6 themes that will shape health benefits in 2022 and beyond

The pandemic has reshaped the employee benefits industry in some ways that have become obvious and other ways that will not be fully understood until the rest of 2022 and beyond. Several health care experts addressed these changes during “Employee Benefits Landscape: 2021 Recap, 2022 Forecasts,” a January 20 webinar sponsored by Alera Group.

”If there is one takeaway from this entire presentation, it is that we are moving toward a completely new standard of personalized benefits,” said Cheryl Matochik, managing director of Third Horizon Strategies, a Chicago-based advisory group. “It is going to take a while to have all of that shake out, but there has been less talk and more action over the last 18- to 24-month period.”

Matochik and other presenters discussed six key themes that are shaping employee benefits. Here they are:

Employer-employee social contract shift. Employee expectations have changed significantly during the pandemic.

“The old contract was that employees worked in exchange for a paycheck and health insurance,” she said. “That’s no longer valid given the new work environment we are in. The first reason is that the pandemic is requiring a culture of sharing, not controlling. Second is the hypercompetitive employment market. Third is that the increasingly diverse workforce we are seeing means different benefits have different values for different individuals.”

As benefits are tailored more narrowly, effective communication will become increasingly critical.

“Everybody comes from a different starting point,” said Sally Prather, executive vice president of the Alera Group. “The industry is not there yet. It is still a very fragmented process to put an employee benefits structure together and then make it easy for an employee to leverage that program and use it efficiently and effectively. We still have a ways to go.”

Her organization is addressing this challenge.

“We spent a lot of time last year making sure that traditional communications for every size of employer were accessible in a virtual environment because employees couldn’t come together to hear what was new in the benefits plan,” she said. “Even some employers who didn’t think that could work were converted.”

The nature of this changing social contract likely will come into focus in the near future. “Several slow-moving things are all happening at the same time, and they all are going to intersect in the next two to three years,” said David Smith, founder and CEO of Third Horizon Strategies. “When they do, we are going to have a much clearer picture of Medicare rates, commercial rates and cost-sharing, which gives us a clear picture of what it really costs to provide a unit of care.

“That’s going to coalesce at the same time that we see this renaissance of interoperability and the ability to extract clinical information around quality. It will be the first time in our country’s history that we can have a full, transparent view of the performance of our health care system. People who understand that and can translate it into value for stakeholders will be the winners as we close out the decade.”

Employer-facilitated vs. employer-managed. Employers are building for a culture of caring, not controlling, Matochik said. Prather agrees.

“There isn’t a one-size-fits-all in this industry,” she says. “Not every solution that emerges in the marketplace is right for every employer offering a group-sponsored plan.”

As a result, plan designs will become more personalized.

“Carriers are seeing the writing on the wall that there are more creative ways to design plans based on how far you want to go in allowing consumers to define their own benefits and how much you still control as the plan sponsor,” Matochik said. “Somewhere in between defined benefit and defined contribution there is a gray area of different ways to approach plan design.”

Disruption in the labor market. As remote work, hybrid arrangements and the great resignation continue, benefits will adapt to the changing needs of workers.

“We see this full steam ahead for having a marketplace for those who are not able to have access to an employer group health plan,” Prather said. “We see that as an opportunity for growth.”

Telehealth expansion. Although the use of telehealth has tapered off since its peak during the pandemic, it will have a lasting impact on health care delivery.

“The entire health care industry is in as precarious of a workforce position as it has been in in decades,” Smith said. “A lot of that is because of COVID and burnout, so I think we are going to be in the midst of a reset for workforce fundamentals in the industry. Telehealth is going to be a catalyst for more home health, but only if and when we see payment for services shift and home health workers be paid a wage for which they will work.”

Combating the mental health crisis. The pandemic exacerbated mental health challenges and is changing the way employers and providers respond to them.

“As we move forward, I think we will see a lot more intention about how we put together all of the well-being solutions,” Matochik said. “Primary care is undergoing reinvention and will need to include not just physical care but also the mental health care aspect as a gateway into health care.“

More-complex compliance challenges. Matochik succinctly summed up the outlook: “We have myriad compliance challenges ahead of us.”