Today's Biggest Challenges for Health Benefits
These days, managing a health benefits program means managing change. Healthcare benefits must serve the evolving needs of employees and their families, support the organization’s short- and long-term objectives, and adapt to the rapid-fire change – even paradigm shifts — occurring in the healthcare market and in healthcare policy.
HEALTHCARE IN FLUX
- Health plan consolidation and vertical integration of health-related entities continue. In many
marketsthis has reduced choice and raised cost. It may also offer some advantages.
- New entrants into the market create uncertainty, along with new opportunities to explore.
- Washington’s focus on undoing the ACA continues. The new tax law repealed the individual mandate penalty, which is likely to mean more uninsured and more cost-shifting to employer plans from uncompensated care.
- While the excise tax effective date was delayed in a later bill, it remains in place, making long-term strategic planning more difficult for employers.
WAR FOR TALENT
Against this challenging backdrop, employers must not only continue to manage cost, but to offer more attractive benefits. With the economy booming, there’s a war for talent on. Unemployment fell to just 4.1% at the end of 2017 — below the full employment level of about 5%. Growing competition for talent means benefits must support attraction and retention – and health coverage is the benefit that matters most to the most employees. In fact, Mercer’s Inside Employees’ Minds survey found that about two-thirds of employees say health benefits are as important as pay in deciding where to work.
EMPLOYEES ARE UNDER FINANCIAL STRESS
Despite low unemployment, US wage growth has remained stagnant and many employees lack savings. A survey by the Federal Reserve Board found that 44% of Americans could not cover an emergency expense of $400 or more. That has important implications for healthcare benefit design. EBRI’s most recent survey of workers with access to employer coverage found that only 30 percent are confident that they are able to afford health care without financial hardship. Given that money problems are the leading cause of stress -- and that stress takes a toll on employee health, well-being and productivity –employers must question strategies that involve shifting more