Raising the grade on your benefits - Fidelity Investments · Vacation/paid time off A ... inexpensive to offer or are primarily geared toward a smaller subset of employees should

PAGE 1FIDELITY HEALTH SOLUTIONS THOUGHT LEADERSHIP

Raising the gradeon your benefits

See how 35 health and wellness benefits rate across four key measures of value, and how you can boost their worth for your employees

HEALTH SOLUTIONS THOUGHT LEADERSHIP


There are only so many tools an employer can use to attract and retain key talent. One of the most influential is your benefits package,

particularly if your benefits are highly valued by employees.

But the funny thing about value is that it is not universal. Different people value different benefits for different reasons at different times in their lives. So how can you look across all those dimensions to see the value of an individual benefit?

To answer this question, we surveyed more than 9,400 working people across the United States about their experience with 35 common health and wellness benefits offered by their employers. We identified four important measures of value and graded each benefit on each criterion. Higher grades reflect higher awareness, use, and impact on health or work-life outcomes. We also averaged the four component scores to create an overall grade for each benefit.

Some benefits are clear winners across all categories; others tell a more complicated story.

AWARENESS

The percentage of employees who know their employer offers the benefit

UTILIZATION

The percentage of employees who use the benefit

PERCEIVED VALUE TO HEALTH

The percentage of employees who see the benefit as valuable for their health (access to good health care, ability to pay for health care, ensuring good health for me and my family, feeling confident in managing my health), whether or not their employer offers it.

PERCEIVED VALUE TO WORK-LIFE

The percentage of employees who see the benefit as valuable for work or life outcomes (feeling satisfied with my job, being productive at work, accepting a job, staying at a job), whether or not their employer offers it.

Four measures of value

Answering a key question for employers


Perceived value to OverallAwareness Utilization Health Work-life Grade

Health (medical) plan A+

Dental A

Vacation/paid time off A

Vision A

Health savings account A–

Life insurance A–

Long-term disability A–

Short-term disability A–

KEY Awareness Utilization Health impact Work-life impact

40–69% <30% <20% <15%

70–79% 30–50% 20–30% 15–25%

80–89% 50–69% 30–49% 25–34%

≥90% ≥70% ≥50% ≥35%

Grade ‘A’ benefits

On the following pages, we have clustered benefits by grade, from A through C. The grades are based on adding the scores from each of the four categories. Our research was completed before the coronavirus pandemic, so scores for benefits like remote work (which received an overall grade of B), flextime (B–), and telemedicine (C) may have changed as utilization has improved.

Applying grades allows us to easily evaluate one benefit against another. Not surprisingly, the highest-rated benefits are considered table stakes by many employers and employees.



Accident insurance B+

Health savings account (employer contribution)

B+

Limited-purpose (health care) flexible spending account

B

Leave of absence B

Mental health services B

On-site cafeteria B

Remote work B

Wellness incentives B

Fitness (on-site or reimbursement) B–

Flextime B–

Paid on-site cafeteria B–

Supplemental life insurance B–

Supplemental long-term disability B–

Grade ‘B’ benefitsWe recognize that not all benefits should be getting an “A.” Your organization’s objectives should drive how your benefits perform. Those benefits that you feel strategically differentiate you (or where you allocate significant financial resources) should be getting your highest grades.



Employee assistance program C+

On-site health/wellness center C+

Chronic illness management C

Daycare (on-site or reimbursement ) C

Flexible spending account C

Health navigator C

Injury/illness insurance C

Long-term care insurance C

Online health decision-making tool C

Online health coach C

Parental leave C

Telemedicine C

Dependent care C–

Meditation C–

Grade ‘C’ benefitsThese benefits aren’t by any means “failing”—just like in school, a “C” is simply average. Benefits that may be inexpensive to offer or are primarily geared toward a smaller subset of employees should be getting a lower grade. Getting a “C” for these benefits may be perfectly acceptable.


Raising the grade: One benefit at a timeIf you want to increase the value of the benefits you offer, there are two ways to approach it: Look at one benefit at a time, or consider a measurement category like awareness or utilization. Let’s start with looking at one benefit at a time, in which case you should focus on those benefits that you think should be performing better. Take, for example, parental leave.


Parental leave C

With parental leave, our research showed a high level of awareness

but low scores across utilization and perceived value on health and work-life.

