Executives aren’t the only ones looking at options to mitigate the impact of health care reform. Employees fear repercussions from this legislation and are creating lists of “what- if” scenarios to deal with the fallout. According to surveys by Towers Watson, 67 percent of employees believe health care reform will increase their benefit costs and 44 percent would be open to new offers if current benefits were reduced or eliminated.
Allowing workplace uncertainty to linger can undermine engagement and productivity, yet thus far only a handful of employers have anticipated employees’ concerns or solicited their solutions or benefit preferences.
“The reality is some companies may decide to reduce health care benefits, and it’s better to begin a conversation with employees about the implications of health care reform rather than keeping them in the dark,” says Christine Infante, senior consultant with the Rewards, Talent & Communications Practice at Towers Watson.
Smart Business spoke with Infante about the best ways to invite employees into the decision-making process.
What’s worrying employees about health care reform?
Our surveys show that employees are increasingly concerned about the rising cost of health care; one in four says it’s a source of significant stress. Increased cost shifting by employers has impacted their ability to make ends meet today and save for the future, and many perceive that reform will only exacerbate their plight. In fact, more than half say the bill will reduce their available benefits and lower their quality of care and 40 percent say they would be uncomfortable purchasing their own insurance in reformed markets as an alternative to getting coverage through their employer. Since health care benefits rank third on the list of employee attractors, behind base pay and paid time off, employers should pay attention to their concerns and reduce workplace angst by giving them honest answers.
What’s the best way to initiate a dialogue with employees?
Employees and retirees are grappling with the complexities of the new health care law and it’s especially challenging to calculate the financial ramifications from key provisions like the excise tax on cadillac plans or the tax on Medicare benefits. So focus first on education by sending a letter that describes the various elements of health care reform, when they take effect and their impact on costs, since the implementation schedule runs all the way through 2014. Providing employees with information sets the stage for future benefit changes as they gain an understanding of the bill’s provisions and how each one impacts their existing coverage.
Next, invite an interactive dialogue by asking benefit managers to moderate an online discussion or chat session and invite employees, spouses and significant others to participate. An online forum allows the employer to create different topics or threads so you can learn what employees want, better understand their concerns, even test ideas and it supports group learning 24/7. Finally, executives should enter the discussion by addressing employees during quarterly meetings or town hall sessions.
What’s the right message for executives?
Business leaders don’t need to be benefits experts to speak to employees; they just need a few sound bites to explain the company’s evaluation strategy and estimated time line. Just letting employees know that a plan is in place to assess the impact of health care reform on their benefits will restore a degree of confidence. Next, remind employees about the company’s strategy for controlling health care costs and that they can help by participating in wellness programs and being smarter consumers of health care services. Towers Watson research reveals that companies with the most effective health and productivity programs have senior managers who advocate wellness and take an active role in communicating with employees. In fact, when big decisions need to be made, 48 percent of managers at these organizations involve employees and 92 percent take the lead in explaining the reasons for the decisions.
What’s the best way to engage employees in the decision-making process?
Ask employees what’s important to them and what they value most about their benefits to make sure expenditures are aligned with the most impactful programs. This is the perfect time to revisit your company’s employment value proposition and remind employees about the total rewards they receive in exchange for their hard work. Many companies create cross-functional teams or task forces to evaluate the current budget and benefit programs and recommend possible changes. Be sure the teams encompass a cross-section of employees and stakeholders, since a 25-year-old employee with no dependents has a different set of priorities than a 45-year-old with college-age children. Members also serve as conduits by soliciting input from co-workers, which allows more employees to have a voice in the decision-making process. When presented with the facts and a slate of alternatives, employees have shown that they are capable of making sound decisions about health care benefits.
How should executives communicate benefit plan changes?
When addressing employees about changes to the company’s health care plan, executives should articulate the employment value proposition (the deal), reinforce the organization’s benefits philosophy and commitment to well being and explain the business challenges imposed by reform. Let employees know that the company is committed to managing costs and re-evaluating the plan should circumstances change. Finally, thank employees for their partnership and guidance in resolving this critical issue.
Christine Infante is a senior consultant with the Rewards, Talent & Communications Practice at Towers Watson. Reach her at email@example.com or (858) 523-5514.