The world of employee benefits in the marketplace has never been more fascinating. A little over a decade ago we were reeling from a recession. Benefits and perquisites were caught in the vice grip of austerity and well-guarded operating budgets.
Today, in the U.S, we’ve entered 2020 on a high note with the best labor market in decades and record low unemployment rates. Employees have choices, and employers want to retain their best talent. Benefits programs are a key component of those retention strategies. These programs need to be creative, cost-effective and make space for employee-driven decisions.
In this climate, there are some key trends driving employee benefits in 2020 and beyond.
For help in unpacking these trends, I recently sat down with Cynthia Dietzel, Senior Vice President of USI Insurance Services. USI is one of the largest insurance brokerage and consulting firms in the world, providing property and casualty, employee benefits, personal risk, program and retirement solutions across the globe. Dietzel has 35 years of experience working with companies to create, manage and communicate their Employee Benefits Programs.
The Millennial Factor
Studies have long forecast that, by this year, Millennials would comprise roughly half of the American workforce—and 75% by 2025. Rather than confine this group to stale descriptions of what Millennials want and don’t want, the smarter employers are tapping into the ‘millennial qualities’ which can elevate the entire workforce.
“Millennials are driving the technological surges in employee benefits programs. These technological advancements impact the types of plans and how they are delivered. Carriers are presenting information to brokers and clients very differently. Millennials are also driving the concept of owning your healthcare needs. This, in turn, is causing companies to think about health programs like wellness, for example, in more creative ways. The gamification of wellness programs is a strong example of this,” said Dietzel. As with any program engaging the entire workforce and the use of company resources, C-Suite buy-in and support is key to its success.
According to Dietzel, telephonic medicine—where licensed primary care physicians diagnose routine, non-emergency problems, and make treatment recommendations via telephone—are also largely influenced by the Millennial generation. It’s not a leap to believe that Generation Z, the heirs apparent, will push those boundaries of care even further.
And, as work and life often converge, employers are responding to the economic needs of this generation, in some cases by offering help in paying off their student loans. Here’s this student loan payoff program in action at several US companies.
Your Mental Health
We’re living in an increasingly polarized society. What was once a resolvable conflict can now devolve into public shaming or being ‘cancelled’ from membership in society. It’s ugly out there. Add to this, the demands of business and you have a recipe for unseen levels of stress.
The good news is that we’re talking more openly about mental health and employers are increasingly sensitive to the need to provide care in this area. “More clients are asking me how to integrate mental health and wellness into their programs. Without violating privacy laws, employers can be a great resource for employees once they realize that the downstream effect of business demands is a host of mental health-related issues,” said Dietzel.
Interestingly, according to Dietzel, with more women at the decision-making table regarding decisions, this topic now appears to be more central to program designs.
Transparency in Care…and Costs
Consumer-driven products such as HRAs, and HSAs, embrace the concept of transparency to help employees make better decisions. This transparency enables comparison shopping, and ultimately better cost management.
Driving down costs while not sacrificing quality care is the brass ring. “The large carriers are sharing data internally between their medical and prescription lines of business so that clients can understand how utilization in those two areas impacts overall costs,” according to Dietzel. She is also finding that more clients are sharing their employer costs—and cost drivers—during open enrollment meetings as they help employees understand the bigger picture.
One of the reasons why Amazon appears to be taking over the world is the fact that you can now sit on your couch and order everything from a turtleneck sweater to Apple AirPods. People like one-stop shopping, including healthcare consumers.
Networks within networks are now driving care, helping to lower costs and greatly increase convenience for patients. “Carriers are creating smaller performance networks by developing different arrangements with other providers. In these arrangements, providers, physicians and hospitals, are brought together to share in the financial and medical responsibility for patients. These Accountable Care Organizations (ACOs) increase provider accountability, and ensure cost-effective, quality care. We see more Multi-Specialty Practices, in general, where patients can receive all care within a single practice and all providers can access information about their care, from preventive services to specialty services for major diagnoses. Under these constructs, an individual with a cancer diagnosis can receive delivery of care in all areas of need: routine check-ups, x-rays, lab work, oncology visits, etc.” said Dietzel.
CHROs and their teams are in an ideal position to serve as business partners managing costs for their employers, even as they strategically tap into the needs of employees. All of these trends are ways to demonstrate compassionate leadership, not to mention nimbleness across HR program areas.
Opportunities abound. I can’t wait to see what is on the horizon.