Stay ahead of the curve
5 benefits and HR trends to watch in 2014
1. Increased focus on accountability to control health care costs
Consumer accountability 101:
- The Affordable Care Act (ACA) allows companies to charge different insurance rates (up to 30 percent) based on employee participation in wellness programs, and companies can charge higher rates for individuals who use tobacco (1.5:1).
- Many employees say they view these types of programs favorably – three in four employees (78 percent) say they would be willing to change their lifestyle habits if their employer rewarded them with lower premiums, and 88 percent think it is fair for their employer to give employees incentives to become healthier.1
Provider accountability 101:
- Hospitals and insurers are already working together to move their pricing models to value-based outcomes and companies are beginning to make strides with bundled pricing to keep costs under control.
- Some employers are even offering certain high-cost procedures without cost-sharing on the employee’s part, if the procedure is performed at certain preferred hospitals or if the employee will use a specified doctor.
There may still be plenty to accomplish, but companies are already taking steps towards accountability solutions that may truly help employees see lower or no-costs health care services.
2. Emergence of private insurance exchanges
Separate and different from the government marketplaces, these exchanges are often seen as an unintended side-effect of the ACA, but they are presenting employers with a simpler way to offer comprehensive worksite benefits.
This type of benefits delivery model helps employers control costs by giving employees a fixed stipend towards benefits. Employees shop for their benefits, with any remaining costs paid by the employee through their paychecks.
3. A growing need for a strong consumer safety net
Even if employees are covered by a comprehensive major medical plan, out-of-pocket costs – both medical and non-medical – can be substantial if the employee or a family member has a serious injury or illness.
Are consumers ready?
Many people are uneasy about taking on their newfound health care responsibilities.
Two in five U.S. workers (43 percent) agree that with greater control over health care expenses they will have a difficult time managing their health care coverage decisions because they already have trouble saving and sticking to a budget today.1
And more than half say they would prefer not to have more control over their health care expenses because they do not have the time or knowledge to effectively manage them (54 percent).1
What can employers do?
With so much at stake, effective employee education and consumer-directed benefits tools will be invaluable resources to help workers make smarter benefits decisions.
Voluntary insurance benefits will continue to be a key way to help employees protect themselves from increasing out-of-pocket costs that could result in unexpected debt. These policies can be offered at little or no cost to a company’s bottom line, and help pay for costs that major medical insurance doesn’t cover.
4. Unprecedented C-suite engagement in health care decisions
A recent survey by the Society of Human Resource Management (SHRM) revealed that 75 percent of HR leaders say health care reform will have a major impact on the U.S. workplace over the next five years.2 And so, it is no surprise that benefits strategy will not only be top of mind for executive and financial leadership.
Potential cost of being unprepared: Not only will some employers have to make a choice between offering health insurance to all full-time employees and their dependents, or face substantial penalties in 2015, but there is also a $63 per covered individual Transitional Reinsurance Program fee in 2014 and a 40 percent Cadillac Tax on high-cost health plans scheduled to take effect in 2018.
According to Johns Hopkins researchers, about 16 percent of all plans could be affected by the Cadillac tax when it takes effect and some 75 percent of plans would be affected a decade later because of inflation of the annual premium limits.3
5. Tailoring the employee value proposition to the next generation
Not only are millennials undeniably defined by their use and affiliation with technology, but they’re also more engaged online with their personal identity than any generation before them.
Increased technology use is already taking the stage with 43 percent of employers planning to deploy digital technologies such as web tools and mobile apps in 2014, and 31 percent are considering these tools for 2015 or 2016.4
In the years ahead, employers will continue to take measures to adjust retirement, engagement, training and communications programs to account for a changing workforce.Learn more about Aflac's solutions