Preparing for open enrollment: Generational tipping point shaping adviser strategies

• Key Insight: Discover how hyper-personalized benefits and AI can increase relevance and usage during open enrollment.
• What's at Stake: Rising pharmacy and medical costs risk eroding retention, productivity and plan affordability.
• Expert Quote: Advisers must enable hyper-personalization to reach multigenerational workforces, says Chris Morbelli, EY.
• Source: Bullets generated by AI with editorial review

Part two in a on-going series about what advisers need to know for this year's open enrollment. Read part 1 here.

On the precipice of another open enrollment season, there's no denying the importance of employee benefits for driving a competitive advantage. 

Benefits remain core to the employee value proposition, despite their rising price tag. While preparing for higher medical costs is still top of mind, as many as 65% of employers across various sizes, industries and regions responding to the latest EY-LIMRA workforce benefits survey plan to expand benefit offerings in the future. This was particularly true for midsize and large employers, and that figure is up 7% since 2023.

Chris Morbelli, EY's life and group insurance transformation leader, credits two main drivers: A strong commitment to employee well-being and retention, as well as serving one of the most diverse workforces in U.S. history with five generations working side by side. 

"We're in a generational tipping point where for the first time ever there are more Gen Z and Millennials than there are GenX and Boomers," he notes. 

Read more: How this EAP achieves a 30% engagement rate for mental health support

Given the complexity of generational shifts taking place, Morbelli stresses the importance of advisers helping employers become much more focused on hyper-personalization for the upcoming open enrollment. 

"We want to drive more relevancy and usage," he adds, noting that brokers, employers and employees believe AI could play a key role in creating hyper-personalized experiences. 

Lulled into complacency

While there will continue to be significant differences in benefit needs and preferences in an increasingly diverse workforce, some common denominators have emerged. For example, people of all ages and backgrounds have struggled through more than two decades of a healthcare consumerism movement with inadequate educational support and advocacy to navigate the complexity of care.

The seminal problem in American healthcare is that traditional health insurance has rendered the cost of care unaffordable, opines Alan Cohen, co-founder of Centivo, a health plan built for self-funded employers. "We've been lulled into complacency since the high-deductible health plan rage," he says. 

During this time, costs were dramatically shifted to employees, many of whom he notes became functionally uninsured in the face of $6,000-plus annual deductibles and $12,000 out-of-pocket maximums. 

It didn't help that scores of working Americans have salted away just $500 in savings and $1,000 in checking accounts, he adds. The result is that this economic reality reduces both unnecessary but also necessary care, compromising employee health and wellness, eroding morale and decimating productivity. 

"The dream from a decade ago was that by this time everyone's going to have $50,000 to $100,000 in their HSAs," he recalls. "How many people do you know who have that kind of money in their HSA? Zero. People have been using their HSAs like FSAs. Why? Because they can't afford to put money in their HSA because of all the other expenses that they have."

Read more: When is wellness an HSA-reimbursable medical expense?

Continuing to cost shift under these circumstances is no longer possible, he explains. His solution: building high-performing networks around accountable care organizations, clinically integrated providers and value-based contracting, and making primary care the centerpiece for organizing the healthcare ecosystem.

As with recent years, much of the focus during the upcoming open enrollment season will be on steps to improve pharmacy benefits management, which has been closely scrutinized. For nearly 30 years, RxBenefits Chief Pharmacy Officer Mark Campbell, PharmD, has witnessed a continuous conundrum for employers struggling to manage their health plan costs in the face of rising demand for expensive therapies that still ensures member access to care. 

"Over the course of time, there's always an expansion in prescription costs and potential challenges that threaten how you're going to budget for that for the coming year," he says. Noting how GLP-1s now dominate the conversation about what the following year will look like, he sees a significant label expansion associated with this emerging area as it pertains to treating sleep apnea, non-alcoholic steatohepatitis known as NASH and other approved indications. All of those breakthroughs, of course, will come at a high cost.

His suite of clinical management programs puts independent clinicians at the center of medication management, ensuring that members receive the safest, most appropriate and cost-effective treatments. "This eliminates wasteful spend and protecting both member health and employer plans," he says.