Inflation’s Impact on 2023 Open Enrollment
Many employees are currently feeling financially strained because of inflation. With open enrollment fast approaching, inflation could impact the choices employees make when it comes to their benefits. Employees are likely considering which benefits matter the most and how to optimize the money they spend on those offerings. As a result, this year’s open enrollment may be more challenging than usual for employers and benefits providers. This article explores how inflation is impacting employees’ benefits selections and approaches to open enrollment and outlines what employers can do to help.
Nearly half of all U.S. workers stated that inflation is making it difficult for them to pay for their employee benefits, according to The Hartford’s Future of Benefits Pulse Survey. In addition, 40% of employees reported that they will cut back on the benefits they select during 2023’s open enrollment because of inflation, with younger workers being more likely to scale back their benefits than older workers.
According to Voya research, due to the financial stress inflation is placing on employees, 70% of workers want their employers to help them to optimize their benefits selections, including retirement savings, health care, health savings accounts and voluntary benefits (e.g., critical illness, hospital indemnity, disability income or accident insurance). This research also revealed that because of inflation, employees plan to spend more time reviewing their benefits selections during this year’s open enrollment than in years past.
Many employees want to optimize what they spend on their benefits and are looking to their employers for help.
By understanding how employees approach benefits selections, employers can help them make better choices during this year’s open enrollment season. According to The Hartford’s previously mentioned survey, employees often make the same benefits choices as they did in the previous year. The survey also revealed that employees tend to fall into one of the following categories when selecting benefits:
Inflation has placed employee benefits at the forefront of many employers’ attention and retention strategies. Employers can take steps now to help their employees better understand their benefits options and make more informed decisions. This can help employees better protect themselves and their families in the upcoming year.
Here’s how employers can assist employees this open enrollment season:
It’s important to note that, in addition to employees, many employers are also being impacted by inflation. Some employers are being forced to adjust their budgets for
medical and voluntary benefits spending in the upcoming open enrollment season.
Employee health and well-being remains one of the most important priorities for many employers. Accordingly, employers have the opportunity to simplify and personalize their open enrollment this year to help employees determine how best to allocate their potentially limited resources strained by inflation. By giving employees more time to review benefits offerings, employers can help them optimize their resources and make the best benefits selections for themselves and their families during this period of financial difficulty.
Marty has spent most of the last 20 years developing software in the marketing space and creating pathways for software systems to talk to each other with high efficiency. He heads our digital marketing efforts as well as oversees any technology implementations for our clients. As a partner, Marty is also responsible for internal systems in which help our team communicates with each other and our clients.