One Size Fits One
DirectPath recently released its “2018 Medical Plan Trends and Observations Report.” The organization analyzed research from Gartner, looking at more than 900 employee benefit plans to gauge trends in employers’ 2018 strategies. Of particular concern to employers was managing their consistently rising healthcare costs.
I think we are just starting to wrap our heads around the fact that there is no silver-bullet solution to healthcare costs. Every case is going to be individualized whether it’s to the company, to the industry or to the geography. So every tool that works for any given organization is going to vary.
Organizations used to have large and robust human resource benefits departments and a person who could sit down with employees and walk them through their benefits questions and answer them. But now employees don’t know where to start. Now we have regulations like HIPAA making it impossible to do that even if we had the bandwidth to have these conversations. Increasingly, employers and brokers are coming to companies like us for assistance because they know they can’t handle all of that, but it is an increasingly critical part of the puzzle. Particularly with each new generation of health plans, it’s becoming more complex.
Particularly now that we have five generations in the workforce, each generation has different preferences and priorities. That’s why one size doesn’t fit all. And it does vary somewhat by generation. For instance, really young people may like high-deductible plans because they don’t have a lot of medical expenses. Or baby boomers may be inclined to go for a high-deductible plan because they may have more discretionary income. Older generations may also understand that an associated health savings account may give them a place to save more money for retirement.
The notion was that the HDHP was going to drive down the cost of healthcare by making people shop around, but it drove down utilization. That’s horrifying that so many people skipped care because they were afraid of how expensive it was going to be.
A new one getting more attention is identity theft protection. Supplemental life, accidental death and disability always remain popular for voluntary benefits, but the percentage of those dropped dramatically this year. But I’m thinking that’s because more employers are treating those as standard benefits now instead of part of the voluntary offerings.
I remember seeing some statistics that, over the past five years, salaries have gone up an average of 1.9%, but medical costs have gone up 9%. So you know employees are falling behind. And in a tight job market, that can be challenging for employers who are trying to attract and retain top talent.
I think employers are looking for partners. Human resource departments and benefit departments are getting smaller, and they just don’t have the level of bandwidth to provide the support they would like to. They’re looking for the brokers to come in and help them—whether it’s the brokers themselves or the brokers identifying partners they can work with. We’ve certainly had a number of brokers reaching out to us to see if we can support voluntary benefits, sales, uptake or helping with the engagement process. There’s a lot more demand to tailor to the needs of the individual employees, and brokers need to determine how to do that well. Going back to there being five generations in the workforce, we’ve got to work with baby boomers down to students graduating from college who have always been able to personalize everything from their coffee to their cell phones.