As employee benefit advisors, it is our responsibility to remain vigilant and well-informed on behalf of our clients and their employees.  We should be aware of all regulatory, financial and product-centered changes in our industry, and communicate them in a timely manner.  But it's even more important that we actively listen to our clients if we want to maintain a truly consultative relationship within their organizations.  These five sentiments have already been expressed by decision-makers in 2019 regarding employee benefits:

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

For some time now, the increasing costs of health care and medical insurance have necessitated a passing of the buck from employers to their employees.  Employers are aware that providing a competitive medical plan is vital to attracting top talent to their organization.  However, they also know that doing so becomes a thorn in the side of their profitability.  The consensus among decision-makers is that they cannot continue to pass the almost inevitable annual increase in benefit costs to their employees.  The buck must stop here, they believe.

Some employers have committed to bearing the financial burden of future increases, so that their employees' per-paycheck costs remain 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 employed technical resources from their brokers or consultants to push back against the transactional renewal process.  They've implemented a fully or partially self-funded medical plan to rid themselves of state and ACA taxes.  Or they have contracted with a hospital system to initiate a reference-based pricing program.  Bottom line: Employers are no longer willing to jeopardize employee relations by increasing costs and/or decreasing their plan benefits.

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

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

For employers who want to increase HDHP-plan utilization, the key lies in stimulating employee interest in the HSA-component of these plans.  If a company is not contributing to the participating employees' accounts every year, it's no wonder participation is low.  People need an incentive to change.  The switch to a HDHP plan from a traditional PPO plan is evidence of that.  Frequent communication regarding the financial benefits of HSAs is vital, as well.  Are the employees aware that an HSA represents one of the most tax-advantaged saving vehicles in existence?  Well, they should be!  Information of that type must be consistently reinforced through various communication channels.

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

Once reserved for larger employer-groups, alternative self-funding products have emerged as a viable option for companies with fewer than 100 employees.  In the small group market, these alternative funding arrangements are often referred to as level-funded plans.  Major medical carriers have introduced level-funded plan portfolios in conjunction with their fully-insured options that cover groups with as little as five full-time employees.  These alternate funding products have enjoyed substantial adoption, because they limit the common disadvantages associated with self-funded arrangements.  For instance, the primary threat to a self-funded group is the increased claims exposure, where one large claim could realistically cause financial ruin for a small business.  Level-funded plans have removed this unpredictability through built-in stop loss coverage and by providing employers the option of equal monthly payments regardless of claims exposure.

The draw for applicable employers is palpable.  Level-funded products look and feel like their fully-insured counterparts from an administrative standpoint, but can result in premium savings of more than 20 percent in some cases.  Since 2013, the Affordable Care Act has utilized a community-rated dynamic in the small group market, which pools the risk from all insurers' small group books of business.  For younger and healthier employer groups, this raised the premium exposure by grouping their risk with an older population.  By employing a level-funded arrangement, small employers with healthier populations can now avoid this community rating.  In addition, they are eligible for premium credits at the end of the plan year.  The insurance carrier would simply reimburse the employer if the company overpaid, based on claims data.  Under this arrangement, small group employers take more direct control of their health spend.

4. “Yes, we have a telemedicine plan”

Telemedicine, like high deductible health plans, is no longer “news.”  Due to their undeniable value and convenience, telemedicine plans have exploded in popularity.  They should now be considered a common-place benefit offering.  Recently, major medical carriers like United Healthcare and Blue Cross Blue Shield have begun to build telemedicine into their fully-insured medical plan portfolios.  At first, the benefit 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 to telemedicine.

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

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

Employee benefits have expanded dramatically since the time when health insurance was the lone product offering.  It's not uncommon today for companies to offer 20 different benefits to their workforce.  These benefit additions are generally viewed as a positive development.  Decision-makers, however, are actively taking steps to maximize the value of their overall benefit programs.  Personalizing benefits on an individual employee basis has become an important trend in employer-sponsored coverage.  Two areas where this is especially true are mental and financial health.

Employers emphasize that increased access to emotional or mental health benefits is of the utmost importance for their workforces.  Employees consistently admit that the majority of their stress stems from their jobs and the compensation tied to their employment.  For that reason, employers have begun to implement personalized mental health initiatives such as employee assistance programs (EAP) that provide individuals with in-person or virtual access to one-on-one counseling.

Financial health has also jumped to the forefront of decision-makers' benefit objectives.  The most recent changes in this realm are geared toward the younger population.  These workers are further from their retirement years and less educated on retirement planning initiatives.  Benefits such as student loan repayment for employees with remaining student debt or tuition reimbursement for employees who decide to attend graduate school have become commonplace offerings to members of the millennial generation.

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