More choice in products calls for enhanced communication
Manufacturing, healthcare, education and retail employers are offering more choice to their employees and increasing the need to improve benefits communications, and advisers can play a role in enhancing these interactions.
Based on benefit election choices made by workers in 260 employers across those four industries, cloud-based benefit provider Benefitfocus found that more employers are offering high-deductible health care plans alongside more traditional plans, and are communicating the value of voluntary benefits to ensure success with these plans.
“Educating employees on new options and the pros or cons of each plan in context of their own needs is as important as the plan offering itself,” says Jeff Oldham, senior vice president at Benefitfocus. “The differing adoption rates also speak to an important trend for advisers and the clients they work with — choice in benefits.”
The number of education industry employers offering HDHPs doubled to 44% over the past year, noted Benefitfocus from its “State of Employee Benefits — Industry Edition” report. Employees who work in that field, however, still prefer traditional plans, primarily HMOs, which accounted for 37% of enrollment choices. HDHP adoption also increased 30% among retail employees over the past year.
More manufacturers adopted HDHPs (61%) than any other type of employer. The investment paid off for employees who saw their individual-coverage HDHP premiums decline 9%, while employer premiums climbed 11% — defying customer averages.
Slightly more than half of healthcare employers offered an HDHP in addition to traditional plans, which was up from 37% in 2016, the data also shows. But employees in the medical field also experienced increases in monthly premiums for individual-coverage HDHPs and PPOs increased (19% and 17%, respectively) compared to average increases of 12% and 1%, respectively.
Benefitfocus also found that nearly 40% of retail employees elected at least one of three income-protection benefits and 11% elected all three, which produced year-over-year increases of 77% and 1,000%, respectively.
Oldham says benefit brokers and advisers should keep in mind that one size does not fit all when it comes to benefits packages. “It’s not about matching a specific plan with a specific industry,” he adds. “It’s about giving a diverse workforce, which every industry and employer has, whether due to age or lifestyle, the option to pick what benefit will support them best.”
Selection and education
He identifies two key takeaways: be sure clients are offered a wide selection of healthcare plans and voluntary benefits to fill coverage gaps, as well as proper education so that participants understand their choices.
“The perfect benefits package means nothing if an employee doesn’t know how to properly choose and use it,” Oldham says. “Brokers and advisers can do their part by strengthening benefits education so employees can make the best choices for their individual needs. Due to the additional risk and responsibility this new healthcare landscape places on employees, income-protection benefits, financial wellness and digital health will begin to play a more significant part in an employee’s tool box.”
Therefore, Oldham says, advisers would help themselves and their clients to look beyond traditional benefits to best help them.
Benefitfocus also recently released a regional edition of the annual report based on employee benefit election data from more than 500 employers on the service provider’s platform. The Midwest led in terms of HDHP and voluntary benefit adoption, while HMOs are on the wane out West as more employees there invest in health savings accounts. In addition, Northeast employees faced higher premiums but lower deductibles, while employees in the South experienced the highest out-of-pocket costs for all plans.