When choosing which benefits to offer workers, the overarching objective for employers has long been to reduce cost. However, the need to be more competitive in the War for Talent by offering more desirable—and pricier—offerings is increasingly overriding expense reduction, according to the 2019 Lockton Benefits Survey.

For example, while giving workers the choice to enroll in richer health plans can raise costs, the vast majority (83 percent) of the survey respondents offer those within a wide selection of plans, and 76 percent include a traditional plan (PPO, HMO) option. Just 13 percent are offering full-replacement high-deductible plans, bending to the need to be competitive over reducing costs.

The finding is “no surprise” as employers struggle to find the right talent, considering that the country is essentially in a zero-unemployment rate environment—making it a job seekers' market, according to the report.

“Employers understand the role of their employee benefits in attracting and retaining talent, and nearly 96 percent of respondents know that they need to be competitive when it comes to talent acquisition,” the authors write.

Employers are also offering broader networks of providers over limiting access to high-quality providers in narrower networks, according to the report. Indeed, only 15 percent of the respondents are thinking about limiting access next year. Most (84 percent) are offering convenient access to doctors with telemedicine.

Employers are opting for cost reduction over competitiveness within their pharmacy benefits, with 58 percent of respondents participating in utilization management programs like prior authorization and step therapy, and 42 percent requiring specialty medicine only be obtained by a specialty pharmacy.

Other key findings include:

The majority of respondents (73 percent) offer disease management services, 58 percent offer chronic condition coaching and 50 percent offer a well-being program.
Roughly 50 percent of the respondents are expanding coverage to new eligibility groups like domestic partners, rather than limiting coverage through dependent eligibility audits (33 percent) or spousal carve-out for working spouses with coverage elsewhere (9 percent).
Next year, 57 percent plan to conduct dependent eligibility audits and 20 percent expect to implement spousal carve-outs.
More than half (58 percent) of the respondents offer traditional voluntary benefits like accident insurance, while only 11 percent offer caregiver support for childcare services.

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Instant Insights /

Employers expanding benefits offerings to stay competitive

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