Big Dollars Are Shifting the HR Benefits Landscape

The benefits landscape for large and mid-market employers is undergoing rapid transformation.  Changing compliance requirements, increasing medical and drug costs, and shifting employee preferences are some of the driving factors.  Even with 52% of employers offering high deductible health plan (HDHP) options, 70% of employers expect their health benefits budgets to increase, according to Wells Fargo Insurance.  As a result, employers are placing more scrutiny on the health benefits they offer and their impact.  This paradigm is impacting traditional wellness benefits and creating an opportunity for a new wave of emerging health benefits that are starting to get real traction with employers.

Some Wellness Benefits Are Under the Microscope

Traditional wellness benefits have been a mainstay of large employers but that is starting to change.  According to a survey published by the Society for Human Resource Management (SHRM), big employer dollars are shifting away from some popular wellness services such as health coaching, on-site flu shots, 24-hour nurse hot lines, and insurance-premium discounts for weight loss.  In fact, all of the above mentioned benefits have declined over the past year in terms of employer spend, according to SHRM.  To be sure, some 50% of employers surveyed still offer traditional wellness programs so we do not think they are going away.  Yet, according to a Rand Corp. study of Fortune 100 companies, lifestyle-management wellness programs lost about 50 cents for every dollar spent, meaning they failed to deliver a return on investment (ROI) for employers.  With these types of statistics available, HR departments are searching for new, innovative health benefit options.  So where are the dollars going?

New Benefits Are Getting Traction

Demographics are changing and employee populations are becoming more diverse.  Employees are increasingly taking charge of their health through consumer-directed plans that shift cost and responsibility to the employee.  To that end, some employers are moving away from a “stick” approach and replacing it with a “carrot” to provide helpful resources, tools, and services that actually help employees and their families effectively manage their health. This is evident in the growing adoption of telehealth, transparency tools, and fitness monitoring.  However, there is a new wave of interesting benefit options that are gaining momentum.  Some examples include:

• Medical Decision Support – ConsumerMedical provides high-touch services and unbiased content to arm employees and their families with critical information that gives confidence when making difficult health decisions around activities that include having elective surgery, selecting a doctor, or receiving a second opinion.
• Pregnancy and Maternity – Ovuline provides mobile tools that strive to increase a couples’ likelihood to conceive, track pregnancy progress, and benchmark key child development milestones. 
• Prescription Drugs – GoodRx provides a suite of mobile tools that help employees navigate prescription drug pricing, allowing them to compare costs and save money.
• Mind Fitness – eMindful provides evidence-based behavioral programs and on-demand training to help employees be more resilient and focus on managing stress and chronic pain, mental health, cancer, diabetes, among other conditions. 
• Adolescent Weight Management – Kurbo provides health coaches and mobile tools to empower kids and teens to set goals, lose weight, and develop healthy eating and exercise habits.
• Genetic Testing – Newtopia provides testing that identifies genetic risks along with an assessment of personality, motivations, and an employee’s likes and dislikes to assign a personalized health coach to drive maximum impact.
• Financial Planning Tools – Alegeus provides consumer-friendly tools to help employees make more informed decisions related to health spending and financial impact with tools to support selection and funding of health savings accounts. 
• Enterprise Platforms – Jiff provides a platform that enables employers to create a health benefits hub for employees, leveraging big data to create a tailored experience that connects various employer-sponsored health and wellness solutions.

Factors Driving New Benefit Adoption

In our view, benefits that are gaining momentum tend to align the C-suite and the HR department in terms of the value they deliver.  From our perspective, some of the key value drivers are:

• Compliance – Aligns with the Affordable Care Act (ACA), Fair Labor Standards Act (FLSA), and Cadillac Tax. 
• Financially Stability – Allows for consistent budgeting and predictable costs.
• Return on Investment – Support a sound ROI through reduction in medical costs/absenteeism and higher productivity.
• Engagement – Drives sustainable employee adoption and participation.

Conclusion

Many employers find themselves in a challenging position. Some employers are trying new pilots, adding more voluntary benefits, or constantly modifying their employee options in search of the perfect benefits packages that will lower cost and satisfy employees.  Some of the emerging benefits we outlined above may give employers hope.  We are excited to see how the health benefits market transforms over the coming years and we are watching with anticipation as the next wave of employer health benefits innovation arrives.  Let us know what you think.