Global insurance brokerage Hub International Limited (Hub) has found that many US companies still aren’t embracing multi-year employee benefits plans, despite some seemingly clear-cut advantages.
Hub’s study entitled: Employee Benefits Barometer 2018: New Research Reveals the Business Value of Strategic Benefits Planning, questioned more than 300 employee benefits professionals from organizations with 50 to 1,000 employees. The study examines the complexities of managing benefits and the value of multi-year planning to better position human resources as business strategists to the executive suite.
Managing benefit costs remains employers’ top benefit priority, with 66% of the vote. Respondents told Hub they saved money via high deductible health plans, multiple plan options and telemedicine benefits. More than half (54%) of respondents said they believe they’ve done everything they possibly can to control rising medical costs.
“The fact that 54% of respondents think they’ve done all they can to control rising medical costs is really interesting. There’s always more to be done,” said Mike Barone, president of Hub International’s Employee Benefits practice. “It’s paired with a fundamental lack of strategic planning, with only 12% of respondents planning out benefits for 18 months and beyond. This tells me the overwhelming majority are still buying employee benefits on a transactional and episodic basis.
“There are many viable cost management benefit strategies for companies to explore but many are unaware of their options. Or worse, they don’t have an advisor who can help them adapt solutions such as pharmacy benefits management carve outs, narrow networks, and reference-based pricing for their employee population and organizational needs.”
Another key insight from the study is that few employers prioritize addressing the diverse benefit needs of a multi-generational workforce. Even though millennials are playing an increasingly important role in the workforce, only 20% of respondents said adapting to their needs was a priority.
Tailored insurance solutions can address workforce preferences and reduce health plan costs, Barone explained, but any tailoring “needs a strategy”. It can only be successful if a business has a sophisticated plan and a benefits roadmap that incorporates research into employee demographics and preferences.
“Insurance brokers can sit down with a HR executive or the benefits decision maker and help them build out this roadmap,” Barone told Insurance Business. “In most industries, human capital (people and talent) is an integral part of a successful business plan. If you walk the sequential logic stream backwards, you get to the fact that benefits and compensation are really important for most employees.
“Companies need to take another step back and ask: are we providing tailored benefits?; do people value our plan?; do they like the culture we have?; are our benefits and compensation competitive or even ahead of our peer group? Those are all really good questions a broker can run through with commercial clients. I believe it’s absolutely possible for a company to link its benefit strategy to its corporate strategy, and the insurance industry can help them do that.”
