In the world of health and welfare benefits, 2015 has been a wild ride. Employers dipped their collective toe into new models for employee benefits, employees took on more responsibility, and a couple of new players came swashbuckling in declaring they were going to completely revamp the business. All this action occurred against a backdrop of complexity that occupies most of the HR department’s time.
Here are 6 BIG trends we saw in 2015:
Rise of the Benefits Tech Companies
Technology disruption—which is common across most industries—reached the health and welfare benefits industry in 2015. Tech-driven benefits platforms appeared promising. They would handle payroll and benefits while cutting out the middleman, the broker. While this may seem to be a good solution for small businesses whose benefits administration likely falls on the owners, there are some definite flaws that these tech companies will have to figure out in the coming years. We saw indications of this in the messy situations these tech companies found themselves in.
Though these technology solutions are presented as “free” or low cost, there’s a price to pay for not working with a strategic broker who understands your business and your employees’ needs. After all, we’re talking about human resources, and technology solutions can come across as cold and impersonal for an important constituency: employees. Benefits are an important part of a company’s offering. They play a critical role in attracting new employees, and the people utilizing those benefits place a high importance on them.
More Compliance Requirements
Several parts of the Affordable Care Act were implemented in 2015, and with it came new standards for compliance for employers. This meant more paperwork (and more headaches) because employers had to devote more resources complying with the various new rules that the ACA set forth. Throughout the year we issued eAlerts on the ACA and other healthcare reform updates. You can view them here.
Ideally, employers used 2015 to prepare for ACA reporting and the administration that accompanies it.
In addition, employers have identified their approach to complying with Information Reporting. In many cases, this meant the implementation of technology to handle the data. For other employers, it was choosing a manual process. Either way, they were deeply engaged with ACA reporting and the administration that accompanies it.
Lots of action occurred against a backdrop of complexity, occupying much of HR’s time.
Consumers Continue to Take the Reins
Despite some reports, private exchanges still haven’t quite taken off. However, we are moving in that direction. In 2015 we saw a growing focus on consumer-driven healthcare, with employees taking greater responsibility over their health spending. While this hasn’t resulted in employers going all-in on private exchanges, they are embracing some of the concepts and getting employees more involved through the use of vehicles like health spending accounts.
With this increase in freedom and flexibility comes the need for consumers to become better informed about their healthcare. High deductible plans mean higher out-of-pocket costs for employees, and sometimes unexpected bills. It all points to the next possible “killer app” in health insurance: education.
Healthcare Gets More Expensive
For the average American worker, healthcare premiums rose just 3.8% in 2015. That’s the good news. However, deductibles paid by consumers rose 9%. More workers are forced to pay deductibles, 81% in 2015, which is up from 70% in 2010.1 This increase in healthcare costs has made an impact on workers whose earnings have not risen. And the future probably holds continued rising costs as employers place more of the onus on workers to pay for their own healthcare.
For employers, this demands a balancing act between cost controls and employee morale. This isn’t necessarily new for most businesses, but it’s fair to say the degree of difficulty is ratcheted up significantly.
A combination of the ACA’s focus on employee health and wellness and a larger push to be more physically fit in the face of the obesity epidemic has led technology companies to develop apps and hardware that encourages and tracks physical activity. Now, employers are embracing this wearable technology revolution and beginning to incorporate tracking apps and devices as a way to model voluntary wellness programs.
You’ll see these more frequently in the year ahead as more people buy fitness trackers and begin using health apps.
For employers, it’s way to help employees be healthier. However, it’s also a potential legal issue. The information tracked by these technologies has to be safeguarded and kept private, or else a well-intentioned employer could be on the wrong end of a lawsuit.
As we look back on a busy year, we can see it’s been one of adjustment and disruption.
And, very likely, we ain’t seen nothing yet.
1 Kaiser Family Foundation, “2015 Employee Health Benefits Survey”
- 5 Reasons Your Plan Document Needs an ACA Compliance Check
- 2016 ACA Changes for Small-group Employers; Newsday Interviews Corporate Synergies
©2015 Corporate Synergies Group, LLC. No part of this material may be republished or distributed without prior written consent.