Resolve to Break Your Addiction to the Benefits Status Quo
Instead of making a resolution that you know will be broken within six weeks, try this one:
Resolve to break your addiction to the benefits status quo by rethinking the insurance you offer to your employees. Make this the year you look for a better way.
What Do We Mean by the Benefits Status Quo?
When we talk about the “status quo” in terms of benefits coverage, we are really talking about:
• Misaligned coverage – Employers who offer a “one-size-fits-all” health plan and limited other forms of protection are likely over-insuring or under-insuring almost all of their employees. What a waste of money.
• The annual juggle of rising benefits costs – Each year, employers either pay more, change carriers and plans, cut coverage, or shift costs to employees. All bad choices.
• Less satisfied employees – Employees don’t understand their employer’s contribution and see coverage offerings as limited. Isn’t it time employees really saw the cost and value of their benefits as part of their overall compensation?
• Administrative headaches – Your HR staff is bogged down tracking down paper enrollment forms, answering employee questions, managing carrier reporting needs. Technology has simplified so many other processes, why not benefits enrollment and administration?
4 Reasons Employers are Addicted to the Benefits Status Quo
Liazon’s in-depth research and first-hand experience based on our 7+ years’ experience operating the leading private benefits exchange has shown us that generally speaking, employers are stuck on the ideas that:
1. Making a change will be too confusing.
2. Making a change will not save them money.
3. Their employees can’t make decisions for themselves.
4. They want to see results from other companies before kicking the status quo.
Here’s Why it’s Time for this Addiction to Be Broken
1. Private exchanges simplify a confusing process for employees.
No one is saying insurance is easy to understand. The current structure, with its reliance on terms like copays, coinsurance, in- network vs. out-of-network, HMOs, PPOs and the like, still leave employees scratching their heads trying to make sense of it all. But private benefits exchanges, like Liazon’s Bright Choices® Exchange, that incorporate a sophisticated decision support tool, make the process simple and effective. All employees need to know is a general understanding of their family’s current and anticipated health care expenses and their ability to meet those expenses. Then the system does all the work to make a recommendation based on each individual’s health, wealth and personality needs and preferences. The recommendation includes a unique portfolio of coverage selections that best uses the dollars allocated to that individual by their employer to deliver the best risk protection at the best price.
2. Private exchanges can help employers control costs.
In a 2014 survey of employers using Bright Choices and other Liazon-powered exchanges, 83% told us they think Liazon has helped them control benefits costs. How? By determining how much an employer wants to spend on employee benefits each year, or “defined contribution,” they know exactly how much they can and want to spend and can control that spending year over year. That’s why we believe defined contribution is one of the cornerstones of an efficient market; in fact, employers that aren’t interested in defined contribution are likely not the right employers to participate on a Liazon-powered exchange.
3. People are engaged and taking more of an interest in their own benefits decisions.
Our own research of Bright Choices and other Liazon-powered exchanges indicates that the key reason employees chose the benefits they did was because they believed they were getting the right level of coverage, not because of price considerations alone. Further, 90% were satisfied with the choices available or wanted even more, and 74% were more aware of their company’s contribution toward their benefits. Another key tenet of the Bright Choices Exchange, illustrated: Choice Matters. And while the most recent findings from the 2015 Affordable Care Act open enrollment indicated a few surprises for the industry in terms of activity and engagement, they really they weren’t all that surprising to us.
According to the Department of Health and Human Services, from November 15th to December 26th, nearly 6.5 million consumers chose a 2015 benefits plan on the Federal marketplace or were automatically re-enrolled. Approximately 30% of the re-enrollees (or about 1.3 million people) “shopped around” and bought a new plan, instead of being auto re-enrolled. But, as health care policy analyst Chris Condeluci points out, the three million people who opted to be automatically re-enrolled still have a chance to change their plans through February 15th and it’s still unclear how many of these auto re-enrollees will “shop around” for a different plan. As I pointed out in my post here about why 2014 was a pivotal year for private exchanges, people are and should be shopping on exchanges.
4. “Other companies” are glad they switched to a private exchange and are reaping the rewards in employee satisfaction.
And they’re telling others about it. In December, Employee Benefits News cited some takeaways from their Private Healthcare Exchanges conference, including this one: “Employees at Miller-Valentine…expressed increased satisfaction with their benefits since the move to the [Liazon-powered] exchange, with 79% saying they are satisfied with the changes. Employees also said ‘they understood their benefits better and have a better understanding of the company contribution [to benefits],’ said Karen Fillback, HR Specialist with Miller Valentine Group. ‘This was a great strategy for us.’”
We expect to hear more stories like this throughout 2015 as awareness of private exchanges gains further momentum and the inroads made by forward-thinking companies who’ve already broken their addiction to the benefits status quo starts to be felt more widely by their employees and HR personnel.
We’ll be capturing the progress here on the blog throughout 2015, so stay with us.