The time has come for 2016 budget planning and, as always, the newest trends are driving decision making. One of the biggest areas experiencing significant change is employee benefits. The past few years have brought paramount changes in health care, benefit technology and workforce trends and they’ve all culminated to this moment. Here are five major benefit trends for 2016:
1) Consumerized health plans. Rising medical costs and (although delayed) the pending Cadillac tax have increased interest in consumer-driven health plans. Employers are starting to lean toward high-deductible health plans with HRAs or HSAs to help employees with out-of-pocket expenses that would help them keep costs down.
2) Customizable benefits. Gone are the days of a one-size-fits-all benefit package. The blended workforce has complicated the world of employee benefits. There are four generations in our workforce, all of which have different backgrounds and preferences. What employers offer as benefits should seek to accommodate those differences. For example, members of Generation X place a lot of importance on compensation, but the Baby Boomer generation values retirement and health care. The main areas of customization employee benefits will start to see is more voluntary benefits options to choose from like dental, vision, and accident insurance as well as an increase in high-deductible-health-plans.
3) Healthcare consumer engagement. As employers and employees alike are suffering the high costs of healthcare, there’s increased efforts toward making healthcare benefits not just more affordable, but also easier to understand and track. The creation of patient portals, online resources and personal health devices has sparked an engagement trend in the healthcare industry that is only increasing. Deloitte’s 2015 Survey of Health Care Consumers provides some interesting insights:
• 34% of healthcare consumers believe doctors should encourage patients to research and ask questions about their treatment;
• 58% of healthcare consumers feel doctors should explain treatment costs to them in advance;
• 60% of healthcare consumers that use technology to measure fitness and health improvement say that utilizing health technologies has improved their behavior.
The report also revealed an increase in patient portals and the use of performance scorecards for consumer research purposes. This new trend toward technologies and processes that streamline benefits takes consumer engagement to another level, and the HR tech industry is picking up on this. For example, Oration is a prescription management platform that uses data analytics to help people find the best deals on their health care purchases. The industry will no doubt see more and more ventures like this in employee benefits engagement.
4) Concerns for the future. Even though 66% of U.S. workers are satisfied with their healthcare benefits, 59% don’t see them as affordable in the next five years, according to a new study by Mercer. There’s also more demand from younger workers for employers to make benefits more flexible. In fact, 70% of respondents ages 34 and younger would like to reduce the value in some benefits while increasing value in others. The study revealed retirement benefits ranked higher than low healthcare cost in this age group. These new concerns, particularly in the younger generations, indicate a potential need for a shift in how benefits are valued and what kind of financial planning the workforce might benefit from to ease their worries about the future of healthcare.
5) Financial wellness programs. The trends for 2016 all revolve around the idea that customization leads to a more personal experience. Employers are moving toward this because they understand that engagement leads to satisfaction and happy employees perform better. Financial wellness programs are another way employers are trying to increase engagement and satisfaction. It makes sense. Money is the No. 1 source of stress in America, and stressed out employees can’t be fully engaged in their work. With effective financial wellness programs, employees can learn how to better manage their finances, or better yet, earn more money by making valuable investments, and hopefully, these efforts will reduce the amount of stress induced by financial worries.
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The workforce is changing so rapidly it’s hard for the industry to keep up. There’s a storm of change approaching the employee benefit landscape and if employers want to ensure an engaged and retained workforce, it’s time they started planning their 2016 budget with these key trends in mind.
Olson, CEBS, CMFC, is managing partner at The Olson Group in Omaha, Neb., and EBA’s 2015
