Emerging Trends that Matter
Changing demographics are driving change in your workforce and will continue to put pressure on your group benefits plan – its cost, plan design, effectiveness and perceived value. As baby boomers age, claims for prescription drugs and health and dental care are rising and with this growth in demand comes new and more expensive treatments to meet their needs. At the same time, children of these boomers, the 20-something “generation Y” are becoming an increasing influential presence. With different needs and expectations of work, the younger generation is spearheading a growing demand for alternative therapies and wellness programs.
Reviewing your benefits plans regularly can help ensure it maintains its value – and its affordability. By understanding the trends that can impact group benefits plans, you gain the context you need for an effective review. Sun Life Financial recently released an article highlighting the five important trends that will increasingly shape the benefits world.
Trend 1 – Focus on containing costs
With prescription drugs being the largest group plan expense, it is a key concern for most plans. Many employers have taken basic steps to manage prescription drug costs but fall short of any real mitigation of the cost pressures that the coming years will bring. Some new plan design features that can meet this challenge include:
- Mandatory generic substitution
- Prior authorization
- Evidence-based formularies
- Tighter controls to prevent fraud
Trend 2 – Mental Health
Mental illness is a significant threat to employers in terms of loss of productivity, absenteeism, disability and medical costs. Employers who provide a touch point for employees each work day are ideally positioned to provide programs that can greatly reduce this impact. A strategic approach is needed to maximize existing resources; here are 4 steps employers can take to better address mental health problems in the workplace:
- Improve mental health literacy
- Put existing programs under one umbrella
- Program expansion
- Disability management
Trend 3 – Convenience
• Technology is no longer in demand by just younger generations and it’s changing everything we do; from how we communicate, to how we work and how we spend our free time. Consumers now expect ever increasing convenience and speed from their service providers – and group benefit members are no exception. Group benefit plans that provide a convenient and faster experience will be more valued by members. A plan that is more valued will drive greater employee engagement and retention. This is more dependent than ever on the quality of a provider’s web and mobile offerings; 3 features that make a great
- Simple – it has to be easy; no one has the time or patience to navigate through multiple layers to get where they want to go.
- Satisfying – it has to be useful and better than the offline experience to gain traction.
- Social – interactivity is one of the most powerful features of the online world, so add some fun and social interaction when you can.
Trend 4 – Generational Approach
• This is the first time that four distinct generational profiles have co-existed in the workplace at the same time. The presence of the Generation Y 20-somethings, Generation X members in their 30s and 40s, and the late and early boomers in the 50s and 60s represents a significant challenge for group benefit plan sponsors. Not only do you need to deal with the differences in what employees at different life stages want from their benefits, you must deal with the distinct “values” that each generation brings in terms of life goals and the employment relationship. The “distinction in value” in relation to group benefits is especially pronounced for Generation Y, the fastest growing segment of the employee population. There are 4 features that Generation Y is looking for from their group benefits plans:
- More flexibility and control
- Greater convenience in claims
- Clear, plain language communication
- More wellness, health, and lifestyle benefit options
Trend 5 – Plan Member Empowerment
• With costs rising and the economy stagnant, many employers are struggling to maintain their current benefit coverage, let alone increase coverage. And yet employee expectations continue to run high. There is a lot of pressure for employers to maintain a competitive plan – as the ability to retain and attract talent is one of the key reasons for including a benefits plan as part of a total compensation package. Three key attributes that can “empower” employees with choice and information without additional cost include:
- Introduce a flexible benefits plan design
- Facilitate the purchase of voluntary benefits
- Advice – provide them with access to a professional advisor for advice regarding their health and life insurance and their savings and investment options
Different trends will affect different plans in different ways. An analysis of your member demographics, plan goals, and ongoing challenges in light of these trends – then taking appropriate actions based on your findings – can yield significant benefits. These steps can reduce costs to preserve coverage levels, increase the perceived value of your plan, and improve overall plan awareness and member engagement. For more information or assistance with the review of your current program, please contact your Cowan Benefits Consultant.