Today's landscape has the potential to empower consumers while radically changing the way we envision and leverage employee benefits. Government regulation, spiralling healthcare costs unattached to outcomes, big data, and a massive new generation joining the workforce are the four main factors driving the future of non-wage compensation. That future begins today. With careful consideration of these four factors, a new generation of healthy consumers is within reach. 

#1 Regulation and the ACA 

The passing of the Affordable Care Act (ACA) in 2010 already feels light years away in some respects. In the brief time since, millions of Americans have taken advantage of the new baselines that the ACA set for medical insurance carriers. These include eliminating pre-existing condition and lifetime maximum clauses, covering preventive services, providing more options for coverage, and helping us get the most from our premium dollars by requiring that insurance companies spend the majority of dollars collected on health-related expenditures, rather than overhead costs like administrative, marketing, or cushy employee and client retreats. 

Though the ACA is far from flawless or complete, even those politically opposed to the Act would have a hard time denying the fact that millions of Americans have gained more choice in insurance options through the creation of exchanges. More than 12.7 million are now covered on public exchanges while another eight million enjoy coverage under a private exchange. 

These numbers will continue to grow as innovative companies leverage the individual insurance market to offer additional choices to workers at better price points than they can obtain independently. This vastly expanded network means more Americans have the freedom to choose the price, insurance carrier and coverage level that best suits their needs. 

All of that said, the ACA has not significantly reduced health care costs, which remain onerous and excessive. The lack of meaningful change in cost since the implementation of the ACA is worthy of additional debate. For me, it's best highlighted in a recent Kaiser Family Foundation 2015 Employer Health Benefits Survey: 

Clearly, there's still work to be done on the ACA, but it's lasting baseline requirements have set a new foundation that's here to stay. 

#2  The disconnect between health care costs and quality 

Let's talk about the outrageous price tags for health care services in this country. It's no secret that our health care costs are the highest in the developed world. We spend $8,713 annually in health care for each US resident, ahead of the number two country (Switzerland) by a whopping 40 percent and over 2.5 times that of the average developed nation. Most shockingly — and counter to some of the rhetoric you might hear during this campaign season — we spend more in public health dollars per citizen than all other countries on the list except Norway and the Netherlands. In fact, our public health spending alone would cover the entire public and private health spend per capita for countries like Australia, Japan, Ireland, Finland, France and many more. 

Surely, we must have better health care, health technology and patient outcomes if we pay that much, you ask? Unfortunately, we don't. A study by the influential medical journal The BMJ highlights some our issues. It concluded that medical error is the third leading cause of death in the nation — responsible for 251,000 deaths per year. That's more than suicide (41,000), firearms (31,000) and motor vehicle deaths (31,000) combined. In my own research on the topic, I was astonished to discover that the highest rated hospital for safety in my home state of California achieved a paltry 69 out of 100 successful outcomes. Simply put, we overpay for care that is at best mediocre, often unsafe, and at worst deadly. 

The health care industry is in need of fundamental change and there's a real opportunity to disrupt the existing status quo. Increasing investment in smart people and companies trying to solve this cost/quality disconnect are evidenced where I live in Silicon Valley. Rock Health shows us that $8.8B (yes, that's billion) has been invested in digital health over the last two years alone. You can bet your bottom dollar that these investments will drive big changes to the system in the coming years, just as they have fostered and developed nascent technologies in other sectors. Investors, employers and consumers alike are seeking answers to gain positive health outcomes that are less costly, more efficient and ethically-driven. 

#3 Medicare claims data 

When CMS released Medicare claims data for the first time, it was a move of unprecedented transparency and a huge win for entrepreneurs and data scientists looking for a way to help solve the cost, value and quality dilemma. The data contains information on services and procedures provided by over 986,000 physicians and health care professionals. This offers us insight and comparisons of physicians, specialties, locations, types of medical services and procedures delivered, payment and submitted charges, and more. 

Why is this a game changer? In today's society, data is king. It is already sparking a tidal wave of innovation and transparency within health care and insurance. Tools, technologies, apps, quality metrics and accountability for doctors and medical facilities are fast on the way. 

#4 A new generation joins the workforce 

We've gone over three of the biggest things that will usher in a new era of benefits, but the single most influential factor is the changing workforce and the introduction of Millennials. Much has been written about Millennials, but regardless of anecdotes, we certainly cannot ignore the numbers. Ninety-two million strong, they outnumber all previous generations, including baby boomers. 

Goldman Sachs created a great infographic that dives into the details of this new workforce. Among the highlights for me are the trend towards delaying major life events, including marriage, buying a car, and becoming homeowners. Millennials tend to focus on access, rather than ownership (think Uber and AirBnB). Take note. Uniquely, they have less spending power compared to their parents, thanks in large part to massive student-debt — a staggering 43 percent of 25 year olds have student debt at a mean balance of over $20,900, according to the Federal Reserve. 

Another key takeaway for those of us in benefits is how this generation views health and wellness. Unlike prior generations, who typically focus on the absence of disease and illness when defining health, Millennials spotlight eating right, exercising and limiting or abstaining from smoking and alcohol consumption as their definition of health. 

The Goldman report defines another aspect that Millennials both expect and utilize, which is starting to have a huge impact on employee benefits: