2016 was a year of uncertainty for many Human Resources and Financial leaders as they continued to adapt to evolving trends in health care and compliance. Moreover, there were significant shifts in how employers approached their overall benefit delivery and management strategies. Below are areas where our clients saw the most change, and where we anticipate new opportunities in 2017.
Healthcare Trends from 2016
Rising Costs as a Catalyst for Change
With the costs of health care increasing for both standard medical coverage and prescription drugs, employers continue to promote consumerism, transparency, and employee responsibility to their employees. The hope for many employers is that these communication points will help employees better understand the costs of health care and how to spend their dollars more wisely.
Continued Interest in HDHPs
As a part of the communication and enrollment process, employers placed more emphasis on educating employees on the advantages of High Deductible Health Plans. Because monthly premiums tend to be lower and deductibles higher, HDHPs are a great option for employees as they continue to become more savvy consumers of their healthcare choices. Employers have seen that their employees feel more empowered when they have greater control of their healthcare spending options.
Decision Support & Transparency Tools
The availability of decision-support and transparency tools are more readily available for employees because these technologies provide a greater understanding of employee benefits and how individuals and families might utilize their benefits more effectively. More employers implemented these tools in 2016 than ever before, empowering employees to compare benefit costs at time of enrollment and during the year when they are shopping for providers, procedures, and prescription drugs.
Alternative Care Options
Employers are implementing new strategies to help employees consider alternatives to traditional care providers, such primary care physicians, hospitals and emergency rooms. In many cases, telemedicine, urgent care facilities and on-site clinics can provide appropriate care that is more convenient and less expensive for non-emergent medical situations. These options and the communication and promotion that supports them can result in lower costs for both the employee and employer.
Communication on the Rise
All of the new initiatives, tools and resources available to employees have made benefits, especially healthcare, even more confusing – which is the major hurdle for adoption. While the consumerization of health care is enticing, employers are now challenged with helping employees engage in the process without overwhelming them. Communication, with the goal of simplification, was on the rise in 2016 as employers recognized the difficulty of executing their complex strategies with an engaged workforce.
What to expect in 2017
Personalized Enrollment Software
The adoption of personalized enrollment tools will grow significantly in 2017. While these tools exist today, they’re gaining traction among larger employers who are no longer satisfied with the transactional applications of their HRIS platforms, and who believe they’re missing an opportunity to execute their healthcare strategies more effectively. This may be why “40% of organizations have a major HR Systems Strategy initiative” planned for 2017, according to a recent Sierra-Cedars survey.
With advanced decision-support software, employees can receive plan recommendations directly from their benefits software, based on actuarial information, individual preferences, and personal financial situations. As the market continues to move towards employee consumerism, there is also a recognition that the benefits enrollment experience should resemble an online shopping experience that employees more readily understand. For example, employees want the ability to “edit my cart” or “check out now” after receiving their recommendation. Some employers even incorporate paycheck modeling and total compensation statements into their enrollment experience in order to help employees better appreciate the impact of their benefit decisions.
Employees struggle to manage the various communications and web portals related to their compensation and benefits. For example, it’s not uncommon for employees to have as many as 10 portals to access for information and actions related to enrollment, benefit plan content and election information, payroll history, PTO balances and requests, 401k balances and allocations, Wellness program statuses and incentives, heath plan deductible statuses, FSA and HSA balances and claims history, and – well, you get the point. We can also understand why employees sometimes tune out! There is a major opportunity for employers to make this experience less frustrating for employees by integrating their various portals, simplifying logins and maintaining real-time information in one central location. You can bet that we’ll see mobile-enabled, benefit dashboards on the market in 2017.
Affordable Care Act
In 2016, the market experienced a lot of uncertainty as employers delivered 1095-C statements to employees and filed ACA-related reports to the IRS for the first time. In 2017, we can expect some responsibilities to remain in place, at least as they relate to the upcoming reporting season. That said, regulatory changes are on the way, and employers, along with their partners, will need the compliance expertise to navigate these changes as they’re announced.
Businesses continue to struggle with healthcare costs, and they continue to partner with employees to help control these costs. However, it is important to remember that a healthcare consumer armed with more tools and resources may become overwhelmed. In 2017, we will see continued communication and education around healthcare initiatives, and we’ll see increased effort and budget dollars allocated to innovative software that delivers a similar look and feel to other consumer experiences. In summary, employers and their workforces are in the same boat to control costs, but it’s up to the employer to shield employees from the complexities inherent to a consumer-driven mindset.