Climate Of Health Reform Impacts Employee Benefits Structure

Health care reform has impacted not only employers’ medical plan designs, but also other aspects of their employee benefits programs, according to the 2014 Guardian Workplace Benefits Study. The study found that employers are rethinking their benefits model and are contemplating further efforts to control costs through plan design changes, outsourcing, and cutting administrative costs.

“As Americans get ready to sign up for their workplace benefit coverage this open enrollment season, it’s important to recognize how benefits contribute to the overall financial well-being of most workers. At the same time, the benefits landscape is changing with employers shifting more costs to employees, so employees must fully understand their choices and needs—especially when voluntary or less traditional benefits are offered, such as critical illness or accident insurance,” said Phyllis Falotico, head of group marketing at Guardian.

Benefits strategy. Eighty-five percent of respondents to the study say making plan design changes to control costs is a critical part of their benefits strategy. In addition, about half are looking to employees to bear a greater portion of their benefits costs. Forty-one percent of employers say that adding employee-paid, voluntary benefits is an important part of their overall strategy while thirty-one percent plan to replace employer-paid benefits with voluntary products. The study notes that those who feel they are more prepared for the Patient Protection and Affordable Care Act (ACA) changes also are more confident about increasing participation in their voluntary plans.

Outsourcing. Outsourcing is another way employers are looking to mitigate risk and costs in the aftermath of health care reform implementation, according to the study. Six in 10 companies say an external company is primarily responsible for the administration of their medical and voluntary benefits. Over half report that an outside vendor is responsible for non-medical insurance not offered on a purely voluntary basis.

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