5 Trends Shaping Employee Benefits in 2018

5 Trends Shaping Employee Benefits in 2018

This year has been a whirlwind of activity. For many benefits leaders, that all culminated in a hectic open enrollment season. Now, it's time to reflect on the previous year, and also start considering what’s in store for the year ahead.

We’ve pulled together the can’t-miss moments of 2017 here and a “best of” list here. In this post, we'll shift our focus to looking ahead.

Get ready for another big year. Here are the trends we see shaping 2018:

1. Next Generation of the Workforce

Two shifts are happening in the composition of the workforce – Gen Z is moving in as baby boomers are moving out, and the gig economy is taking over an increased share of the workforce.

We’ll start with our newest employees. What are they like exactly? Fascinatingly, this new cohort are part traditionalist, part exceedingly modern tech-natives. Collaborative yet independent, pragmatic and valuing security, these are the key motivators for this group. At the same time, employers have to remember that they don’t see technology as an alternative way to communicate, it literally is how they communicate and get information.

As you see more of these fresh faces joining your workplace, it’ll be important to provide benefits accessibility and personalized plans, while communicating those options with brevity and in modern ways.

Another trend influencing the workforce is the shift towards companies hiring contract workers to fill needs around unique skills. The positives for employees looking at these roles are that they gain more flexibility and have more choice in the projects they work on. However, this type of work can leave them more vulnerable when it comes to protecting their health and wealth. In the future, employers will need to explore ways to fill this gap in a cost-effective way.

2. Personalized Employee Experience

Starting with millennials and now with Gen Z, employers know that personalization is imperative. In fact, an investigation of LinkedIn members found that there are already roughly 3,000 people with either “employee engagement” or “employee experience” in their job titles.1

Traditional HR functions are expanding, and likely will continue to expand.

For 2018, there is one game-changer. The shift that the top employers will make is from not only personalizing the experience for employees already within the walls of the company, but throughout their entire employment lifecycle – attraction, retention and engagement.

Telling the employer’s story to win over new candidates will take on new meaning. Now, it’s about finding out where those candidates live digitally and engaging them where they are. Once they’re in the door, employers’ engagement and retention strategy will mean leveraging technology to make their employment journey easier, smarter and more human.

3. Financial Wellness Imperative

While health care spending grew at a slower rate in 2016 than the previous two years, the bad news is that out-of-pocket spending grew by nearly 4 percent that same year to $352.5B.2

And it’s also no secret that many people across generations are drowning in student loan debt.

This combination of increased spending and debt pressure holds your employees back from the big milestones in life like buying a house or, even more importantly, building a secure, financial future in retirement.

But employers that want to engage employees should take into consideration that financial wellness is a very personal issue. Instead of implementing a variety of programs, the better way will be to help empower them with an understanding of their benefit choices in a more holistic way to help them take greater control of their own financial wellness.  

Want a deeper dive into financial wellness? Join our webinar, Financial Wellness: What’s Really Impacting Your Bottom Line.

4. Employer Strategies to Contain Health Care Cost

Rising health care costs is the problem of our lifetime. Health care spending is growing much faster than the rest of the economy, and while there isn’t a single solution on the horizon to address this problem, employers can work within their own ways to take charge of containing costs.

The first step is understanding what the problem really is for employers. A small number of your employee population (only 5 percent) is driving the majority of your health care costs. What’s even greater is that those costs are typically driven by conditions that, with proactive management, can be reduced.

Traditionally, employers have turned to wellness programs as the way to address this problem. What we often see is that the result is healthy people getting healthier while not really getting at the true issue. Success in mitigating these costs and addressing chronic illness management is about giving employers more transparency.

For 2018, those employers that leverage tools and services to support a data-driven plan will find that they can truly understand what is driving their cost, build targeted communication plans to drive behavior change and monitor that performance so adjustments can be made quickly in order to get results. 

5. Evolution of Health Care Reform

Not so much of a new trend as always trending, there were many starts and stops to health care reform over this past year without any real change happening.

The spring and summer saw the introduction of the AHCA and BCRA, amendments, postponed votes, the vote-o-rama and skinny bill. Ultimately, all of these proposed changes failed to pass. With a brief intermission of activity, the fall picked up the pace again. (Get a full recap of exactly what went down here).

Tax reform (as of writing this) is teetering in our midst with the GOP’s self-imposed deadline to get something passed by the end of this year. The current bill includes a repeal of the individual mandate – a centerpiece of the ACA – and could trigger impacts to health care markets.  

So, what’s ahead in 2018? Unfortunately, it’s really anyone’s guess. Health care policy has always been a moving target for benefit administrators.

While we can’t predict the future of health care reform, what we do know is that you can be ready for whatever comes your way. Fundamentally, health care benefits are key to attracting and retaining top talent so that will continue to be the focus of employers. But with all of the complexity in health care and potential changes to health care reform, tools and resources that can help bring simplicity to the complex will go a long way to help those employees make the best benefits decisions. Adopting flexible benefits management technology that can keep up with the ever-changing policy environment can put you a step ahead.

Want to build a more comprehensive plan for 2018? Watch our webinar to hear an in-depth discussion on the trends facing employers in 2018 and learn what you can do to prepare.

Staffbase 

2 CMS.gov