Top 2024 enrollment concerns – and how brokers can address them

Small and midsize businesses (SMBs) account for approximately 99.9% of companies in the United States. Yet despite their purchasing power, they’re often left out of national conversations on improving the health benefits landscape. Moreover, they’re tasked with figuring out how to provide competitive health benefits that support recruiting talent while helping their workforces maintain good health – all with the fewest resources. 

Benefits advisors can elevate these concerns and be problem-solvers for struggling SMBs at the open enrollment table this year. From the data and through conversations I’ve been having with both brokers and employers, the following are top concerns SMBs are expressing – and how brokers can help address them: 

Unstable rates 

One of the most prominent issues employers are facing is unstable rates. A recent Kaiser Family Foundation survey found that average family coverage premiums are up 20% over the past five years and up 43% during the past 10 years. As costs rise for all, one employee injury or complex pregnancy can wreak havoc on next year’s rates. This leaves employers feeling like they don’t have any control over their health insurance plans. That can be unsettling, since it’s often their second largest expense next to payroll. 

But today’s risk pool shouldn’t predicate whether or not employers have affordable rates in the years to come. Instead, advisors can identify benefits providers who take more sophisticated approaches to predicting risk. By leveraging the right data, machine learning and innovative models that don’t just look back at past claims history and trend it forward, benefits providers can price their offerings more accurately and sustainably. That means stronger rate caps and stable renewal rates to match.

Cost sharing burdens 

There’s also been an increase in cost-sharing burdens, while the value of health insurance remains stagnant for many. Average deductibles for plans offered by employers at small companies in 2022 was $2,543, while median annual salary sat at just $55,068 per year. Furthermore, a 2020 survey found that in a growing number of states, workers are at risk of spending 10% or more of their earnings on health insurance premiums and deductibles. Even with these sharp increases, employees continue to view their health insurance plans as a mere safety net for when they’re really sick, instead of an affordable way to prioritize better health for themselves and their families. In today’s highly competitive job market, this lack of perceived value creates a big problem for SMBs seeking to attract employees through strong benefits packages. 

There needs to be a renewed focus in the industry on reducing cost-sharing and covering the services people use most, like preventive care, labs, imaging, urgent care and more. When these services become truly accessible to individuals, it ultimately cuts down on high-cost claims for employers and allows everyone to feel like their health benefits are truly valuable. There also needs to be an increase in innovative payment options that  help individuals finance their health care expenses when they can’t afford their deductible or out-of-pocket costs. 

Lack of flexible options

Another obstacle in the way of many employers being able to offer quality benefits to all their employees? The lack of flexible options for today’s diverse workforce and economic uncertainties. Models like the individual coverage health reimbursement arrangement (ICHRA) and level-funding are gaining popularity because they offer creative ways for SMBs to provide quality benefits at sustainable rates and with measured risk. 

ICHRAs, for example, are an ideal choice for employers who want to contribute to employees’ health benefits with more flexibility – giving personalized coverage options through the individual market, in a way that’s still tax-advantaged for the employer. Level-funded plans are another funding model that allow for greater cost certainty for employers, while effectively managing risk. When employers have a good claims year, level-funding also lets them share in the savings. For some SMBs, true flexibility will often involve offering a hybrid of both of these options; or example, with full-time employees on a level-funded plan and seasonal and part-time workers being offered ICHRAs. The key is finding a benefits provider who is able to truly customize offerings to meet their needs and keep it as simple and straightforward as possible for all. 

This open enrollment season, we have an opportunity to listen to and connect SMBs to the changemakers in the health benefits space who are using novel funding mechanisms, innovative plan designs and other new approaches to create sustainable solutions that solve their biggest issues. 

Kevin Kickhaefer is the Chief Revenue Officer & President of Commercial Markets at Gravie, where he is responsible for steering Gravie’s incredible new business and retention growth trajectory as it continues to be one of the most innovative companies in the health benefits industry.