Businessolver MyChoice™ Recommendation Engine Reports Reveal Impact of COVID-19 on Employees’ Benefits Knowledge and Financial Well-being
WEST DES MOINES, Iowa, Sept. 23, 2020 /PRNewswire/ — A series of special reports released this month by Businessolver®, a leader in SaaS-based benefits technology and services, expose how COVID-19 has undermined employees’ confidence in their benefits knowledge and shifted their focus and ability to save.
Baseline data comes from employee responses during last fall’s annual enrollment using the MyChoice Recommendation Engine, Businessolver’s decision guidance tool integrated into the Benefitsolver® platform. By comparing employee responses received before the pandemic and published in the initial annual MyChoice Recommendation Engine Benefits Insights Report to those captured during mid-year annual enrollments this spring and summer, the special reports uncover important changes in how employees perceive their benefits understanding along with their changing financial challenges and priorities.
COVID-19 undermines benefits literacy
Businessolver’s findings indicate that since the onset of COVID-19, employees feel less confident about their benefits knowledge, and for some groups, the change is significant. The 2020 MyChoice Recommendation Engine Benefits Insights Report revealed that 31% of employees enrolling in benefits before the pandemic were confused about their benefits.
However, the confusion wasn’t the same across age groups: Gen Z was more than twice as likely to be confused about benefits (54%) compared to their Baby Boomer co-workers (25%).
By contrast, employees of all ages enrolling during COVID-19 indicated more confusion around their benefits.
- Gen Z was the most confused at 61%, an increase of 7%.
- However, Gen X employees were just under 20% more likely to be confused about benefits than they were before the pandemic.
Differences in benefits comprehension were more pronounced among income levels.
- Before the pandemic, 46% of employees making less than $30,000 were confused about benefits.
- Among those earning over $100,000, 23% indicated they didn’t understand their benefits.
Both groups experienced increases in their level of confusion. However, those making less than $30,000 were 13% more confused, while those earning more than $100,000 saw an increase of 56%.
Pandemic is unevenly impacting financial well-being, health care saving among generations and earners
The MyChoice Recommendation Engine Special Reports also show how COVID-19 is impacting the financial well-being and preparedness of employees.
At all income levels, saving increased, with those earning the most having the highest gains.
- Employees earning less than $30,000 were saving 14% of the time pre-COVID and 17% of the time mid-COVID.
- By contrast, employees earning more than $100,000 saved 31% of the time pre-COVID but that number had increased more than 50% mid-COVID to 48%.
Even with more reported saving overall, fewer employees had resources on hand to fund an emergency.
- Prior to the pandemic, if faced with a large unexpected expense 35% indicated they would either go into debt (19%) or just didn’t know what they would do (16%).
- Mid-COVID, that number rose to 43%, with 25% indicating they didn’t know what they would do and 18% relying on debt to address the shortfall.
Gen X is losing financial ground, while Gen Z is focused on saving
In the multigenerational workforce, Gen X is taking the greatest hit to liquidity.
- Before the pandemic, 63% of Gen X employees reported they had cash for an unexpected expense.
- Mid-COVID, that number had decreased to 53%.
- During the same period, the number of Gen X employees who indicated they don’t know what they would do if faced with a large expense increased from 17% to 28%.
Lack of preparedness extends to employees’ reserves for out-of-pocket health care expenses. Both Gen X and Baby Boomers saw a decrease in their rainy day health care fund, and Boomers were more than 30% more likely to get soaked by a large ER bill mid-COVID.
By contrast, Gen Z employees stepped up their health care saving.
- Before the pandemic, 4% of Gen Z employees indicated they had the resources to cover a large ER bill.
- By mid-COVID, that number had increased to 14% — a 250% improvement.
Technology can support employees in understanding and using their benefits
As a global health crisis undermines employees’ confidence in their benefits knowledge and changes their ability to save, employers can support their workforce with HR technology that provides employees with a holistic view of their benefits.
«With COVID-19 benefits have taken on greater importance in addressing employees’ concerns about their health and their finances,» says Sherri Bockhorst, Businessolver’s SVP of Innovation and Strategy . «Employees go into this year’s annual enrollment with less confidence about their benefits knowledge and more challenges around their finances. Meaningful, easy-to-use decision support and guidance, as well as more real-time, interactive benefits education should be focus areas of employers preparing for annual enrollment this fall.»
Organizations that seek to address the needs of employees in these challenging times can leverage the findings from Businessolver’s Benefits Insights Reports to better understand how COVID-19 is impacting the workforce. From benefits literacy to financial well-being across the generations, the data offers unique insights that can help employers support benefits decision-making and financial well-being to create more engaged, empowered employees.
Businessolver has published the following 2020 Reports in the Benefits Insights series:
- MyChoice™ Recommendation Engine Benefits Insights Report
- MyChoice™ Recommendation Engine Special Report: How COVID-19 Has Impacted Employees’ Benefits Understanding
- MyChoice™ Recommendation Engine Special Report: Funding the Unexpected
Since 1998, Businessolver has delivered market-changing benefits technology and services supported by an intrinsic responsiveness to client needs. The company creates client programs that maximize benefits program investment, minimize risk exposure, and engage employees with easy-to-use solutions and communication tools to assist them in making wise and cost-efficient benefits selections. Founded by HR professionals, Businessolver’s unwavering service-oriented culture and secure SaaS platform provide measurable success in its mission to provide complete client delight.
Matthew Smedley, Edelman (on behalf of Businessolver)
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