There are marked differences in how top-tier employers and their peers manage employee benefits, according to Gallagher's Best-in-Class Benchmarking Analysis.

Gallagher benchmarked both midsize employers (100 to 999 employees) and large employers (1,000 and more employees), and found similarities between the best-in-class employers of both sectors.

Best-in-class employers are more likely than their peers to offer either one or two medical plan options to employees, for better plan management and to curb expenses.

Many self-insure their benefits, and while they assume greater financial risk by doing so, such employers have the ability to lower health care costs through better plan management and improved employee health and well-being. Self-insurers also have greater administrative control and lower taxes.

Best-in-class employers also have successfully lowered their pharmaceutical costs through a variety of tactics, including using a specialty pharmacy benefit manager (29 percent of top-tier, compared to 20 percent of their peers), and a pharmacy benefits carve-out from the health plan (21 percent vs. 13 percent).

Two other strategies for reducing health plan costs: surcharging for coverage of spouses who have a benefit option available elsewhere and employing reference-based pricing — capping the maximum amount covered for certain health care services or procedures, such as knee replacement surgeries, that vary widely in price without any having superior outcomes over others. Employees pay the difference in cost above the reference price.

“Best-in-class plan design and management tactics are more likely to curb the cost for employees, which can translate to a distinct competitive advantage,” the authors write. “And the employers that use them conserve resources they can redirect to employee healthcare support tools — for improved benefits access and decision-making that supports a better clinical experience.”

No wonder then, that 70 percent of the top-tier feel their employees are satisfied with the benefits they offer, compared to 59 percent of their peers, they write.

Best-in-class employers are also “intensely” focused on employee well-being, according to the report.

“More often than their peers, they recognize the link between promoting health and realizing healthier levels of employee engagement, job performance, job satisfaction — and ultimately retention,” the authors write. “In fact, over three-quarters rate promoting and improving health and wellbeing as a top organizational priority, compared to just under two-thirds of their peers.”

The top tier are more apt to financially incentivize workers for participating in wellness programs, and more often use health assessments and biometrics to measure the success of their programs.

Best-in-class employers also provide more programs to promote employee emotional wellbeing, including financial wellbeing and also social wellbeing.

“Employees of all generations — especially the younger set — also value opportunities to exercise their social conscience by connecting with the communities where they work,” the authors write. “Some popular programs for giving back include volunteering and charitable matching. And, employers can validate their commitment to community wellbeing with a clearly defined corporate social responsibility statement.”

The top tier also tend to take a multi-year approach to benefits planning, and also more often communicate the advantage of their offerings than their peers.

“Employers that excel at both controlling healthcare costs and managing HR share two core beliefs about holistic wellbeing — it's a top organizational priority, and it helps boost employees' health, work experience and productivity,” the authors write. “They understand how their investments link to improved attraction and retention, and consider becoming or remaining an employer of choice one of the top two reasons for this commitment.”

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