Emerging trends in the health care insurance and benefits landscape threaten to have a lasting impact on the way employers provide and administer employee benefit packages. Benefit advisers hoping to not only remain relevant to their clients, but to thrive during this time of adversity, will need to adjust to the changes ahead, according to Rick Lindquist, president of Zane Benefits.
He told attendees of EBA’s Workplace Benefits Summit last week that his company is focusing product development on 5 key trends in the industry today.
First and foremost, the number one trend in employee benefits, he said, is a sharp rise in the cost of employer contributions for health care insurance. “Employer health insurance costs are rising faster than profits,” he said, tripling from 199 to 2015, in fact.
“The way things are going is not sustainable,” he said. “At some point the company has to make a choice between making money and offering benefits.
“What this trend is going to do is force companies to get out of this cycle and come up with a new way to offer these benefits,” he added. “This trend is driving employers to seek ways to fix the cost of offering benefits so they can sustain them.”
Second, he said, employee costs are also rising, and rising faster than wages are, a trend he says is causing employees to be dissatisfied with their employee benefits.
The third trend of note in the industry, is shifting public policy, most notably the Affordable Care Act, but also a trend toward shifting more financial responsibility for benefits to consumers.
The fourth trend permeating the benefits industry, Lindquist said, is the increased use of consumer technology, a trend which actually aids employers and advisers in shifting more responsibility to individuals.
Trend number five of note in the industry is the decrease in unemployment rates, which Lindquist says forces the labor market to become more competitive and will increase importance on employers’ compensation and benefit packages.
Last, but not least, millennials are entering the workforce in droves and will comprise the majority of the workforce by 2025, Lindquist says. Millennials, he said, want to own their own way when it come sto benefit selection. While, they are not the most important people at the company today, they will be in the future, Lindquist, said, adding that “their demand to operate at their own convenience is going to grow and need to be addressed.”
Advisers and employers, he said, should translate these trends into products and offerings that meet the needs these trends present for employers and their employees, Lindquist said.
Modern benefits
The four characteristics of modern benefit offerings, Lindquist said, include:
- They are technology-driven, including through the use of a mobile experience and a Facebook like interface
- The offer maximum choice and convenience;
- They are employer-funded, employee-owned;
- They offer a better value than cash.
For advisers, he said, these trends mean they “must be able to deliver direct to consumer employee services, or broker a third party service.”
“It’s a massive shift in the way we do benefits,” he added.
