As employee benefit advisors, itis our responsibility to remain vigilant and well-informed onbehalf of our clients and their employees.  We should beaware of all regulatory, financial and product-centered changes inour industry, and communicate them in a timely manner. But it's even more important that we actively listen to our clientsif we want to maintain a truly consultative relationship withintheir organizations.  These five sentiments have alreadybeen expressed by decision-makers in 2019 regarding employeebenefits:

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1. “It's still too expensive, but we can't just keeppassing the increases on to our employees.”

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For some time now, the increasing costs of health care andmedical insurance have necessitated a passing of the buck fromemployers to their employees.  Employers are aware thatproviding a competitive medical plan is vital to attracting toptalent to their organization.  However, they also knowthat doing so becomes a thorn in the side of theirprofitability.  The consensus among decision-makers isthat they cannot continue to pass the almost inevitable annualincrease in benefit costs to their employees.  The buckmust stop here, they believe.

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Some employers have committed to bearing the financial burden offuture increases, so that their employees' per-paycheck costsremain flat.  It will negatively affect their bottom-line,but they won't risk losing a valuable member of the team. Other employers, unwilling to accept the status-quo, have employedtechnical resources from their brokers or consultants to push backagainst the transactional renewal process.  They'veimplemented a fully or partially self-funded medical plan to ridthemselves of state and ACA taxes.  Or they havecontracted with a hospital system to initiate a reference-basedpricing program.  Bottom line: Employers are no longerwilling to jeopardize employee relations by increasing costs and/ordecreasing their plan benefits.

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2. “We've had a high deductible health plan for years,but the take-up rate is still low.”

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High deductible health plans (HDHP) offered in conjunction withhealth savings accounts (HSAs) are no longer a newdevelopment.  In 2018, over 70 percent of largeemployer-sponsored medical plans nationwide offered them. However, many employers are saying that their employees are veryslow to adopt these plans.  The obvious reasons are thegreater financial exposure associated with high deductibles and thelack of first dollar coverage in the form of copays. Employees are not excited about paying the entire bill when they goto see their doctor for a common cold.  Can you blamethem?

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For employers who want to increase HDHP-plan utilization, thekey lies in stimulating employee interest in the HSA-component ofthese plans.  If a company is not contributing to theparticipating employees' accounts every year, it's no wonderparticipation is low.  People need an incentive tochange.  The switch to a HDHP plan from a traditional PPOplan is evidence of that.  Frequent communicationregarding the financial benefits of HSAs is vital, aswell.  Are the employees aware that an HSA represents oneof the most tax-advantaged saving vehicles in existence? Well, they should be!  Information of that type must beconsistently reinforced through various communication channels.

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3. “We have less than 100 employees and have started tolook at alternative funding solutions.”

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Once reserved for larger employer-groups, alternativeself-funding products have emerged as a viable option for companieswith fewer than 100 employees.  In the small group market,these alternative funding arrangements are often referred to aslevel-funded plans.  Major medical carriers haveintroduced level-funded plan portfolios in conjunction with theirfully-insured options that cover groups with as little as fivefull-time employees.  These alternate funding productshave enjoyed substantial adoption, because they limit the commondisadvantages associated with self-funded arrangements. For instance, the primary threat to a self-funded group is theincreased claims exposure, where one large claim couldrealistically cause financial ruin for a small business. Level-funded plans have removed this unpredictability throughbuilt-in stop loss coverage and by providing employers the optionof equal monthly payments regardless of claims exposure.

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The draw for applicable employers is palpable. Level-funded products look and feel like their fully-insuredcounterparts from an administrative standpoint, but can result inpremium savings of more than 20 percent in some cases. Since 2013, the Affordable Care Act has utilized a community-rateddynamic in the small group market, which pools the risk from allinsurers' small group books of business.  For younger andhealthier employer groups, this raised the premium exposure bygrouping their risk with an older population.  Byemploying a level-funded arrangement, small employers withhealthier populations can now avoid this community rating. In addition, they are eligible for premium credits at theend of the plan year.  The insurance carrier would simplyreimburse the employer if the company overpaid, based on claimsdata.  Under this arrangement, small group employers takemore direct control of their health spend.

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4. “Yes, we have a telemedicine plan”

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Telemedicine, like high deductible health plans, is no longer“news.”  Due to their undeniable value and convenience,telemedicine plans have exploded in popularity.  Theyshould now be considered a common-place benefit offering. Recently, major medical carriers like United Healthcare and BlueCross Blue Shield have begun to build telemedicine into theirfully-insured medical plan portfolios.  At first, thebenefit was offered exclusively on a standalone basis. Now,however, if an employer has a fully-insured medical plan in place,chances are the company's employees have access totelemedicine.

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This distinction is an important one — and one that employersshould understand clearly.  Tele-med plans offered as partof a major medical plan are typically associated with a $10-$20copay per utilization.  Standalone plans most commonly usea per employee per month (PEPM) fee that remains level regardlessof utilization.  This may not seem to be a significantfinancial disparity, but it definitely makes a difference toemployees — particularly employees enrolled in full family coveragewith high levels of utilization.

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5. “We're personalizing our benefit offerings aroundemotional and financial health”

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Employee benefits have expanded dramatically since the time whenhealth insurance was the lone product offering.  It's notuncommon today for companies to offer 20 different benefits totheir workforce.  These benefit additions are generallyviewed as a positive development.  Decision-makers,however, are actively taking steps to maximize the value of theiroverall benefit programs.  Personalizing benefits on anindividual employee basis has become an important trend inemployer-sponsored coverage.  Two areas where this isespecially true are mental and financial health.

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Employers emphasize that increased access to emotional or mentalhealth benefits is of the utmost importance for theirworkforces.  Employees consistently admit that themajority of their stress stems from their jobs and the compensationtied to their employment.  For that reason, employers havebegun to implement personalized mental health initiatives such asemployee assistance programs (EAP) that provide individuals within-person or virtual access to one-on-one counseling.

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Financial health has also jumped to the forefront ofdecision-makers' benefit objectives.  The most recentchanges in this realm are geared toward the youngerpopulation.  These workers are further from theirretirement years and less educated on retirement planninginitiatives.  Benefits such as student loan repayment foremployees with remaining student debt or tuition reimbursement foremployees who decide to attend graduate school have becomecommonplace offerings to members of the millennial generation.

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Sam joined USI in 2018 with over five years of experience inthe employee benefits field. He began his career with a Fortune 500insurance carrier before transitioning to a role in benefitsconsulting. Throughout his career, Sam has worked with numerousmid-market clients across the United States. Sam was recently namedone of 30 Life & Health Advisors Under 30 shaping the future ofEmployee Benefits.

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