The evolution of employee benefits programs has had a decisive impact on employers and insurance carriers, and some clear trends are emerging. One relates to the arrival of public exchanges and guaranteed issue; employers have the option of transitioning their dependent coverage strategy, as those dependents can now find coverage on the exchanges. In fact, analysis of data from our bswift client base quantifies the decline in the percentage of employee plus family premiums paid for by employers. They are likely to maintain their funding rates for employee only coverage, while reevaluating the employee equity and recruiting tradeoffs of subsidizing dependent health coverage.
Another trend revealing a shift in thinking about benefits programs is that some employers approximately 14% according to bswift research are considering a defined contribution funding approach as part of their benefits strategies. There are clear advantages to this system: With persistently high health care costs, defined contribution gives CFOs the ability to budget benefits well into the future, and for those involved in benefits administration, it provides a relatively straightforward solution. Defined contribution for health and welfare benefits has received a lot of attention from brokers but, as with most innovations, has been implemented by only a small number of early adopter employers.
