVID-19 pandemic, it’s not surprising that American workers are once again turning to a trusted source for guidance and support—their employers. And, with the fall open enrollment season approaching for millions of Americans, it’s encouraging to see that workers intend to carve out more time to focus on reviewing all the workplace benefits offered by their employers to help optimize every hard-earned dollar.”
The challenge for many individuals in the current landscape is understanding how to balance their short-term needs with their long-term financial goals. For example, when asked what concerned them the most, almost 9 in 10 (88%) said it was the various impacts of inflation—such as the rising cost of food and groceries (38%), rising gas prices (35%) and the rising cost of housing (15%). Interestingly, the rising cost of healthcare ranked fourth on this list of top concerns (9%), followed by the rising cost of streaming and TV services (3%).
“In our experience, typically when you ask workers what concerns them most when it comes to their health and wealth needs, the rising cost of healthcare would top the list. While still important, Voya’s latest survey highlights the impact of daily pressures and competing financial priorities that many are trying to navigate in today’s high-inflation environment,” said Andrew Frend, SVP of Strategy and Product, Voya Health Solutions.
“For employers and benefits providers, this presents a tremendous opportunity to work together to help simplify and personalize the annual enrollment experience so employees can act with confidence in how they allocate their next dollar,” Frend continued. “In addition to year-round education and communications efforts, innovative solutions and technology can be a game-changer.
The Hartford: 40% will ‘scale back’
Another recent survey—this one from The Hartford—found 40% of employees surveyed said inflation will cause them to “scale back” on the employee benefits they elect in the upcoming open enrollment season. In addition, 48% said inflation is making it difficult for them to pay for their benefits.
“I encourage workers to take extra time this year to reflect on what changes have occurred in their life and select the benefits that best fit their individual needs and budget to help protect their finances in the long-run.”
The Hartford’s Dana MacKinnon
“With our current economic environment, it is an ideal time for workers to take stock of what benefits they currently have rather than automatically rolling over the same benefits they chose in previous years,” said Dana MacKinnon, head of relationship management strategy and enrollment for Group Benefits at The Hartford. “I encourage workers to take extra time this year to reflect on what changes have occurred in their life and select the benefits that best fit their individual needs and budget to help protect their finances in the long-run.”
The Hartford’s August 2022 Future of Benefits Pulse Survey found younger workers were more likely to report they would cut back on benefits compared to older peers. More than half of the workers ages 18-34 (51%) said they are likely to scale back on their benefits compared to those ages 35-54 (41%) and those ages 55+ (25%).
The survey found 30% of workers are “rollers,” typically rolling over the same benefits choices they made the previous year; 28% are “planners,” keeping up to date on benefits throughout the year so they are prepared at enrollment time; 22% are “analyzers,” analyzing the coverage and crunching the numbers for all of their benefits choices; 12% are “consulters,” needing to consult with someone else before making their benefits selections; and 8% are “avoiders,” tending to ignore all the open enrollment emails and would prefer not to think about their benefits.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
