3 trends driving employee benefits
Two years into the pandemic, companies and their benefits advisors can now see what employees are looking for from their benefits. To meet the demand for ancillary coverage, holistic health, and more digitization, they must adjust their benefits model.
This emphasis on more comprehensive and convenient health care opens the door for employers to structure their packages around the needs of workers today. Here are three trends brokers should be aware of that are driving this decision making.
1. The rise of ancillary coverage
In 2021, as the pandemic raged on, nearly half of all employees purchased at least one new benefit. And almost 40% of employees say their company doesn’t offer enough benefits and programs to support their wellbeing.
To address this, employers and their advisors have increasingly felt the push to add ancillary benefits that employees want in a remote-first environment. Fast-growing types of coverage include mental health, telehealth, absence management, and life insurance. In 2021, life insurance enrollment rates reached 37-year highs as the threat of lost production and hospitalizations increased amid COVID-19 surges.
This is evidence that employees are investing resources into their health and safety. Companies must do the same, but that’s easier said than done. Employers – especially those that are small and mid-sized – face three main hurdles.
The first one is cost; the smaller the company, the less likely they’re able to afford a slew of ancillary products.
The second is not knowing which plans to offer. Employers are challenged with options, plan designs, and value propositions. They most often leverage an employee benefits broker to help them navigate this complex world.
And even if an employer adds ancillary benefits, employees may not take advantage, whether because they don’t know the benefits exist, don’t know how to enroll, or just don’t understand them. These scenarios hurt an employer’s ability to provide benefits that attract and delight their workforce.
Related: 3 benefits trends to consider for a post-pandemic workforce
Rather than making assumptions about what might work best for a remote team, employers should seek input from their staff. In addition to saving money by offering only what people actually want, requesting feedback can also build trust and demonstrate that leadership cares about their employees’ wellness.
2. Employees’ desire for a holistic health model
According to the 2021 MetLife Employee Benefit Trends Study, more than 50% of workers say they’re worried about at least one component of their holistic wellbeing. Additionally, only around 40 percent of employees reported feeling good about their holistic health as the year progressed, with numbers trending down.
But what is holistic care? This model stands out due to the way it considers the whole person and their surroundings. It includes benefits like supplemental health plans, telehealth, and paid leave.
Holistic care factors in more than biannual dentist visits or annual checkups. It’s ongoing. This round-the-clock approach to health extends to treatment, which helps employees address root causes, not symptoms.
For example, let’s say an employee experiences burnout – which nearly 50% of Americans have reported feeling during the pandemic. A holistic approach might uncover a need for paid leave and better nutrition, whereas a non-comprehensive approach might suggest avoiding screens to prevent headaches.
Supplemental coverage enables this model of holistic care because it provides levels of coverage beyond the traditional health care policy.
This is especially relevant amid the pandemic. Employees want to feel safe, but 67% of them worry about health care costs as a result of gaps in coverage. This is why policies like accident, critical illness, and hospital indemnity have grown in popularity over the past two years.
Researching and offering these benefits communicates to employees that their wellbeing matters. This is crucial for reducing turnover, as nearly 20% of employees are likely to start a job search because of their company’s poor COVID-19 response.
3. Growing demand for convenient digital offerings
According to a 2021 Google Workspace survey, more than 75% of employees and executives believe hybrid work will be a fixture in their organizations for the coming years. Addressing the needs of a permanently hybrid workforce requires employers to invest in benefits for a remote world. One place to look is insurtech.
In 2016, the insurtech global market size was about $250M. By 2020, it had jumped to nearly $3B. This acceleration should continue, with an estimated CAGR of 48.8% from 2021 to 2028. In other words, digitization is evolving from a nice-to-have to a must-have.
One digital solution is remote patient monitoring (RPM). RPM uses medical technology, like blood pressure cuffs or heart rate monitors, to gather and wirelessly transmit patients’ vital signs to their PCP. The appeal of RPM is its ability to remotely provide a steady stream of data to doctors so policyholders can receive more personalized care.
Similarly, benefits companies are rolling out devices that monitor user behaviors, such as dental wellness programs based on a connected toothbrush that records daily dental hygiene. This type of plan rewards consistent preventive care habits with free refill heads, other oral care products like paste, and even gift cards and other prizes.
These digital solutions support a holistic approach to health while giving employees greater control over the cost and quality of their care.
Embrace the shift from office-centric to person-centric benefits
Two years into the pandemic, companies and their benefits advisors can now see what employees are looking for from their benefits. To meet the demand for ancillary coverage, holistic health, and more digitization, they must adjust their benefits model.
Hybrid work – and life – are here to stay. Your clients need to think about how they can deliver benefits to the individual, not the office. This helps companies get to the heart of what employees need to succeed, and helps promote a level of company-wide wellbeing that increases productivity.
Alex Frommeyer is CEO and founder at Beam Dental.