Unlocking the Benefits Puzzle for Gen Z: A Guide for Employers
Onboarding new employees, especially those who are new to the workforce, requires extra time and effort when it comes to educating them on the employee benefits plans offered. The process of choosing a benefits package is a novel experience for many, and it's important for employers to help new hires understand how to effectively utilize their coverage, including the details of premiums, deductibles, and out-of-pocket expenses. Failure to educate Gen Z employees on their options and how health plans work can result in poor decisions and significant financial consequences, as a recent study found that 29% of Gen Z respondents carry medical debt. To maximize worker satisfaction and retain top talent, employers should focus on the following steps to help new Gen Z recruits get the most out of their benefits:
Health Insurance 101 Many Gen Z employees are unfamiliar with the concept of signing up for and using health insurance. Employers should allocate time to explain the math behind choosing the right plan, including:
- Premiums - Explain the split between employer and employee payments, and how it may vary depending on the health plan selected.
- Deductibles - Explain how deductibles work and the impact of choosing a high-deductible health plan (HDHP).
- Copays - Outline the different copays for each plan, and the relationship between premiums and copays.
- In-network vs. Out-of-network care - Educate employees on the importance of seeking in-network care to avoid paying full price for medical services, and how to find in-network providers.
- Essential services - Highlight the 10 essential services covered under the Affordable Care Act, including preventive procedures.
- Tax-advantaged accounts - If offering health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement accounts (HRAs), explain how they work, how employees can fund them with pre-tax dollars, and the different rules for reimbursing medical costs.
Financial Wellness Many students in the U.S. receive little to no education on financial management, making it essential for employers to help employees make smart financial decisions. This includes educating new hires on 401(k) plans, tax-advantaged accounts, and the importance of saving for retirement. Explain employer matching contributions and vesting, and encourage continued education and open communication throughout the year.
Continuing Education Maintaining an open-door policy for employee questions and concerns, and providing access to resources and websites to review benefits, will help keep the benefits conversation going and demonstrate the employer's commitment to the well-being, health, and financial success of their employees.
In conclusion, educating Gen Z employees on their benefits and helping them make informed decisions will improve job satisfaction and build loyalty, leading to successful retention of key talent.