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Take time to study options for benefits

Many fail to take full advantage of open enrollment periods

NEW YORK — As the "open enrollment" season begins at most companies, workers need to re-evaluate their health-care insurance plans and other employee benefit offerings to determine which best satisfy their needs.

But studies indicate that many people allot a half-hour or less to the task, and then simply renew last year's selections without weighing the changes in their benefits or in their lives, according to Bill Mullaney, president of MetLife Inc.'s institutional business.

That's a problem because employees are being asked to take more responsibility for selecting — and funding — their benefit programs at a time the costs for many of them are going up, he said.

One of the most expensive benefit categories is health care, and costs are expected to rise nearly 9 percent next year, according to Hewitt Associates, a global human resources company based in Lincolnshire, Ill. As a result, the average employee can expect to pay about $330 more in health-care costs in the coming year, or about $3,600 in premiums and out-of-pocket costs.

Tom Billet, a senior consultant with Watson Wyatt Worldwide Inc., a human resources consulting firm headquartered in Arlington, Va., said it's important for workers to educate themselves about their options during open enrollment "because making the right choices can lead to savings of thousands of dollars, while making the wrong ones can potentially cost thousands of dollars."

Billet said this means workers should read the benefit packages provided by their employers and not hesitate to ask questions about them from human resources offices or call centers set up by benefit providers.

So what, aside from price, could be so different year-to-year?

For one thing, companies increasingly are providing incentives and tools to encourage healthy behavior, such as losing weight or quitting smoking, and adding penalties or boosting premiums for those who don't make lifestyle changes, Billet said.

In addition, many companies are setting up disease management programs with free drugs to treat chronic conditions like diabetes or asthma, or underwriting preventive screening tests such as mammograms.

And some are adding "spousal surcharges" if workers seek to cover their spouses who have access to insurance through their own employers.

"Families have to look at the benefits both (spouses) are offered and decide what to do," Billet said. "In some cases, it might make sense to pay the surcharge, while in others you won't want to do that."

Sara Taylor, head of open enrollment at Hewitt Associates, suggests workers focus on what she considers to be the most important offerings — health-care insurance and retirement savings plans.

"Workers don't have to pick all the benefits — and many can't afford to — so go for the big-bang ones," she said.

Taylor added that not making a choice for medical coverage can have ramifications, too.

"If you don't select a health plan, some employers will say, 'You will stay in what you have today,"' she said. "Others, if you don't act, will decide that they'll move you to another plan of their choosing.

"And some have become very aggressive, saying 'If you don't enroll, we'll put you into the 'no-coverage' category for medical."'

Randy Stram, vice president of MetLife Employee Benefits, a division of the New York-headquartered insurance company, said a survey of workers found that the majority would like more help in selecting benefits, with six in 10 saying they would like employers to suggest benefits most appropriate for their ages and lifestyles.

"Twenty years ago, employees didn't need to make any decisions because there were no choices," Stram said. "Today, benefits have become more complicated, and employers have shifted more of the decision-making responsibility to their employees. But employees are saying, 'I'm ill-prepared to make these decisions."'

MetLife has developed some "rules of thumb" guides for workers in various life stages, available on its Web site at When it comes to health insurance, for example, single workers are told that if they're young and in good health, they should consider high-deductible plans, while new families are told that while health management organizations may be cheapest, a family is likely to want a wider selection of doctors and should consider other plans.

Stram said that according to the latest survey, workers still rate medical insurance as their most important benefit, just ahead of paid vacation.

Other prized benefits, in order of preference, are 401(k) retirement accounts, prescription drug benefits, dental benefits, sick leave, pensions, vision coverage, life insurance, disability insurance, flexible work schedules, long-term care coverage, financial planning services, homeowners and renters insurance, income annuities, auto insurance and banking services.