3 Employee Benefits Trends You Can’t Ignore
The landscape for employer-provided benefits has changed considerably in recent years, driven by rising health care costs, the passage of the PPACA, shifting household demographics, and challenges in recruiting and retaining key workers.
Employers have responded to these trends in a variety of ways, but three clear
trends have emerged: the increasing sophistication of wellness programs, shifting a greater share of the costs to employees and increasing the range of choice of benefits offered.The Maturation of Wellness Programs
Wellness programs have moved beyond the early-experiment phase, as more and more organizations have had their programs in place long enough to evaluate ROI. Companies like Jack in the Box are even finding ways to implement wellness strategies in decentralized workspaces
These programs are saving some companies significant sums of money, an industry research report from PricewaterhouseCoopers found
. The cost of U.S. health care services is expected to rise 7.5% in 2013, more than three times the projected rates for U.S. inflation and economic growth, the report found. But premiums for large employer-sponsored health plans could increase by only 5.5% in part because of the successful implementation of company wellness programs.Shifting Costs to Employees
As health care costs outpaced inflation, many employers discovered that they couldn’t afford to keep picking up quite so much of the tab themselves and began looking for ways to reduce their share of the burden. One increasingly popular technique: Offering consumer-directed/high-deductible health plans in lieu of HMOs or PPOs.
“HDHPs require more than simply an increased financial stake,” noted benefits expert Carol A. Harnett. “Employees/consumers need to learn new skill sets, including negotiating what they pay for health care services and questioning health care providers about the recommendations they make regarding testing, surgeries and the use of generic prescriptions. This change in how we interact with health care providers, clinics and hospitals challenges how we've built our relationships with caregivers that's difficult for even people with a medical background to negotiate.”
Core health care plans aren’t the only area where employers are asking workers to pick up more of the tab. Organizations are also increasingly moving away from universally paying for a wide range of insurance benefits for workers, and instead making such coverage voluntary and giving employees the opportunity to pay the premiums themselves. Employees still benefit from the reduced rates and more comprehensive coverage available through a group plan, compared with shopping for such benefits on their own.Increasing Employee Choice
An increasing number of employers expect to move to an "employee choice" benefits model over the next two years, giving employees greater responsibility for choosing the types and levels of coverage for their benefits, a recent survey by CFO Research Services and Prudential Financial found
Making this transition successful represents a tough challenge for HR and benefits professionals, industry experts say. As more employers give workers the responsibility to decide whether to purchase group benefits such as disability, life, vision and dental insurance, they are also going to have to give them guidance on making appropriate choices for their families.
Bridging that communications gap requires developing a comprehensive strategy for voluntary benefits. Most of the challenges can be overcome by creating and executing a tailored, multi-point communication program that leverages interactive learning tools and traditional print media.What are the top employee benefits trends you are seeing?Winston Benefits is a HR solutions company that helps businesses automate and streamline their employee benefit programs. Custom designed and developed client specific solutions help enrich their total compensation and rewards programs while optimizing processes such as benefit communications, enrollment and administration.