A May-September Benefits Mashup
With five generations currently making up the U.S. workforce—traditionalists, baby boomers, Generation X, millennials and Generation Z—employers are increasingly challenged to find a benefit mix that meets their diverse needs.
In fact, around 31% of employers say that offering or increasing benefit choices to the diverse needs of employees is their highest priority over the next three years, according to a survey by Willis Towers Watson. But over half of employers believe they do not have effective listening strategies for understanding the benefit desires of their workforce.
Plus, many employees aren’t used to navigating multiple varied options in their benefits plan, so just increasing benefit choice is only part of the solution. “The challenge for employers is to offer both the options that address a diverse set of employee needs and the tools that make those choices easy to navigate and understand,” said Kevin House, national leader of client relationships and sales for health benefits delivery at Willis Towers Watson, in a press release.
Currently, most employer-sponsored health plans have between two to four medical and prescription plans, says Gallagher’s New England area president, Anita Verheul. “That’s really not that many choices when you consider the various generations in the workforce and varying healthcare usage,” Verheul says.
Brokers are playing an important role in helping employers build more choice into their plans and vet the many vendors offering those choices. In a previous interview with Leader’s Edge, Joe Ellis, senior vice president of CBIZ’s Employee Services Organization, said “You have to build out a plan that will meet the needs of as many people as possible. But you have to do it in a way that isn’t just the company giving out more and more money.”
Once they have expanded offerings employers are increasingly turning to decision-support tools to help their staffs figure out which benefits are best for them. Currently 55% of employers offer benefit decision tools to their workforce, according to the Willis Towers Watson report. Some 31% provide easy access to decision support through digital means like a mobile app, and over 60% plan to improve this capability in the next three years, the survey found. “With the rise of e-commerce, Americans have become smart comparison shoppers. Technology-powered solutions, such as an online benefit shopping experience and smart decision support tools, empower employees to make intuitive health care choices year-round,” Catherine O’Neill, senior director of health benefits strategy at Willis Towers Watson, said in the report.
“Benefits are confusing, especially to the younger generations,” said Jamie Hawkins, president and CEO of Benefit Technology Resources in Tampa, in a previous conversation with Leader’s Edge. “They didn’t grow up with union benefits like their parents. And they aren’t going to read a book about their options. This dynamic education is what they need.”
But digital applications have their drawbacks. While technology can help create a more personalized health benefits experience, it can also make it difficult for employees to keep track of how all their benefits choices interact. And siloed systems are instant headaches for HR departments.
“In the environment we are in now, most of the technology is on a stand-alone basis, which makes it hard to integrate and have systems talk to each other,” Verheul says. “If I am an employer and I have a payroll and separate open-enrollment system, I want them to talk to each other simply and easily, even effortlessly, but often the tools are on different platforms, which means either you pay a lot of money to get them connected or you implement a manual process somewhere in the flow.”
The cost of integrating benefits systems may be worth it, however, in order to avoid errors and bad choices.
“Having greater choice in plan designs and plan offerings is something we continue to see,” Executive Vice President of Sales, Employee Benefits of M3 Insurance, Rich Twietmeyer said. “I do believe that technology can assist in helping educate and guide employees through the decision-making process. The challenge is keeping it simple enough for employees to utilize but also personal enough to meet the unique needs and questions they need answered.”
The next step is to learn how to tweak and refine a benefits plan based on analytics of plan uptake by age cohort and some predictions on how employees’ benefits needs will change as they move up the age ladder.
“Most employers know how many employees they might have in each age category, but to lay that over how many in each category are key employees, future leaders, engaged and likely to stay for another three to five years, is critical to helping craft a benefits program that can keep pace with demographics but also stay competitive and viable based on their business projections,” Verheul says.