How Employee Benefits Are Evolving

Are you aware that new governmental regulations and emerging employer trends are changing many company-sponsored benefit plans? Discover what other businesses are offering below. Then ask National PEO how our extensive benefit administration and retirement plan services can extend similar perks to your workforce.

Health Changes

Higher insurance costs: Although the pacing of health care cost increases has eased, rates continue climbing. Premium costs rose by 5 percent in 2015, averaging $6,251 per worker or $17,545 per family. Firms absorb some costs and pass others to employees who contribute $1,071 individually or $4,955 per family on average.

Restricted health networks: To decrease health care expenses, insurers and employers are narrowing provider networks. Doctors in network now may not be next year.

Online enrollment: Sixty-two percent of staffers reported enrolling in their 2015 company health benefits online, a 46-percent increase since 2011. That survey also noted how workers aged 69 and up are adapting to online enrollment more slowly than younger generations. The next preferred methods are paper and then face-to-face enrollments. Small firms with fewer than 100 employees believe that in-person assistance works best for their teams.

Telemedicine services: In recent years, some businesses have offered on-site clinics so workers can access affordable health care easily for minor conditions like ear infections and rashes. By avoiding trips to and from doctors’ offices, convenient in-house care minimizes missed work. Now, collaborating with insurers to offer telemedicine services is becoming popular. Personnel and covered family members have access to physicians via phone calls or video messages as needed. At about $25-$50 per incident, those services are cheaper than emergency rooms and urgent care clinics.

Stricter wellness programs: Employers have used preventative programs to encourage workforce health and curtail medical costs. Now, some are implementing more stringent requirements. To earn better incentives, staffers must go beyond participating in events like biometric screenings and weight-loss programs to show positive results. Companies providing wearable health trackers like Fitbits help workers monitor their activities. Rewards range from monetary incentives to expanded health plan choices. Researchers found that only 6 percent of businesses have such programs currently, but 2 percent more will initiate them in 2016. By 2020, over 50 percent of firms intend to make wellness program success prerequisites to enhanced health care plans.

Retirement Transformations

Automatic 401(k) elements: Today, most companies have implemented auto-enrollment so all workers will invest something in their employers’ 401(k) offerings. This retirement vehicle allows opting in for additional features. Automatic re-enrollment shifts participants’ dollars from current investments into their plans’ default options automatically. To increase paycheck contribution percentages automatically every year, employees can choose auto-escalation. They can elect for auto-rebalancing to adjust asset allocations to set targets when market moves throw them off kilter.

Fine-tuning company matches to boost savings: Originally, the goal of matching was to inspire worker participation in employer-sponsored retirement plans. Today, firms are extending matching contributions so staffers will save more. Many organizations have quit offering traditional matching formulas such as 50 percent of personnel contributions with a 6-percent-of-pay cap. Replacements involve lower matches with higher pay ceilings like 25-percent matching of staff contributions with a 12-percent limit. Each method provides the same maximum for employers. But the new formula improves the likelihood that team members will raise their contributions.

Assigning plan fees to staffers: A survey showed that the percentage of organizations requiring workers to pay recordkeeping fees has been on an upswing for several years. From 33 percent in 2009, it rose to 44 percent in 2012 and to 58 percent in 2015.

Online education: Pulling staffers off their duties to learn about their firms’ 401(k) plans hurts productivity. So more companies prefer online education systems that give employees access to educational information including short video tutorials from home. Two-fold benefits include avoiding work interruptions and including spouses.

Financial planning advice: More firms are offering financial planning tools online or access to advisors. Knowing how to budget for a baby or home purchase and plan for retirement enables personnel to make better monetary choices and avoid debts.

Student loans: PricewaterhouseCoopers gained fame for offering to fund up to $1,200 of staffers’ student loans annually. Additional high-profile organizations are helping workers access academic and refinancing programs to pay off their educational loans faster.

Categories: Health Care & Benefits