Employees are turning to plan sponsors to simplify and optimize their workplace benefits, finds a recent report by Benefitfocus, a Voya company.
According to its “2024 State of Employee Benefits Report,” 77% of employees agree that they are more likely to work with an employer who offers voluntary benefits like critical illness insurance, hospital indemnity insurance, and disability or accident insurance. Sixty percent believe they are more confident in their financial security due to the voluntary benefits they are enrolled in.
Benefitfocus points to rising health care costs for the shifts in attitudes, noting that offering voluntary benefits outside of traditional health care features remains a competitive necessity for companies.
“Employee benefits are more important to the workforce than ever, making a successful benefits strategy essential for organizations, reports the research. “Yet as benefits become more costly and complex, administrating benefits and driving impactful employee engagement with them is increasingly challenging for HR teams.”
While enrollment in high-deductible health plans (HDHPs) as increased across all generations, employee participation in health care savings and spending accounts (HSAs and FSAs) declined 20% between 2022 and 2024, suggesting that employers should provide more education, guidance, and support surrounding the savings tools. Furthremore, only 3% of working Americans in the survey understand the full benefits of HSAs. According to Benefitfocus, 70% of benefits-eligible employees want additional communications and educational materials from their employer.
Without additional information, employees could end up enrolling into a plan that does not benefit them. As a result, participants could end up overpaying for coverage, underutilizing available benefits, and even under saving for retirement.
“The consequences of these choices vary by organization and individual, of course, but when taken together, can negatively impact the collective state of employee benefits for years to come,” the research adds. “That’s why employers are beginning to take this reality seriously and they’re eager to provide their people with better benefits enrollment support that spans the benefits mix across health and financial wellness.”
The added burden of affording the costs associated with voluntary benefits and healthcare could deter participants from selecting the best plan for themselves. The research found that 43% of employees say it was very or somewhat difficult to afford healthcare, and 30% are currently paying off debt from medical or dental care. Over half (54%) reported that delaying or foregoing care because of high costs resulted in the health problem of theirs or a family member to worsen.
Among solutions for employers to implement include adding cost transparency to communication materials, along with care advocacy and promotions of preventative care, primary care providers, and disease/chronic health management.
To manage costs, employers should rethink their medical plan and benefits design by offering supplemental and voluntary benefits, reconsider premium tier structures, and subsidizing copays for “more affordable” options like telemedicine and/or urgent care copays over those for emergency room visits, advises Benefitfocus.
The research was compiled from enrollment transactions aggregated across 316 large employers (1,000+ full-time employees) within the Benefitfocus customer base, representing more than 1.8 million employees in total.
Additional insights can be found here.
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