4 ways to adapt small group benefits for the modern workforce

The modern workforce presents several challenges to companies looking to attract and retain talent. Workers of all ages have been more likely to leave their companies in recent years. Younger workers – especially those entering the workforce for the first time – bring changing attitudes toward employers because they’re used to having everything on demand. In addition, companies increasingly provide hybrid workplaces, making it harder to manage workers across the country.

The good news is that almost every organization is facing the same issues, providing enterprising firms with a huge opportunity to make themselves more attractive to a discerning workforce. Employers need every possible asset to attract desirable employees and, just as important, retain high-performing employees. Providing a wider range of benefits is a great way to encourage talent.

Savvy employers can offer several benefits that competitors may not be aware of. But offering those benefits is only one part of the strategy – the employer also needs to educate their employees on how best to use them.

Migrate to Exclusive Provider Organizations (EPOs). The rise of hybrid working means fewer companies have all employees living in the same population centers. Companies are grappling with the specific problem of how to address a multistate workforce. For example, Health Maintenance Organizations (HMOs) will not be a good option for companies that have employees working remotely across the nation. More companies are now considering EPOs, which provide a national network like PPOs and where members only receive benefits if using in-network providers, like HMOs. Eliminating out-of-network coverage reduces premiums and keeps it simple. While it’s understandable that people grow fond of certain doctors and consider staying with them even if they move out of the network, the reality of the modern health care system is that it’s much better to stay in-network. Eliminating out-of-network benefits may seem shocking to some, but going out-of-network was never a good idea to begin with unless it was due to a life-threatening emergency. Companies need to educate their employees that going out-of-network is overly expensive even with federal and state surprise billing laws.

With EPOs, employers can meet the needs of employees living and working in other states and keep an eye on the bottom line too.

Provide HSA education: Health savings accounts (HSAs) began growing in popularity in after the Affordable Care Act (ACA) was launched. HSAs provide employees with money on a pre-tax basis they can use to pay for qualified medical expenses. This helps employees reduce their tax burdens while saving up money for potential planned and unplanned medical expenses. Companies are increasingly offering HSA qualified health plans because they’re the least expensive plan. Employees are choosing them because of the low floor price – but the trade-off is a high deductible. It’s important for HR leads to understand which plans their employees are choosing and why. The lowest-cost plan can quickly become the most expensive plan without proper planning. Organizations that offer an HSA need to educate employees to view it as a bank account – and they should consider offering matching funding, which further encourages employees to contribute and take ownership of their health care dollars.

Offer supplemental plans and voluntary benefits: Given that many employees opt for the cheapest plans, they risk huge financial expenses if they get injured or face serious medical conditions. It’s a great idea for companies to offer supplemental plans like hospital indemnity and accident insurance to help protect their employees who encounter unexpected expenses. A McKinsey study found employers believe the importance of offering hospital indemnity has increased 41% over the past five years.

Small employers who find it too expensive to offer traditional group major medical plans can still provide these important benefits to their employees. Individuals and families who have coverage through a state or federal marketplace while likely have high deductibles and even higher out of pocket maximums, making these supplemental and voluntary benefit plans even more crucial to offer. Companies that also pay for these budget-friendly benefits generate enormous goodwill for just a few dollars per month per employee. Supplemental plans provide powerful protection for members of your workforce who may be struggling to get by.

Embrace the newest option – lifestyle spending account (LSA): Similar to a flexible spending account (FSA) – where employers or employees fund an account to make health-related purchases – an LSA can fund a variety of everyday, unique or professional development expenses. Everything from gym memberships, return to office incentives, or even a way for the company to contribute to the down payment if an employee is a first-time home buyer. Both employees and employers can contribute the accounts, but the employer determines the plan design for things like expense categories. From a return-on-investment perspective, employers can structure their LSAs to provide funds to attend conferences and take advantage of personal growth opportunities which employees may think are out of reach for them. The company benefits by building the skillsets of their employees, and employees can get some free professional development. An added bonus for companies is identifying which employees have leadership potential based on who takes the initiative to use the professional development benefits. Considering LSAs are funded post-tax, which eliminates a tax benefit for employees, it may make sense for employers to fund it completely as a perk.

Related: HSA like option for employees in high demand, study finds

The right path is offering more benefits and communicating them loudly

While offering these plans creates a direct through-line to recruitment, there’s also a big retention play too. Employers who contribute to these plans, especially savings accounts, can offer different tiers based on the employee’s tenure at the company. It’s a great way to keep your talent happy, retain your best workers, and become a more attractive business to future employees.

Ultimately, offering a wider range of benefits demonstrates to employees that the organization cares about their needs and understands that each employee may have different needs. Some of the benefits mentioned above require employers to make a decision: either fully fund the benefit, contribute to it partially, or offer it where employees make the contributions themselves. Organizations should strongly consider funding some – if not all – of these benefits, an investment which can more than pay off by making recruitment easier and retention more successful.

Sandy Kenslow is the Vice President and Director of Small Group Benefits at Mylo.