Top benefit trends of 2017

Published
  • December 06 2017, 7:48pm EST
Over the course of 2017, employers embraced self-funded benefit models and brokers shifted to performance-based compensation strategies, while data analytics and online enrollment tools improved plan offerings and engagement.

These trends and more were identified by experts within the benefits industry from companies and organizations such as the Society for Human Resource Management, Questige Consulting, Segal Consulting and Benefitfocus.

Overview

Over the course of 2017, employers embraced self-funded benefit models and brokers shifted to performance-based compensation strategies, while data analytics and online enrollment tools improved plan offerings and engagement.

These trends and more were identified by experts within the benefits industry from companies and organizations such as the Society for Human Resource Management, Questige Consulting, Segal Consulting and Benefitfocus.

Vendor specialization

Employers are seeking best-in-class vendor features that can supplement their benefit offerings. For example, BridgeHealth offers bundled rates for surgical procedures, TrestleTree specializes in medical behavior change, Accolade utilizes personalized decision-support and Rx Saving Solutions optimizes therapeutic choices for companies and their employees.

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Population health

Employers continue to offer well-being programs as a form of preventative care. David Johnson, vice president and senior consultant at Segal Consulting says leading companies are moving away from the "carrot and stick" model of encouraging employees to enroll in wellness programs. Instead focusing on chronic care management, health coaching and non-medical health drivers such as reducing disease burden across covered populations by helping participants improve financial, emotional and spiritual well-being.

Care delivery and reimbursement

To supplement health plans, advanced tech options such as telemedicine and mobile health apps have given employees ways to handle minor medical needs without having to visit a physician or hospital. More employers have also begun to offer onsite or nearsite care for the workplace, making primary care more accessible, convenient and cost effective.

Additionally, the shift to outcomes-based or referenced-based pricing is reducing provider reimbursements for below-target outcomes on hospital-acquired conditions and is leading providers to set fixed rates for particular operations.

Pharmacy management

Specialty carve-outs have become a popular choice among plan sponsors when it comes to prescription drug plans because of the growing concern that PBMs lack the ability to manage the rapid increase in specialty drug costs.

These carve-outs require more aggressive pricing arrangements to maximize value. Patients on specialty medications are receiving more comprehensive care management.

Enhanced formulary management allows plan sponsors to achieve greater savings than standard PBM formulary options, with a focus on lowering net cost of medications versus maximizing rebates.

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Consumer empowerment

Due to rising healthcare costs, there is a greater call among employers and employees for quality and cost transparency from providers. Optimal approaches rely on statistically-credible data from unbiased, nationally-recognized sources.

There has also been a push for more health advocacy among employers in order to assist employees in choosing the best healthcare options for their individual situations. Health concierges are helping participants navigate the complex healthcare environment. This provides high-touch service to eliminate waste for plans and participants, offers newer approaches to go beyond resolving claim issues and selecting providers to help participants achieve better health and lower cost.

Employers shifting to self-funded models

John Sbrocco, healthcare strategist at Questige Consulting, says self-funding is becoming a well-known option within the healthcare market for a wide range of plan sponsors.

Employers are looking at the self-funding option as more viable as major carriers begin offering more ASO products due to the loss of business from independent third-party administrators.

"Employers are seeking transparency on the price of their health plans," Sbrocco says. "They want to know where their money is going and how they can get that data in order to control the cost on their plans."

Performance-based compensation

Not only are employers seeking performance-based pricing from the carriers, but they also want to know the advice they are receiving from their adviser is benefiting their business and their employees.

Because of this need for accurate information, brokers are moving to performance-based compensation models, where they only receive payment if the advice given to clients produces a profitable return.

"Because of the increased pressure on many employers' budgets due to the rising healthcare costs every year, there is just no more room to pick up the cost from either the employer or employee side," Sbrocco says. "They have to make changes and those come from the solutions we [advisers] put in place to dramatically reduce their claims expense."

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Financial well-being

"Employers are seeing the value and positive ROI of financial wellness for their businesses," says David Stedman, CEO at BrightDime. "As companies see the effects of financial stress on workforce productivity, absenteeism and engagement, employers are thinking more holistically about 'total benefit.'"

As a result, wellness consultants are offering education and coaching as a financial wellness benefit alongside traditional healthcare benefits to support each employee's individual situation and help them make decisions to achieve goals such as ending student debt, paying off loans, saving for retirement or buying a house.

Data analysis

Rob Piazza, product manager at Benefitfocus, began to see the advent of data analysis from HR professionals over the course of 2017.

"More employers are starting to use data to make better informed, strategic decisions when it comes to benefits, healthcare offerings, recruitment and retention," Piazza says. "By examining data, HR professionals and company leaders can see which benefits are being utilized, which ones may need more education to make employees aware of it or which ones should be discounted."

Piazza is also seeing more employers take on the role of the insurer. In order for them to contain healthcare costs effectively, they will also need to take a data-driven approach to manage the health of their employee populations.

More benefits

Nearly one-third of organizations increased their overall benefit offerings in the last 12 months, with health and wellness categories being the most likely areas to experience growth, according to SHRM's 2017 Employee Benefits: Remaining Competitive in a Challenging Talent Marketplace survey.

The top reason for increasing benefits was to remain competitive in the talent marketplace. Given that two-thirds of organizations were experiencing recruiting difficulty and skills shortages for certain types of jobs in 2016, organizations needed to focus on providing a competitive benefits package to retain and attract top talent.