In this case, low utilization may not be a problem; at any given time, there may simply be a low percentage of employees eligible to use parental leave. To increase utilization, you might consider whether the benefit is available for adoption, along with live births? Does your plan cover some time off for the spouse? Does it give employees time off for other caregiving needs, including caring for aging parents? If your program has a narrow eligibility criterion, then you may be able to increase utilization by broadening it.

If the benefit already has broader eligibility, and you have a population that should be using it, you may have a communication problem. Perhaps employees are interpreting that benefit in the most narrow sense.

Letting people know about the full breadth could increase this benefit’s grade, while likely bumping the scores in helping to improve people’s health and work-life outcomes.

KEY QUESTIONS

• How many of your employees are eligible to take advantage of the benefit?

• Does it make sense to broaden eligibility?

• Are you communicating the right benefits to the right employees at the right time?


KEY QUESTIONS

• Do employees understand the wide-ranging value of benefits, beyond the immediately apparent?

• In sensitive areas like chronic disease management, do you tee it up often to a broad audience without singling people out?

• Can you solicit and promote “employee success stories” to drive greater awareness and adoption?

Raising the grade: One category at a timeAnother tactic is to focus on one measurement criteria and try to boost performance of some of the less valued benefits. Let’s look more closely at the perceived value of benefits categories.

We look at the perceived value of benefits in two areas: health and

work-life. These categories may be even more important than awareness and utilization because people who see value in a benefit are not only more likely to use it, but they also will spread the word among their coworkers.

Through our total well-being research, we know how interconnected the domains of life are—how financial security can translate to improved health and how good health can lead to being a more productive, engaged worker. These are just two examples; the connections run deep throughout all domains of life.

To increase perceived value of benefits in health and work-life, consider telling a broader story about how a benefit can make life easier. You may need to spell out how telemedicine, for instance, can free up time at home or work, or how improved mental health can translate into better performance at work.

AWARENESS

• Chronic disease management

• Dependent care flexible spending account

• Health navigator

UTILIZATION

• Daycare (on-site/reimbursement)

• Dependent care flexible spending account

• Flexible spending account

Lowest-scoring benefits

PERCEIVED VALUE TO HEALTH

• On-site cafeteria

• Daycare (on-site/reimbursement)

• Meditation services

PERCEIVED VALUE TO WORK-LIFE

• Telemedicine

• Online health coach

• Meditation services


Putting this into practiceAs your business and talent objectives evolve, so should your benefits and their respective importance. It’s unlikely any organization would only offer A-rated benefits; it’s a matter of deciding where you want to focus your spending and energy. To find out how benefits rate in your workplace, consider expanding your next employee satisfaction survey to include some measures of awareness and value for the benefits that are most important for your strategic objectives. Let’s take two examples:

Company ATHE FOCUS: Attract and retain younger employees.

IMPORTANT BENEFITS: Parental leave (C), remote work (B), and daycare (C).

Looking at the chart, Company A would find that some people aren’t aware of the parental leave policy; many don’t see the benefit of remote work for their health or their work-life; and daycare is neither widely utilized nor valued. Company A might start by communicating more about the parental leave policy, including uses that go beyond the birth or adoption of a child. It might also focus on the broader value of remote work and daycare to health, work, and life. And it would want to explore whether everyone who should be taking advantage of these benefits is taking advantage.

Company B THE FOCUS: Maintain the mental well-being of employees in a high-stress environment.

IMPORTANT BENEFITS: Meditation services (C–), mental health services (B), and a revamped employee assistance program (C+).

Company B would find that mental health services has a perfectly fine score, only lagging in the perceived value for work-life. Instead, it may choose to focus on its employee assistance program (EAP) and meditation services. The EAP and meditation services both lag in awareness, which gives Company B a good place to start—communicating what the benefits are and how they can improve health, work, and life.


ConclusionEmployers spend a substantial amount of money and time each year on employee benefits. To make sure your organization is optimizing their value, it’s important to continually assess how your benefits are performing and take any necessary steps. Different tactics may be necessary depending on your goals. Ultimately, you’ll want to make sure that your most important, and most expensive benefits, are getting top grades.

Fidelity Investments® Employee Value of Benefits Research online survey of 9,465 active Fidelity 401(k) and 403(b) participants from across the United States. The survey was conducted by Health Solutions Thought Leadership in October 2019.

For plan sponsor use only.

Fidelity Investments Institutional Operations Company, Inc., 245 Summer St., Boston, MA 02210

© 2020 FMR LLC. All rights reserved.

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Raising the grade on your benefits - Fidelity Investments · Vacation/paid time off A ... inexpensive to offer or are primarily geared toward a smaller subset of employees should