It’s time for your checkup: Assessing your health and welfare plan
How well are you keeping up with trends, policy updates and employee expectations in the benefits space?
With open enrollment right around the corner, it’s the perfect time for businesses to conduct a checkup on their health and welfare plans.
Employees are expecting more from their benefits than ever before. Keeping up with trends, flagging ever-changing policy updates and going above and beyond offering traditional health and welfare plans are a necessity in today’s workforce climate. To remain competitive, employers must regularly evaluate their benefits plans and what’s impacting them.
Workforce climate trends & changes
Leaning into big data, organizations are using analytics to target and personalize preferences and benefits. Going beyond demographics, they are identifying employee lifestyle patterns and tailoring benefits, for example, to suit their personal preferences and needs.
Related: 5 technology and data trends affecting employee benefits
Companies are also embracing financial wellness, which today’s workers are increasingly seeking, by investing in new products and services centered around education, counseling and loans. Beyond finance, wellness programs related to health—such as step-count challenges, healthy eating campaigns and mindfulness series—are top of mind. Now is a good time to consider offering more forward-thinking health and welfare plans and programs that support work-life integration.
In addition to evaluating health and welfare plans, it’s important to keep track of new benefits guidelines. The new Health Reimbursement Account (HRA) guidelines, which will go into effect on January 1, 2020, will expand employer options, especially for small businesses looking for alternatives to group health insurance. Now, employees can receive two additional types of HRAs: individual coverage and excepted benefit HRAs. Individual coverage HRAs permit eligible employees to purchase individual market coverage in lieu of traditional group health plan offering. Excepted benefit HRAs permit an employer to establish a new type of excepted benefit HRA that allows employees to receive reimbursement excepted benefits (such as vision and dental) and short-term coverage.
In addition to the HRA guidelines, businesses may expect wellness regulation, especially around health-contingent programs, which reward individuals for health-related standards. Because these programs require employees to demonstrate activity based on performance or outcomes, they are subject to non-discriminatory standards and privacy rules, which must be followed by employers to meet compliance. Recently, amendments have been proposed to change the way these benefits are measured and thus companies must follow these changes in an effort not to inadvertently violate them based on new rulings.
Voluntary benefits breakdown
A 2013 survey of employee benefits professionals at midsize and large businesses, conducted by consultancy Towers Watson, showed that employers strongly believe voluntary benefits will become more important to their total rewards strategy over the next five years. Now, in 2019, it seems like the trend has stuck. Many employees say they are more likely to stay with their current employer primarily due to the voluntary benefits package offered.
Voluntary benefits have become more mainstream and can add an extra edge to a company’s hiring strategies. However, these options often fall through the cracks—especially during open enrollment. It’s important that organizations be strategic and thoughtful when selecting the products to offer and ensure they add value. Other steps to take around voluntary benefits include:
- Tailor to an employee needs, backed by data
- Provide easy access and integrate with core benefits
- Allow for personal preferences and customization
- Provide decision support tools
- Communicate and educate employees
Shifting benefits back from burden to asset
Attracting and retaining a talented, committed workforce is critical for employers, so we are seeing a shift in benefits from being a burden to an asset. When an employer’s benefits programs meet the needs of employees, the company enjoys a significant competitive advantage—among other things. Employers can connect their benefits to their current company culture while using them to help shape a new culture they’re trying to create.
Personalizing benefits for today’s multi-generational workforce is also imperative, as well as centralizing and simplifying the buying experience—including making it mobile. Employers should renew focus on communication and education, shifting the mindset of benefits being an administrative task to packaging and marketing these plans as a comprehensive compensation package.
Best practices and next steps
When evaluating benefits programs, there are a few important things for organizations to consider to ensure their health and wellness plans keep them competitive and stand out among competitors:
- Understand the requirements and what benefits are mandatory.
- Focus on your workforce profile (demographics, locations, attitudes, preferences, etc.).
- Develop and activate against a benefits strategy that addresses goals and objectives, while laddering up to a bigger company mission.
- Consider your administrative practices, from policies to tools.
- Create a checklist of the major items to keep in mind year to year, including general updates (i.e., eligibility, name changes, etc.), establishing a communication plan for notifying employees/participants of the annual enrollment period.
Most important is finding the best platforms or third-party resources to ensure companies are adhering to compliance obligations.
Evolving benefits are the future, and employees will continue to expect more. By assessing benefits programs annually, companies will remain on the forefront of changing cultural trends, new guidelines and compliance challenges. Benefits should not be an afterthought but rather an important component of every HCM program. They are essential in creating a happy, dedicated workforce; and in today’s evolving world of work, companies can strategically leverage employee benefits as a recruitment and retention tool—a true win-win for employers and employees.
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