Expanded benefits offerings are helping organizations retain top performers.
By Tim Weber
What does a well-integrated benefits program look like these days? Nothing like yesterdayâs. Between healthcare cost pressures and regulatory uncertainties, organizations have to contend with not only a volatile benefits marketplace, but also the rising expectations and individual needs of the workforce. Partnering core health benefits with a robust voluntary benefits program can help employers solve these challenges.
Consider these talent trends: Even among the most satisfied employees, two out of five are seriously considering leaving their organizations, according to the recent Mercer Inside Employeesâ Minds study. Thatâs a potential loss of valued talent that firms canât afford. At the same time, 88 percent of employees see voluntary benefits as part of a comprehensive benefits package, meaning they can be leveraged as a valuable retention tool.
Talent retention isnât the only trend gaining attention. A lack of savings and financial preparedness has increased employee stress, with 80 percent of workers reporting that they suffer from it, according to a Purchasing Power survey.
This is a problem for organizations that struggle to meet employee needs on one hand while managing costs on the other. One successful cost management solution has been to offerâand in some cases, only offerâhigh-deductible consumer directed health plans (CDHPs), with 72 percent of employers expected to offer a CDHP by 2019, according to Mercerâs National Survey of Employer Sponsored Health Plans.
While CDHPs can be a lower-cost, paycheck-preserving option for many organizatons, they also can stretch an already financially stressed employee if the unexpected occurs. As out-of-pocket costs keep rising, voluntary benefits, such as supplemental disability, hospital indemnity, and accident and critical illness coverage, can be crucial gap-filling solutions. They help cover the costs of an unexpected health issue and protect income in the event of a disability.
But supplemental medical offerings are only the beginning. A diverse, four-generational workforce is clamoring for additional benefits, and voluntary benefits such as student loan repayment benefits, identity theft protection, discounted auto insurance coverage, and long-term care are becoming mainstream must-haves to solve a multitude of issues in the market today.
The mainstreaming of voluntary benefits is clearly underway. A 2016 report from Eastbridge Consulting Group showed that nearly 70 percent of employers are leveraging voluntary benefits as part of their overall benefits strategy. And younger employees overwhelmingly are looking for more benefits flexibility, including 70 percent of millennials and 59 percent of Generation X employees, according to a Mercer Inside Employeesâ Minds study.
This broader portfolio often carries an administrative burden because organizations typically need to rely on multiple partners to deliver a broader set of benefits. This can complicate things by wasting time that should be used to communicate the value of benefits offerings and deliver a solid enrollment and service experience. According to the National Survey of Employer Sponsored Health Plans, 65 percent of employers use four or more carriers for all of their voluntary benefits offerings. Yet 70 percent of employers would prefer to enroll core and voluntary benefits on one platform, while only 58 percent of firms with more than 500 employees have managed to do so.
Expanding the benefits offering doesnât have to be complicated. Finding a partner that streamlines the administration of the program, delivers effective communication strategies and simplifies the entire employee experience can help HR get the most out of the voluntary revolution.
The market demands nothing less.
Tim Weber is a partner in Mercerâs U.S. Health business.