Along with traditional wellness plans that focus on health-related issues, Ashley is seeing more employers turn to financial wellness plans. In many cases, employers are finding the stress of employees’ uncertain financial lifestyles is leading to some of the same adverse consequences that come with poor health.
“Employees are so stressed out financially that if an employer is going to invest dollars in overall wellness—the whole person wellness—it is going to focus on financial wellness because employees first have to reach a stable place financially,” Ashley says. “They need the tools and resources to become financially secure, so they don’t have the stress in their lives and can concentrate on other wellness issues that lead to positive productivity, such as good nutrition and working out.”
Measuring a wellness program’s return on investment can be difficult, but it’s an important step if an employer wants to get the most out of a program, Ashley adds. To determine return on investment, an employer can compare health plan costs from when the wellness plan was implemented, measure absenteeism rates and examine productivity levels. Typically, it takes two to four years before an employer can realize the wellness program’s true savings.
“It isn’t a flash in the pan,” Ashley says. “We don’t pay for wellness, and then, all of a sudden, our rates go down six months later. That simply doesn’t happen, but if an employer can have a multiyear look at the ROI, it’s an investment over time.”
Retirement funds also remain an important benefit as 72 of respondents offer retirement benefits, and although the recession has been difficult for many companies, only 36 percent of respondents have reduced their matching incentives for defined-contribution plans since the economic downturn.
Many employers are avoiding cutting back on matching incentives in an effort to encourage employee participation, says Robyn Credico, defined contribution practice leader at Towers Watson, a global professional services company in New York City. As employees continue to delay retirement, they need more helping becoming financially secure, and offering retirement matching is a relatively low-cost method of doing so.
Still, even though most respondents did not reduce retirement matching, the economy could be impacting this offering. Of the respondents that cut retirement matching, only 28 percent have been in the position to reinstate the benefit. Many employers may have avoided reducing retirement matching, but the majority of those that had to eliminate it are not ready to support retirement plans in the way they once did.
In regard to the broker role, the survey finds that it continues to play an important part of the benefits process as most respondents (81 percent) rely on brokers. Of those, 87 percent use brokers who are commission based, and 13 percent use brokers who are fee based.
When it comes to enrollment, respondents are split on how their brokers participate. For 40 percent of respondents, brokers conduct the benefits enrollment process, and 39 percent of respondents say their brokers at least help conduct the enrollment process. Only 21 percent of respondents say their brokers do not participate in enrollment.
Moving forward, Ashley expects to see the broker role evolve into one that focuses more on consulting. While most employers, at 51 percent, plan on spending the same amount of time on benefits as the previous year, another 42 percent say they anticipate spending more time on benefits in 2012. Considering the complicated environment of health care reform and the financial stakes that are involved, employers are looking for brokers who can offer more than a product sales pitch. Rather, employers need their brokers to act as partners in developing strategic solutions, implementing benefit designs and measuring analytics.
“If you were to drill down deeper in that 81 percent data of those relying on brokers, you might find a lot of these people are working with consultants and not traditional brokers because, fortunately or unfortunately, the day and age of traditional insurance product broker is probably going to go away and what’s going to emerge are multidisciplinary firms who can deliver value to their clients,” Ashley says. “It’s not just about the product; it’s about strategy.”
Illustration by Mitch Blunt