Half of working adults would rather give their spouse control of the TV remote on Thanksgiving than review their benefits options. Many of them don’t understand the benefits their company offers or aren’t aware that certain plans like life insurance are even available. That’s because the information surrounding benefits is often either confusing or comes from disparate sources and vendors and the process for signing up for benefits is long and cumbersome.

Bundling your benefits together can help alleviate these pain points for employees, thus increasing engagement with your plans. It can also help you save money, streamline your open enrollment process, and relieve some of the administrative burden on your HR team. In addition, bundling your benefits gives you the opportunity to support a happier, healthier, and more productive workforce.

What is benefit bundling?

Bundling your benefits can take two forms. The first, is combining multiple types of benefits into the same plan. An example of this is presenting multiple insurance lines like critical illness and accident and hospital indemnity into a single benefit choice. The effect is that it can widen employee engagement with the benefit (older workers are more likely to see critical illness insurance as a desirable benefit while workers with risk-taking hobbies like rock climbing might value accident insurance).

The second way to bundle benefits is to offer multiple product lines with the same vendor. For example, finding a vendor that offers a variety of saving and spending accounts, such as HSAs, FSAs, Lifestyle Spending and Medical Travel Accounts. This enables the company to save money on these product lines, to customize the plans and streamline plan administration. Having a single point of contact for benefits also makes it easier for employees to engage with and manage their plans.

Here is an in depth look at the advantages of bundling your benefits.

1. Get more affordable options

One of the reasons large companies often get cheaper pricing on benefits plans is due to economies of scale. As the number of subscribers increases, the cost to the vendor to administer the plan goes down. That’s because they can spread out the claim risk amongst more people. So a large company’s plan starts out cheaper, then, because the number of subscribers they will bring to the vendor is valuable, they have the bargaining power to further negotiate their cost down. Bundling can have a similar effect. This is how.

In the first instance of bundling, where you’re combining two types of insurance into one benefit choice, this can have the effect of increasing the number of subscribers to these plans. The more subscribers you have, the cheaper the plans are.

In the second instance of bundling, where you’re offering multiple product lines from the same vendor, you could receive a discount on the plans’ costs. Vendors often offer these discounts to incentivize companies to buy more of their product lines.

Affordability of your benefits plans is a good thing for both employers and employees. Cheaper plan costs might mean you, as the employer, can afford to offer a bigger allowance in your Lifestyle Spending Accounts (LSAs) or contribute more to employees’ Health Savings Accounts (HSAs), both of which are powerful recruitment and retention tools.

Cheaper plan costs might also mean that more employees are able to participate (and realize the benefit of) the plans because their financial responsibility is lower and fits more easily into their budget. More affordable benefits can also help reduce employees’ financial stress, which is currently at an all-time high.

2. Gain the ability to customize your plans

Another advantage to bundling your benefits is that vendors are more likely to enable you to customize your plans to meet the needs of your employees and match your company ethos. If you’re a smaller employer, bundling your benefits can help vendors offer you the same variety of plans that large employers have access to (at an affordable cost).

To customize your benefit plans effectively, you can make use of existing benefit utilization data and employee surveys to determine the most valuable and effective plans you can offer. You can also determine how to tailor said plans to your employee demographics.

Customizing your benefit plans will help you meet the broadest range of employee needs, which can help boost adoption and help employees realize the value of these plans.

3. Have your benefits all in one place

When you bundle your ancillary saving and spending accounts, like HSAs, FSAs, HRAs, Lifestyle Spending and Medical Travel Accounts, under one vendor, it makes it easier to manage the accounts for both your HR team and employees. This lowers the administrative burden on your HR team and makes running reports on employee utilization data much easier. It could even negate the need for expensive plan management software.

Having all of the benefits in one place can also streamline open enrollment planning and communication, which can lead to greater sign ups and benefits adoption. There’s one vendor generating communication materials, one vendor to field questions, and one vendor to which employee information must be submitted. This simplifies communication, reduces the chances for error, makes it clear where both administrators and employees can go for education and support.

A single vendor through which to access benefits also makes it easier for employees to manage their accounts. There’s one place to go when they have questions, need to order a new card, or change their information.

4. Foster a happier and healthier workplace

Studies have shown that access to health benefits leads to a healthier workforce, and a healthier workforce is a more productive workforce. Surveyed employees have said that the overall quality of a benefits package can be the deciding factor when taking a job and they are more likely to feel loyal to a company where they feel valued and supported. Providing tax-advantaged benefits and post-tax spending accounts can also help relieve the financial stress many employees feel today.

Bundling those benefits together can help ensure employees:

• Understand the benefits they’re being offered,

• Do a quick cost/benefit analysis to see if any or all off them will meet their needs,

• Sign up for those benefits,

• Manage their plans.

All of this can help boost employee engagement with your benefits package which can lead to a healthier and happier workforce. Which can help strengthen your company overall. Employee financial stress leads to lost productivity (including work hours spent dealing with their financial problems), poor employee physical health can lead to increased absenteeism and poor workplace performance and poor mental health can lead to burnout and toxic working relationships.

Offering a robust benefits package, complete with HSAs, FSAs, LSAs and MTAs that support employees’ physical, mental and financial health, and making these benefits easy to access by bundling them together, can help ensure your workforce is strong and resilient and in the best position to do their best work.

5. Attract better talent with more benefits

Since bundling benefits together can help lower their cost and widen the variety available to small and medium-sized employers, doing this can help companies offer more and better benefits. This is what employees want. In fact, according to MetLife’s benefits survey, 30% of employees would consider taking a job at a company that offered less pay but better benefits.

Benefits are that important. But you don’t want to just offer any benefits. You want to offer the right benefits that are more likely to be valuable to your employees and positively impact their lives. This shows the company cares about the needs and personal lives of its employees and that is a company people want to work for.

To do that, you have to leverage employee demographic and utilization data to determine what those impactful benefits will be. Then use a bundling strategy to customize your plans to meet those targeted needs.

Questions to ask when bundling your benefits

The down side to bundling is that you could end up with a program or programs that you don’t need or are under-utilized by your employees. To ensure you’re gaining value from your bundling strategy, ask these three questions about each plan:

1. Do we need it? You want to include plans that fall in line with company ethos and employee data and fill a hole in the current benefits package.

2. Will employees use it? You want plans that employees will find value in and that are easy for them to use. An adjunct question to this is: how will employees use it? Make sure you can reduce as much friction to plan usage as possible.

3. How much is it? Make sure you’re getting the appropriate discount on each plan for your bundle.

Lively offers benefits made for bundling

Lively is your partner in creating the most valuable benefits package for your employees and company. Lively currently offers HSA, FSA, HRA, COBRA, Direct Bill, Lifestyle Spending Accounts, and Medical Travel Accounts. We make benefits administration easy for both HR teams and employees alike with clear and simple communication, best-in-class customer service and a platform that was designed for ease-of-use. If you’re ready to up level your benefits package, reach out today and ask about our bundles.