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5 Stats That Could Make You Re-Evaluate Your Benefit Administration Strategy

The world of employee benefits is ever changing, requiring HR and benefit leaders to constantly be aware of the variables that may impact their strategy. An effective benefits strategy must account for everything from regulatory requirements to meeting the needs of five different generations in the workforce.

When used strategically, benefits can be the key to achieving employer of choice status, greater talent retention and organizational cost savings. If that's not enough to convince you to step back and take a look at your current benefits strategy, maybe these industry statistics will entice you:

1. Benefits account for nearly 30% of total compensation costs, on average.¹

And with health care costs expected to increase anywhere from four to 10 percent in 2021, you'll want to make sure that growing part of your budget is spent wisely.² 

Some questions to ask to see if your benefit administration strategy is effective in this area:

  • Do you have the visibility you need to see where your health care dollars are going? 
  • How are you helping ensure everyone on the plan is eligible?
  • Are you able to use predictive analytics to estimate costs for plan design changes?

2. Four out of five employees enroll in the wrong health plan.3

When employees aren’t empowered in their benefit decisions, they're left either over-insured (a direct waste of money) or under-insured (leads to major claims expense when employees put off care due to cost and their condition worsens). Employees need the tools to understand their plan options beyond the price of the premium.

Some questions to ask to see if your benefit administration strategy is effective in this area:

  • Can employees easily compare plans and access resources at the point of decision?
  • Are employees able to estimate out-of-pocket costs based on historical claims data and expected utilization?
  • Does your benefit administration system present best-match recommendations based on employee profile and preferences?

3. Employees who understand the total cost of their benefits are more satisfied with their benefits.4  

A modern benefits platform that includes consumer-friendly, data-driven decision support tools can transform the enrollment process into a simple online shopping experience that guides employees to the best option for their health and financial needs.

Some questions to ask to see if your benefit administration strategy is effective in this area:

  • Is the enrollment process similar to shopping on familiar eCommerce sites like Amazon?
  • Do you use video and other multi-media communication to make benefits easier to understand?
  • Are employees able to access benefits enrollment and information on their mobile device?

More benefits. Less administration.

4. 29% of employees report having left a job or rejecting a job offer due to the benefits offered.5

As the economy recovers and companies begin hiring again after COVID-19, benefits will play a key role as a differentiator for both attracting and retaining top talent. Benefits strategies should be designed to address the widely varying demographics and psychographics of today’s multigenerational workforce.

Some questions to ask to see if your benefit administration strategy is effective in this area:

  • Does your benefits package include options to supplement health plans and protect employees' financial well-being?
  • What opportunities do you have to differentiate your benefits offering from other employers in your industry?
  • Do your employees understand, and appreciate, the full value of their benefits package? 

5. 37% of employers say the ability to integrate benefits technology with HR functions is the most valuable outcome of implementing a benefits administration platform.6

Lack of sophisticated automation and reporting tools can hinder you from giving your benefits strategy the attention it deserves, impacting key business priorities like talent retention and engagement.

Some questions to ask to see if your benefit administration strategy is effective in this area:

  • Does your benefit management system integrate with your HCM or ERP solution to eliminate redundant work and inefficient processes?
  • Are your payroll deductions automated based on the latest enrollment data?
  • Are you able to transmit enrollment information to all of your insurance carriers and benefit providers seamlessly?

Download the Buyer's Guide to Effective Benefits Management Technology as a resource to help evaluate your current  benefits administration strategy as well as the technology that supports it. 

 

1 USBLS
2 Medical cost trend: Behind the numbers 2021, PwC’s Health Research Institute
3. Johnson EJ, Hassin R, Baker T, Bajger AT, Treuer G: Can Consumers Make Affordable Care Affordable? The Value of Choice Architecture.  
4. 2020 Aflac Workforces Report
5. 2020 Aflac Workforces Report
6. Pacific Resource HR Technology & Benefits Administration Survey

  

About the Author

Catie Grigsby is a senior content marketing manager at Benefitfocus, where she develops resources to help employers, health plans and consumers better understand how health and benefit trends are impacting their world. From webinars and whitepapers to blog posts and case studies, Catie focuses on curating and creating insightful content for audiences to reference as they navigate the complex world of health care and benefits. Catie holds a Bachelor’s Degree from Clemson University, as well as a Group Benefits Associate (GBA) certification from the Wharton School of Business.

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