Years ago, when I was working as a benefits broker, I met a lot of employers that saw it as their duty to provide “good” benefits to their employees at an affordable cost. That paternalistic mentality put a lot of companies in a tight squeeze as renewals continued to work their way up year after year. In 2014, we were seeing some renewals as high as 40% over current – a stark contrast to the single-digit increases that were common a decade ago.
Fast forward a few years, and we’ve seen premiums increase as much as 40% in the small group (under 50 lives) and individual markets. Employers have gotten more creative with the benefits they offer, which include more high deductible health plans (HDHP) across all employer groups. But one of the things that we have learned from the federal and state exchanges is that there is no such thing as a “one size fits all” approach to healthcare.
We’re living in a new healthcare world
Individuals that are purchasing coverage for themselves on the public exchange choose a wide variety of plans. As healthcare companies grappled with designing plans that fit into the metallic levels, shoppers began to see deductibles that reached into the $5,000-$6,000 mark. And, as these (very) high deductible plans have been introduced to more individuals and small business plans, consumers have grown accustomed to these wide-ranging options. A $6,000 option is no longer shocking to a buyer, rather it’s something they’ve grown accustomed to being offered.
What does this mean for your employees?
Simply put, it means that you (the employer/HR) do NOT always know what is best for your employee. Each employee has a different family situation; a different financial situation; and a different health situation. Therefore, each person is going to value their benefits in a way that’s meaningful to them and their situation. When given the choice to choose benefits for themselves, employees are choosing differently than employers. In other words, they have come to expect a wide range of options as the norm.
What does this mean for you?
A private exchange or benefits marketplace technology provides employers with the opportunity to offer a wide range of medical and ancillary coverage options (while making the admin portion for your HR teams much easier). This allows employees to customize their benefits packages to fit their needs while still receiving an employer contribution to offset their costs. Viewing employees as individuals and allowing them to tailor their benefits packages to their unique personal situation only increases employee retention and satisfaction.
In this new benefits world, employees are becoming sophisticated shoppers of healthcare, accustomed to being offered a varied menu of options rather than just one plan. It’s important for employers to recognize this and understand that employee benefits will continue to be an influential aspect of the employee work-life, if and only if they are appropriately meeting the employee’s needs.
New blogger and Account Manager for ConnectedHealth Amy Christofis oversees several client projects for the group version of our flagship platform. Her goal is to make sure each assignment runs effectively and in a timely manner. Previously, Amy worked as a healthcare broker/consultant for eight years. During her spare time, you can find her perfecting her golf swing (even in the Chicago winters!). You can follow Amy here.