Following the year that brought us COVID-19, employers are faced with both challenges and opportunities. Employers are navigating the need to control health care costs and evolving to meet the demands of a multi-generational workforce – all while the impact of this global pandemic is still unknown.
Benefitfocus has a truly unique approach to how we support benefits administration that gives us a deep understanding of the nature and behaviors of our industry. Our access to enrollment data and insights gives us a rich, well-rounded perspective on employee benefit programs and strategies.
In the State of Employee Benefits™ 2021 report, we look at trends and insights on employer and employee benefits behavior from the last four years – before and throughout the COVID-19 pandemic. So instead of a survey, we’re looking at actual enrollment data from our platform across more than three million individuals and using our internal data science experts to anonymize, aggregate and analyze everything.
Benefitfocus associates recently hosted a webinar to give their perspective on the key takeaways from the report. Here’s what they had to share:
The Power of Choice
Benefits are not one-size-fits-all and employers are expanding benefit packages to address diverse needs and expectations within a multi-generational workforce.
- 72% of large employers offered a combination of PPOs and HDHPs in 2021.
- More than two-thirds offering accident and critical illness plans in 2021, and nearly 50% now offering hospital indemnity insurance.
- Specialty products have experienced even higher growth in employer offerings since 2018.
Misty Guinn, Director of Customer Advocacy at Benefitfocus commented: “I think one of the most exciting things that I'm seeing is the power of choice is coming up, and employers have really started to embrace the benefits philosophy that we say all the time in the industry that one size does not fit all. Needs change throughout the different moments that matter employees experience and throughout life milestones.
We also know the myriad of needs and expectations that [the multi-generational workforce] have. And especially after 2020, we saw that employees were looking to their employer to provide the right benefits at the right time and protect their wellbeing in the future.”
The power of choice is truly the key to employers’ benefits strategies in providing diverse opportunity for employees to take ownership of their wellness. By offering investment planning tools and wellness programs, employers are investing in their employees’ financial, mental and physical wellness in order to meet them where they are with what they need.
Continuing Uncertainty and the Financial Crisis
Employers know they must address deferred care, the impact of COVID long-haulers, and employee financial instability.
- Many employers took on a higher percentage of the premium in 2021 and employer premiums increased at a faster rate than employee premiums for all plans since 2018.
- Employee health plan premiums saw moderate increases in employee cost-share in 2021.
- Employee Out-of-Pocket expenses for HDHPs experienced the most growth since 2018 and 2020.
Misty: “So, first it's going to be really important for us to keep our finger on the pulse of our health claims data in real time as much as possible. Another term we're hearing in the industry is ‘COVID long-haulers’ and this is an area that you must have constant access to health claims to see, because we're still unable to predict the recovery of how long that's going to be – what types of benefits, what types of policies and procedures in your work are going to need to come into place to help support your employees and their families that were unfortunately impacted by COVID and still struggling to recover.”
Employers are investing in tools that give them insight into employee health plan behavior. With this power, employers are designing benefits strategies around the specific challenges that their employees are facing and taking an active role in mitigating any health care fears and financial uncertainties.
A Shift to Smart Health Care Consumerism
A quickly evolving workforce and savvy health care consumers have changed health care expectations. Increased participation and benefits engagement mean that employers must provide decision and health literacy support tools.
- A 30% increase in HDHP participation has led to more than 90% of participation in HSAs.
- Family HDHPs at highest % increase in premium for employees in 2021 at 4%; up 13% since 2018.
- Individual PPOs at highest % increase in premium for employers in 2021 at 7.8%; up 14.7% since 2018.
Misty: “I think it's kind of the perfect equation: the power of choice, plus, this growth and adoption gives us a smart health care consumer. As someone that's been a benefits director and created benefit plans with many options and choices, you want to see that your employees are actively participating in these plans and taking advantage of the value they can bring.”
Strategic employer partnerships are a valuable tool in addressing the needs of an evolving and increasingly knowledgeable workforce. By using communication strategies supported by broker and carrier partners, employers are providing tools and information to their employees through year-round contact, resources and opportunities.
Supporting Employees’ Total Wellbeing
Employers are increasingly interested in the need for a holistic approach to benefits design, addressing employee concerns with financial safety nets for the “what if” moments and preparing for the unexpected. And employees are embracing these benefits with significant adoption.
- Income Protection benefits participation has seen significant growth, especially in critical illness and voluntary accident participation, both up by 65%+ since 2018.
- Participation in voluntary specialty products is also growing with identity theft protection leading the way with +17% growth since 2018.
- Employees are participating in voluntary benefits no matter what health plans they choose, even across PPOs and HDHPs.
Misty: “Well, this is another exciting change for me, because I'm really passionate about total wellbeing and having programs that support all pillars of our employees’ wellbeing – from physical, mental, social, and purpose. It's really all about rebuilding that psychological safety.
The growth in income protection benefits like critical illness, accident and hospital indemnity should go hand-in-hand with the rise of HDHP adoption. They provide financial safety net that gives some peace of mind for those 'what-if' moments when you make the move to the HDHP options. And from 2020 we all learned that we should be more prepared for the unexpected – especially when a health care and financial crisis overlap! And I think the growth in the specialty products are a great illustration of what employees are facing and what they are worried about.”
Being prepared with strategies and products when employees need them has paid dividends for employers. The last year proved that being able to pivot health plan strategy and offerings effectively put employers in the position to support their group when they needed it most. However, that work is done well before the “what if” moments happen. Employers must have the tools that give them access to research and planning so the health plan insights ensure their strategies are timely, flexible and still effective.
Misty: “We're still living in this world of uncertainty and…my big things looking ahead, really are having the ability to look at those cost drivers, and to be agile and flexible with making changes to best fit the needs and expectations of our employees. Also trying to find ways to engage with them on a regular basis is critical.”
Watch the on-demand webinar, 2021 State of Employee Benefits: The Story Behind the Data now!